IN today’s pre-budget statement, George Osborne has failed to deliver the economic “reboot” Britain desperately needs.
He reaffirmed this government will continue to focus on enabling large multinational companies and rich individuals to reap private profits at public expense, while dismissing its responsibilities to safeguard our wellbeing, our economy, and the environment on which they both depend.
He failed to provide a framework for direct investment in renewable energy and energy conservation, in public services, public transport and public goods, which are all essential to a prosperous and sustainable future.
Responding to the statement, Green Party Leader Natalie Bennett said: “Osborne continues to ignore the growing chorus of advice that when you are in a hole you should stop digging. In deepening the cuts and prolonging austerity, in continuing investor uncertainty and taxation that favours the wealthy, he is sentencing more Britons to unemployment, more families to insecurity and debt, and more small businesses to death.
“When it comes to the economy, this government keeps saying one thing and doing another, continually misleading the public. Osborne again has the audacity to claim government ‘credibility’ as the reason for low bond yields, which have fallen to record lows despite borrowing having soared under this government.This debt scaremongering - debunked by experts at the IMF and NIESR - is being used as a smokescreen to implement politically motivated spending cuts while wealthy individuals and multinational corporations are allowed to pay an unconscionably small share of their income in tax, which today has been cut further still.”
“If Osborne really wanted to reduce the deficit or fill the tax gap of £35[1]bn to £120bn[2] he wouldn’t have slashed HMRC staff by 10,000 and funding by £2bn in 2010, relative to which a £77m increase appears cynical at best. Nor would he have rejected a proper General Anti-Avoidance Principle or slashed tax rates by 75%[3] for multinational companies with subsidiaries in tax havens, as he did in 2011 and which he has not reversed. And he’s proudly boasted about further cutting tax rates for large corporations from 28% in 2010 to a historic low of 21% in 2014, when what we need is for companies to pay their way.
“A private banking debt crisis has been dumped upon the public, while the Bank of England has subsidised City profits with £375bn in quantitative easing, yet banks have refused to lend to the real economy. Our historically unremarkable debt to GDP ratio is not our current problem. Instead we are suffering from insufficient investment and haemorrhaging investor confidence due to confused and contradictory policies. And growing inequalities mean that households lack the money for essentials, while local economies flounder.
“Austerity leads to economic contraction, greater unemployment and welfare costs and lower tax revenues, which increasesthe deficit, as do Osborne’s tax cuts for the wealthiest. The public deserves an honest government, which should acknowledge that the deficit rose after 2007 due to the banking crisis and accept responsibility for making it worse with its dogmatic and self-perpetuating austerity measures. The impacts of Osborne’s wilful economic mismanagement are being exacerbated by his ridiculous spending rules: a rolling deficit target that he never has to achieve - it always remains 5 years away - and a debt target for 2015 that is completely arbitrary.Both should be abandoned.”
The Green Party has consistently highlighted the damage done to the lives of millions by £24 billion in cuts to the welfare budget, with a further £10bn in cruel and unnecessary cuts announced today. The further cuts today – a 1% freeze for three years – will plunge already suffering households further into debt and desperation.
Natalie said: “While claiming to champion localism, this government refuses to take responsibility for its politically motivated cuts, instead passing the buck to local authorities who are forced by Treasury funding cuts to remove essential services, raise council tax or do both. As a result, the greatest burden for the banking crisis is borne by people who need the most support, such as those with disabilities who rely upon services that are being cruelly refused or whose funding is being needlessly withdrawn. The impact upon women is also particularly severe.
“It is also self-defeating, in that a recent London School of Economics study for the Local Government Association has demonstrated how key council services that have the most influence on local economies are worst affected by government austerity.”
The Green Party has frequently highlighted the costly, inefficient and disastrous impact of Private Finance Initiatives (PFIs), devised by the Tories and so widely applied by the former Labour government as an extortionate way to fund schools, hospitals and offices. Natalie said: “Osborne is simply rebranding the flawed scheme, making a few cosmetic changes and forging ahead at the cost of our future. ‘PF2’ will remain an attractive means for unaccountable companies to fleece the taxpayer for private profit.”
Meanwhile, Brighton Pavilion Green Party MP Caroline Lucas said Osborne’s “dash for gas” would have a ‘hugely damaging impact’ on bills and environment.
Caroline said: “While we know that gas can play a small part as a bridging fuel as to move to greener sources, the government’s decision to sign off upwards of 30GW of new gas simply flies in the face of warnings about the consequences of a ‘dash for gas’ on both consumer bills and legally binding climate targets. If the Chancellor was really serious about keeping people’s energy bills down and improving energy security, he’d put his money on renewables – where the costs are entirely predictable and falling all the time – efficiency, and reducing energy demand, rather than deepening our dependence on polluting gas, where prices are set to keep rising.”
Natalie added that the Chancellor’s freeze on fuel duty was entirely the wrong decision, and would leave a black hole in the budget that the Chancellor based on past performance would be filling by further public service cuts.
“We understand that many households are struggling with the cost of petrol in addition to rises in food, housing and heating, but the fact is that over the past 10 years the real cost of motoring has declined by 10%, while bus and train fares have increased by more than 50%. We need government investment in public transport and active transport to provide affordable, low-emission alternatives.”