As British Chambers of Commerce cuts its growth forecast for the UK economy, the evidence is piling up that cuts are damaging the economy but business and government don't seem to be getting it.
This follows the Organisation for Economic Co-operation and Development (OECD) warning that cuts at the Government’s break-neck pace were threatening the recovery. The OECD is not one for usually disagreeing with the Government so their intervention adds even more weight to the argument that, not only are the cuts bad for the country, they are delaying recovery.
More weight came from Nobel Prize winning economist Joseph Stiglitz recently in a speech in Copenhagen.
Austerity measures “don’t work” and prevent countries from creating jobs needed to generate economic growth, he said. “Austerity is an experiment that has been tried before with the same results.”
Cutting budgets in low-growth cycles leads to higher unemployment and hampers recovery. Austerity “doesn’t work, it does not led to more efficient, faster growing economies.”
Stiglitz is also an economic advisor to the Scottish Government. Let's hope they are listening to his advice.
As UNISON has been pointing out all along, healthy public services don’t just benefit people who rely on them, they benefit the whole economy - public and private sector.
It is astonishing that the Government seem surprised that they’ve had to borrow more because of a slump in tax receipts.
Well, if you make lots of people redundant, of course you are going to get less tax and you have to pay more benefits. If you give tax breaks to your rich cronies in big business, of course you get less tax. Which bit don’t they understand?
