STUC initial Budget Reaction

March 21st 2012

treasury

Responding to the Chancellor’s Budget statement, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“The UK economy is facing a crisis of high and rising unemployment and a precipitous fall in the living standards of ordinary workers and their families. Yet the Chancellor has responded with a ‘millionaires Budget’; one that provides tax cuts for the wealthiest individuals and corporations. It seems that the top rate of tax will no longer be determined by the interests of the nation but what society’s wealthiest are prepared to contribute to the common weal.

“The Chancellor’s justification for cutting the 50p tax rate to 45p is simply risible. To base the ‘evidence’ on one year’s data which he himself acknowledges as incomplete is disgraceful. Raising the personal allowance is a transparently cynical gimmick aimed at pulling a façade of fairness over a shockingly unfair Budget. This measure does nothing for society’s poorest who pay no income tax, benefits most those at the top of the income distribution and fails to stimulate the economy. Low and middle income workers, hit hard by cuts in public services and falling real wages will see right through the Chancellor’s games.

“Predictably, the Chancellor seeks to boost profitability for his friends in the corporate sector; a sector which is currently sitting on a mountain of cash which it is refusing to invest. Why would it when demand for goods and services is so weak? The cut in corporation tax will simply boost profitability – and the income of the wealthiest in society – while doing nothing to increase growth and jobs. Interestingly, the OBR seems to agree that the tax changes and raft of supply side measures will have little impact because it has not raised its growth forecasts from 2014 onwards.

“The economy has been in a depressed state for over four years. Unemployment continues to rise and the coalition’s attack on workers and services has undermined confidence. There is nothing in this Budget to address the immediate challenges or build a new model of growth in the longer term.

“However, the Budget has provided a boost to the incomes of an already prodigiously wealthy top 1% of earners and to corporations. They may have got what they want but the STUC has no confidence whatsoever that investment and jobs will grow as a result”.

ENDS

Contact

Stephen Boyd 0141 337 8100

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