STUC on Chancellor’s Conference Speech

October 4th 2010

Commenting after George Osborne had delivered his speech to the Conservative Party Conference, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“It is hugely unfortunate that the Chancellor has used this occasion to shamelessly repeat every distortion used to justify Coalition policy. The implications for growth and employment across Scotland and the UK are dire.

“The Chancellor tries to further embed the conventional wisdom that there is a consensus in favour of massive and rapid cuts. He invokes the ‘bond markets’ as supporters of austerity but fails to cite evidence in this regard because none exists. He chooses to ignore that the OECD’s ‘support’ for his austerity programme has been weak and inconsistent. He appears unaware that the rating agencies are wholly discredited.

“He wilfully ignores those other authoritative voices who continue to challenge Coalition policy: Nobel Economic laureates such as Stiglitz and Krugman, dozens of prominent UK and international economists, the Chief Economic Commentator at the FT and a wide range of civic organisations.

“The Chancellor deliberately sets out to confuse by claiming that anything other than strict adherence to the emergency Budget programme will provoke ‘market turmoil’. Once again, the implication is that austerity will be rewarded by the markets when evidence from the Eurozone suggests that the opposite is true. The fact is that interest rates on index-linked gilts have been 1 per cent or less for more than a year and spreads over German bunds have been 1 percentage point, or less, throughout the crisis. The market view of the UK’s credit worthiness is clearly not contingent on the cuts programme laid out in the emergency Budget.

“A mature reassessment of the fiscal position at the Spending Review is essential. It is highly likely that a new programme, one that makes consolidation contingent on growth, would be rewarded by the markets.

“The Chancellor’s brazen ignorance of the daily challenges facing those in poverty is shocking. Benefit recipients will be justifiably appalled that the Chancellor thinks the current system amounts to an ‘open ended cheque book’.

“This speech has done nothing to dispel the notion that the Chancellor’s approach is ideological not pragmatic. He describes unions as a vested interest but goes on to cite employer lobbying bodies as if they are an independent voice of reason. The British people will see through this.”

ENDS

For further information contact Stephen Boyd 0141 337 8100

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