Thursday, 15 July 2010

Even Chambers of Commerce say cuts will harm recovery‏

It is clear that businesses are anticipating the planned reductions in public spending at a Scottish and UK level to have a dampening effect on the recovery", says the Scottish Chambers of Commerce in releasing their second quarter Business Survey results today.

While they have still not totally condemned cuts and want to see them ‘managed’ with public sector reform, there are two telling statements in their press release.

Firstly "…the construction sector, which has seen some signs of increased activity, is worried over a lack of future work from the public sector".

And then, "If we are to sustain the recovery in uncertain times, the Scottish Government must continue with its programme of planned capital spending".

While they go on to latch on to ‘procurement opportunities’ to "deliver both better value to the public purse and new opportunities to local small and medium sized businesses", they must know that these are not the businesses that will benefit.

Huge outsourcing in Edinburgh and other councils is earmarking huge multinationals for the jobs, not local businesses. A fact recognised by their members in small and medium businesses on the ground, if not by the organisation itself.

But by their own statement they are recognising that the reality is that that Scottish businesses are expecting to be hit by the cuts in public spending.

And by calling for more public works projects to grow private sector jobs, they are reflecting the arguments UNISON has been making from the beginning. The public sector is not the problem, it is the solution to this engineered crisis.

Their press release clearly struggles between the logic and reality of the harm caused by public spending cuts to the whole economy, and the anti-public service ideology that pervades the business, banking and ConDem political communities.

Cuts that will benefit the very rich at the top of the capital giants while hammering the poor, throwing millions on the dole and sending to the wall thousands of the very businesses they profess to represent.

If they can see public works projects are essential to building the economy, why can’t they see that public services play the same role? Ideology, not logic.

Perhaps they should listen to the respected economist Paul Krugman, who writes, "It's almost as if the financial markets understand what policymakers seemingly don't: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating."

Or Joseph Stiglitz in the Independent, "You can't win with markets. Better to follow the right policy: supporting growth through higher spending on public investment and infrastructure, which will help the economy grow faster in the long term",

See more UNISONActive neo-liberal mythbusting at

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