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  • Writer's pictureKenneth Gibson MSP

Scotland Condemned to Decade of Austerity

Clearly positioning himself to take over when Prime Minister David Cameron steps down, Chancellor of the Exchequer George Osborne MP is a man keen to appear credible, decisive and effective. For Mr Osborne each budget statement and spending review has become his moment in the limelight; a moment in which he sets out his political stance and improves his personal stock. That carefully crafted image was shattered last Wednesday when, in announcing his Autumn Statement and Spending Review for 2016-20, he was forced into an embarrassing, but very welcome u-turn over his planned Tax Credit cuts.

It shows the SNP was right to keep fighting these cuts when Labour had simply thrown in the towel and voted against devolving Tax Credits and their budgets to Scotland whilst demanding the SNP Government then fund a replacement by raising additional taxes.

Adamant only weeks ago that Tax Credit cuts were a financial necessity, Mr Osborne was forced into an uneasy climb down and whilst his decision will be greeted with relief by the 200,000+ Scottish families with children in Scotland who would have suffered, his headline grabbing u-turn did not paint the full picture. Indeed, in the very same speech, the Chancellor re-committed himself to reducing welfare spending by £12,000 million by 2020 with a further £20,000 million to come from UK Departmental spending. In this sense the move was all tricks of smoke and mirrors - shifting pain from one spot to another.

Unfortunately, the family element of tax credits will be still cut and working age benefits frozen until 2020. With Universal Credit coming in, families with children will on average be £2,629 worse off next year and Tax Credits will still disappear by 2018.

Of course these tricks were not limited to Tax Credits and Universal Credit; similar subterfuge was used when announcing increases to Scotland’s capital budget over the next four years. Whilst any increase in funding is welcome, allowing the SNP Government to invest in job creating projects, Scotland’s Capital Budget in 2019-20 will still be £600 million (17%) lower than in 2009-10. Furthermore, the Scottish Budget will see a cut of £1,500 million (5.7%) in the funding for day to day public services over the next four years, to add to the £3,000 million already cut under UK Labour, Coalition and Tory governments since 2009.

To add insult to injury, these cuts are unnecessary and will cause needless pain for thousands. The Chancellor’s plans to reduce public spending are based primarily on ideology. Under the Tories, public spending will fall from 45.7% of national income in 2010 to 36.5% by 2020, reaching its lowest level in the UK since the 1930s – long before the advent of the welfare state and the NHS. This is austerity through choice, not necessity and does not provide the resources necessary to run a modern, functioning progressive society, with properly funded services, whether in the areas of education, health, justice, social care or welfare at a time when our population is ageing rapidly.

The ‘no pain, no gain’ argument is often trotted out by Tories, keen to paint the Chancellor’s unwavering commitment to austerity as a necessary tonic for the UK’s financial woes. However, in reality Mr Osborne has failed to meet most of his own financial targets – failing to balance the books and borrowing £150 billion more than he anticipated.

By contrast, the SNP’s clear and costed plans would secure debt reduction through a targeted programme of investment. We can and should secure vital public services and also boost spending on infrastructure - a tried and tested method of creating jobs across the developed world - creating the right economic conditions for a sustainable future.

George Osborne’s austerity experiment has failed and it is time to change course.


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Kenneth Gibson SNP

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