Campaigners for an international tax on financial institutions have said that the £6 billion programme of spending cuts announced by the Coalition Government yesterday, are a sign of "profound injustice".
The Chancellor, George Osborne, and the Chief Secretary to the Treasury, David Laws, outlined the immediate spending cuts aimed at reducing Britain's £156 billion fiscal deficit, which is now the highest in the EU.
The plans included scrapping child trust funds and freezing civil service recruitment and will lead to £6.243 billion of cuts this year. £500 million of that will be reinvested in apprenticeships, further education and social housing, which means that around £5.7 billion will be directed towards paying down the fiscal deficit this year.
The main cuts are:
• Scrapping government contributions to the Child Trust Fund.
• A civil service recruitment freeze across all government departments and agencies.
• Full first-class travel, which cost £45 million in 2008-09, "should be avoided by public servants wherever possible".
• Quangos will have their budgets cut by £600 million. Others will be scrapped completely leading to job losses.
• Efficiency savings in discretionary areas like consultancy and travel costs; £95 million through savings in IT spending; and £1.7 billion from delaying and stopping contracts and projects with the 70 major suppliers to government.
• £1.165 billion savings from local government which will be achieved by reducing grants to local authorities.
Owen Tudor, a spokesperson from the Robin Hood Tax campaign, said: “The spending cuts spelled out by George Osborne represent a profound sign of injustice. Those who bear no responsibility for the global recession will have to pay the price, while the financial sector, whose reckless behaviour has largely contributed to the mess which we are in, can continue business as usual.
“Cuts will not only affect a significant portion of public sector workers who will lose their jobs or see their pay frozen, but also the general public who will no longer be able to rely on essential public services.
“One way of avoiding these large-scale cuts would be to introduce a Robin Hood Tax on the financial sector, which would raise at least £20 billion a year in the UK alone. Such a tax would be fair as it would target a sector that played a pivotal role in the economic crisis and that has the financial resources to cope with a levy.”
Robin Hood Tax campaigners say that the revenue raised would help reduce the public deficit, protect public service jobs, tackle poverty at home and abroad, as well as fight climate change.
108 organisations including Ekklesia currently support the Robin Hood Tax campaign in the UK.