Editorial

It’s A Growth Plan, But Who For?

On the 23rd of September, the latest UK Chancellor of the Exchequer announced to the House of Commons in London his ‘Growth Plan’.

Kwasi Kwarteng’s first reference was to the Russian invasion of Ukraine – this is a popular move by the Tories to blame all our economic woes on Russia’s Imperialist dreams. The UK economy was tanking long before Vladimir Putin’s attack on an independent sovereign nation.

The decision by the UK Parliament to leave the world’s largest free trade market, the European Union, on an advisory referendum built upon lies and misinformation, has had a much more damaging and long lasting effect than the outfall of the Russian/Ukraine war.

We are now into our 3rd year of a Covid pandemic where over 200,000 deaths have occurred in the UK and where infections spiked after ‘Eat Out to Help Out’ was encouraged by the previous Tory Chancellor. Long Covid is being suffered by an estimated 2million people which means we have a serious public health and societal issue. We have a sick workforce who are now struggling to pay the most basic of bills and fearing to take time off to recover from the longer lasting effects of the virus.

Ever wondered what spin looks and sound like?

Here’s Kwasi Kwarteng speaking about energy prices:

“Firstly, to help households, the Energy Price Guarantee will limit the unit price that consumers pay for electricity and gas. This means that for the next two years, the typical annual household bill will be £2,500. For a typical household, that is a saving of at least £1,000 a year, based on current prices. We are continuing our existing plans to give all households £400 off bills this winter. So taken together, Mr Speaker, we are cutting everyone’s energy bills by an expected £1,400 this year.”

Incredible, we will actually be ‘saving’ according to this. But, of course we’re not.

The Scottish Government has said  that the increase in the price cap to £2,500 will force an estimated 150,000 more Scottish households into extreme fuel poverty.

The UK Tory Chancellor then turned his attention to taxes. A government can use the tax system to fund vital services which we all need, particularly when 2million people have long Covid and when our NHS and Social Care staff exhausted from 3 years of the pandemic are also struggling to pay basic household bills. With taxation, a government can redistribute the money generated in a country’s economy.

Kwasi Kwarteng said:

“We need a new approach for a new era, focused on growth” with a plan “to expand the supply side of the economy through tax incentives and reform.”

What the Chancellor means by this is that, those on the highest wages will be getting the biggest tax cuts. Welfare benefits supporting the most vulnerable, pensioners and many working families – cut. “We will make work pay by reducing people’s benefits if they don’t fulfil their job search commitments,” announced the Chancellor.

“And we’ll ask around 120,000 more people on Universal Credit to take active steps to seek more and better paid work, or face having their benefits reduced.”

But what will not be cut or capped will be the bonuses for bankers. During the first dreadful months of the Covid pandemic was it the highest paid in this country who were on the frontline delivering care and services even for some at the cost of their own lives? (Up the line to death: covid-19 has revealed a mortal betrayal of the world’s healthcare workers)

Another great ploy of the Tories is to continue to blame the EU. And so it was that the Chancellor announced “a new Bill to unpick the complex patchwork of planning restrictions and EU-derived laws that constrain our growth.”. These are the protections that were negotiated and agreed to by all member countries of the EU when the UK was a member. Protections for the environment and for the use of chemicals for example.

In amongst this speech was the announcement to limit our freedoms. To limit when workers can strike. Freedoms so easily taken away by a Tory Government which no one in Scotland has voted for in 70 years.

This is your reminder that Scotland is abundant in natural resources. Scotland’s rivers and lochs contain 90% of the UK’s fresh surface water. Our renewable energy sector is a powerhouse for not just now, but the future. Scotland is the largest producer of oil and the second largest producer of gas in Europe. Our farming, fishing, food and drink sectors are producing the finest quality products with an international reputation. Our people are highly skilled and well educated.

Since the re-convening of the Scottish Parliament in 1999, Scotland has been mapping out her own future direction. Constrained as it is within the devolved settlement with limited powers for over two decades it has had to spend money mitigating UK government policies, like the appalling ‘ Rape Clause’ and ‘The Bedroom Tax’ . As we watch the UK plunge into recession and an unelected Prime Minister struggle with basic concepts, is this a UK Scotland wants to continue to be part of ?

“With a fixed Budget and no scope to borrow for short term challenges, Scotland is at the mercy of UK decisions. This reinforces the urgent need for independence, ” Deputy First Minister of Scotland, John Swinney.

The British pound fell around 3% to below $1.1 on Friday, a fresh low since 1985, after the government announced several tax cuts, in an attempt to boost economic growth. The plan includes the cancellation of a planned rise in corporation tax to 25%, keeping it at 19% and a reversal in the recent 1.25% rise in National Insurance contributions. The government estimates the tax cuts will total £45 billion by 2026-27, but investors worry that public debt levels will soar, at a time the economy is already under big downward pressure. The Bank of England on Thursday hiked interest rates for a seventh straight time to combat inflationary pressure, with policymakers saying they would continue to “respond forcefully, as necessary” to return inflation to the 2% target sustainably, despite the economy entering recession. Trading Economics

Fiona Grahame

2 replies »

  1. Seems we all have forgotten why bankers’ bonuses came under scrutiny and new regulations were applied… there was a need to rein in risky behaviour (you could also call it gambling) because the financial crisis was no walk in the park.
    The signal given now by the UK government should be seen in this context. It is not good…

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