1 November, 2010
Austerity cuts in the UK will hit the poorest families many times harder than the richest, as the Tory/Liberal Democrat coalition government makes the poor pay for the financial downturn.
Chancellor of the Exchequer George Osborne’s emergency budget of June was found to cut the country’s poorest families’ average income by 21.7%, six times more than the richest.
The Institute of Fiscal Studies’ analysis of the Cameron government’s regressive cuts in social spending conclude clearly that the tax and benefit changes increase the gap between rich and poor in the UK.
The Trade Union Advisory Committee to the OECD (TUAC) last week criticized the OECD for backing the public spending cuts, and found that backing to be inconsistent with the Organisation’s stated objective of prioritizing job growth coming out of the crisis.
TUAC points to estimates that the cuts will create one million job losses over the next five years, half in the public sector, and a further half-million jobs in the private sector through knock-on effects.
Massive cuts to public spending can only create high unemployment, increase pressure on the poor, damage the economy, and risk a “double-dip” recession.
Trade unions around the world are outraged by this trend, especially in Europe, of austerity cuts which make the poor pay for the economic crisis. The cuts are completely against the position of the Pittsburgh G20 a year ago, where world leaders pledged to develop action for economic recovery with placed “quality employment at the heart of the recovery.”
At the same time as working people in the UK are being hit hard by Prime Minister David Cameron’s austerity cuts, figures were released last week indicating that the average boardroom executive has seen their salary rise 55% over the last year. The top chief executives in Britain earned £4.9million last year, 200 times the average wage. The third highest-paid CEO of a UK company was Mick Davis of mining giant Xstrata, earning £26.9million last year. Total earnings of the top 100 UK companies fell by 1.5% during the first half of the crisis.
“These mega-pay rises blow away any claim that we are all in this together,” stated TUC General Secretary Brendan Barber.