Dispelling myths about cuts

The proposed cuts to benefits and public services will have a devastating impact on the people of greater Craigavon.

Health and education are likely as the largest public sector employers to be hit hardest. The borough of Craigavon once boasted the largest manufacturing sector outside of Belfast. Hundreds of jobs in both the public and the private sector have already disappeared, with little prospects of new jobs being created.

There are currently thousands of public sector workers working in the area not to mention those public sector workers that leave the area every day to work elsewhere. The proposed cuts could potentially mean the loss of 25 to 40 public sector jobs for every 100, depending on who you listen to.

We cannot re-employ these workers in the private sector when this sector has already been decimated. Despite private sector workers in NI being some of the lowest paid in Europe, and the so-called promised peace dividend, those delegated with the task of bringing jobs to our community have failed miserably, however, that is a debate for another day.

Some of our politicians seem to have accepted as inevitable and unavoidable the myth that cutting jobs and services is somehow going lift us out of economic recession.

We are told Government debt is the highest it has ever been and that UK debt is one of the worst in the world. The International Monitory Fund (world economic outlook database April 2010) shows the UK has the lowest debt as a proportion of GDP among the G7 countries. The UK government debt is around 70% of GDP. Compare this to Government debt of the last century. Between 1900 and 1960 debt never fell lower than 100% GDP.

Following WWII Government debt reached 250% GDP and they were still able to establish the National Health Service, the Welfare State, Free Secondary Level Education and Extended Public Housing Provision.

One of the myths widely propagated by the media is that everyone will feel the pain from the impact of the emergency budget.

At a time when workers are having their wages slashed, the collective wealth of Britain’s top 1,000 multimillionaires has climbed to 335.5 billion, up 77.265 billion in 2009, a rise of 29.9 percent. Of the 29 Cabinet Ministers, 23 have assets and investments worth more than 1 million.

A study published by the House of Commons Library concluded that 72% of benefit cuts will come from women’s income as opposed to 28% from men's.

Benefits and services cuts will disproportionately impact the less well off. The average cuts in spending on the 10% of the poorest households is 1.344 or 20.5%of income, while cuts to the richest 10% of households is 1.135 equivalent to 1.6% of their income.

The increase in VAT from 17.5% to 20% is a regressive form of taxation in that it is paid at a flat rate. The lowest paid will pay disproportionately more of their income as a result.

There is really no alternative to the cuts. UNISON’s Alternative Budget suggests that 4.7 billion could be raised by introducing a 50% tax rate on incomes over 100.000.

About 5Billion could be raised from a tax on vacant housing.

It is estimated that the UK economy is suffering from a loss of 123 billion in tax revenue each year

The 123bn is lost through tax avoidance by private companies and the top 10% earners and through unpaid taxes which cannot be collected as HMRC does not have the staff due to current cuts.

This is in contrast to the estimated 0.8bn lost through benefit fraud, fraud that the Government is actively pursuing

The scrapping the replacement for Trident Nuclear Armaments will save an estimated 80billion (low estimate).

Perhaps we can talk a lesson from the Republic who are entering another plunge in the economy due to recent cuts.