Salmond warns Osborne: Westminster austerity won’t cut it for Scotland

Salmond warns Osborne: Westminster austerity won’t cut it for Scotland

Chancellor George Osborne will today announce the UK government’s autumn statement, outlining £5bn in cuts that are set to extend austerity into 2018.

The cuts will hit the Scottish government’s budget however according to the Scotsman, less than the UK average – 0.2 per cent in 2013/14 and 0.4 per cent in 2014/15.

The treasury will cut £5bn from already struggling Whitehall departments to invest in transport, schools and science projects.

Whitehall departments, excluding only four, will be expected to save in increasing measures – an extra 1 per cent (£950m) next year and another 2 per cent (£2.5bn) in 2014-15

The treasury claims that it will follow International Monetary Fund (IMF) recommendations that cuts should reflect necessary everyday spending and aim for long-term recovery rather than deliver a short-lived boost to the economy.

However, this prolonging of cuts will mean that austerity measures are set to continue long after the 2015 general election, reminding the UK that an exit from austerity cannot be simply achieved by a change in government.

In England, other than education, heath, international development, nuclear decommissioning and HM Revenue and Customs will be safeguarded from the cuts, but Scottish Ministers will make their own decisions regarding the distribution of Scotland’s share of the UK cuts.

Of the Westminster imposed cuts, First Minister Alex Salmond said:

“Increasing capital investment by simply cutting departmental budgets will not achieve the increase in demand in the economy that is so urgently needed – this investment must be additional.

“Unlocking additional funds for investment in public sector capital projects through the use of the UK government’s borrowing powers would provide an immediate and targeted stimulus across the three devolved nations,”

Futile Cuts?

Questions have arisen following recent revelations about tax avoidance from major corporations including Amazon, Starbucks and Google and VAT loopholes on digital sales which costs the UK more than Olympics.

Many have been bewildered as to why so many tax and loopholes continue to exist with £1.6bn lost from buying services from overseas companies each year alone.

Similarly with the Libor scandal, where major UK banks including Barclays and RBS were amongst those rigging the rates at which they borrowed from other banks – an accurate cost to the UK taxpayer is unknown, but the manipulated interest rates are tied to around $800 trillion in loans and securities.

It appears to many critics that the UK government is ready to deliver tough austerity cuts which hit ordinary taxpayers. However City financiers, who triggered the financial crash in 2008 and resulting in the economic crisis, remain too big to fail.

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