date: 15 June 2010
embargo: 00.01hrs Wednesday 16 June 2010
The next round of Government spending cuts will weaken the economy, lead to hundreds of thousands of job losses, hit the poorest in society hard through a loss of services, and leave an even deeper deficit, according to a new report published by the TUC today (Wednesday).
All Pain, No Gain: The Case Against Cuts looks at economies that have made severe spending cuts in the past - Britain in the 1980s, Canada in the 1990s and more recently Ireland - and finds that the end result for the UK in 2010 will be damaged public services, rising unemployment and increased suffering for the most vulnerable.
Nor will cuts reduce the deficit, according to the TUC report. A harsh round of spending cuts will harm the economy, causing the Government's tax receipts to fall as companies pay less tax on their profits and newly unemployed public servants no longer pay income tax. And with hundreds of thousands of newly unemployed workers on the dole, the benefits bill will rise too.
Instead of spending cuts now, the TUC report urges the Government to actively work for an international growth package, raise taxes for those most able to pay, and abandon the cuts timetable which demands that the deficit be halved by 2014.
Commenting on the report, TUC General Secretary Brendan Barber said: 'The huge spending cuts planned by the Government risk imposing a great deal of pain on the British people - especially for those at the bottom - and for absolutely no gain. But it doesn't have to be this way.
'Cuts are the worst way to plug the hole in the public finances. They have not worked in Ireland and did not work in 1980s Britain.
'The speed and severity of UK cuts is more likely to spook the markets than please them as a double-dip recession looms and Europe embraces the self-harm of deficit fetishism. Business confidence, order books and consumer demand is all very brittle.
'The cuts programme increasingly looks less like economics and more like a political project to restructure the state and roll back support for not just the poor and vulnerable but the services on which middle-income Britain depends.
'It is increasingly clear that the Government cannot eliminate the deficit on the timetable they have chosen without the deep cuts in spending advocated by Reform, the think-tank close to government, today. Voters did not vote for cuts in health, education, pensions, the police and for privatising the road under their feet.'
Politicians are wrong to think it's possible to do away with 'backroom' jobs without affecting services says the report, as any cuts to human resources, finance or administrative staff will make life much harder and more stressful for those on the frontline, says the report.
Similarly the report dismisses claims that services can be run any more efficiently or cheaply by using the private sector. With many out-sourced projects going over budget, the end result is a decline in the quality of service and poor value for money.
The report also looks at the experience of governments in Canada and Ireland to make its case against cuts:
All Pain, No Gain urges the UK Government to turn away from its £60 billion cuts programme and manage the public deficit by:
- All Pain, No Gain is available at www.tuc.org.uk/all_pain_no_gain
Press release (800 words) issued 16 Jun 2010
This page http://www.tuc.org.uk/economy/tuc-18088-f0.cfm
printed 25 May 2013 at 17:36 hrs by 18.104.22.168