FOR the tens of thousands in North Ayrshire already struggling to make ends meet, the UK Government Budget couldn’t have come at a worse time.
In a bid to reassure the markets after Liz Truss’s disastrous budget only a few weeks earlier, Conservative chancellor Jeremy Hunt announced a series of eye-watering real terms cuts to public services.
Over a decade since David Cameron and George Osborne told the public to tighten their belts because of a financial crash caused by bankers and mortgage lenders, the Tories have returned to their favoured solution. Austerity.
It’s the failed idea which refuses to die.
Tory politicians and pundits love to repeat the myth that the Government’s “credit card is maxed out”.
In reality, government finances are nothing like a household’s.
Approximately a third of UK national debt is owned by the Government itself due to the Bank of England’s programme of quantitative easing, printing money on a colossal scale.
When a household cuts its spending, it saves money for other essentials; when the Government cuts its spending, the entire economy suffers.
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In 2010, the Conservative-Lib Dem Government tried to claim there was no alternative to this approach, but the results were catastrophic.
Since the Tories came to power in 2010, debt as a percentage of GDP has risen almost every year, the pound has lost a third of its value, and we’ve had the worst wage growth for 200 years.
Meanwhile, foodbank use has rocketed, public services have been decimated and millions have been forced into in-work poverty, now at record levels.
Vandalising the economy in this way wasn’t a sign of fiscal responsibility by the government then, nor is it as we face today’s challenges.
Inflation hasn’t been caused by domestic economic activity or a “wage-price spiral” but by huge price increases in crucial imports such as energy and food, with retailers raising prices as a result.
Working people didn’t start the war in Ukraine but are paying for it.
There’s a clear alternative: the UK Government must put wealth taxation at the top of its agenda.
And we must “grow the cake” by investing to promote growth.
The wealth of the top one per cent has risen by trillions over the last decade, and economic experts estimate that even modest reforms could bring in tens of billions in revenue.
That’s money that can be used to pay real terms wage increases, invest in infrastructure, and support public services.
It’s a philosophy the Scottish Government also need to adopt.
When I asked a question on land taxes in Holyrood last week, a Minister told me in Parliament they hadn’t carried out research into a new land value tax as introducing a new tax is a “substantial matter”.
Instead, the Scottish Government has said it must make “difficult choices”, passing on the cuts to their own budget onto local councils.
This isn’t sustainable. It damages our economy. It has to be challenged.
Until we do, ordinary people in places like North Ayrshire will continue to suffer.
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