The Scottish National Party (SNP) is passing on the Con-Dem cuts and throwing in a few of its own. Pay, pensions, jobs and services were all targeted for cuts in Finance Secretary John Swinney’s first Spending Review earlier this year.
Scotland’s local authority workers already faced a three-year pay freeze. Now, as a result of Swinney’s announcement, the pay of all public sector workers in Scotland is be frozen not only for this year but in 2012 as well.
If there is a pay rise in two years time (a big if), it will certainly be less than the rate of inflation.
With inflation running at over 5% this across-the-board public-sector pay freeze will mean falling living standards for hundreds of thousands of workers.
Given that Scotland has a higher proportion of jobs in the public sector than the rest of the UK, the resulting fall in consumer demand will have a knock-on effect on the rest of the economy.
Wages will also be badly affected by Swinney’s decision to increase public sector pension contributions by 3.2%. This increase will apply to workers employed in the NHS, the civil service, schools, the fire service and the police, but not to local authority employees.
Unison has declared itself in a trade dispute with the Convention of Scottish Local Authorities and will proceed with an industrial action ballot among local authority members.
The government will not be increasing the grants it pays to local authorities in order to compensate them for their declining income, in real terms, from the council tax (frozen since 2007, and the SNP is pledged to keep frozen for another five years).
On the contrary, the SNP is “reprofiling” local authority finances. What this means in practice is straightforward: pay them less, force them to borrow more, saddle them with the interest payments on the money borrowed, and, at some later date, promise to pay them the money that has been withheld from them.
Local authorities will see a total of more than £700 million cut from their budgets in the immediate future.
According to Unison, 31,000 local authority jobs were due to be axed between 2010 and 2012. Swinney’s announcement will result in even more.
Despite SNP promises to protect health spending, the budget for health will fall in real terms by nearly £200 million. Worst affected in the NHS will be spending on new capital projects.
The budget for further education is being cut by £74 million. Funding for the voluntary sector is being cut by over £4 million. Funding for Historic Scotland will be cut by nearly 25%, while the budget for the National Records of Scotland is slashed by nearly 30%.
£20 million is to be cut from the legal aid budget, and £15 million from the prison service budget. Spending on maintaining Scottish Water’s pipe network is being slashed by £120 million. Spending on agriculture and fisheries is to be cut by £65 million.
All these cuts in funding will result in round after round of job cuts.
Despite Swinney imposing a levy on big retailers — a revamped version of the so-called “Tesco tax” which the SNP failed to get passed when it was a minority government — there is nothing pro-the-people and anti-big-business about Swinney’s Spending Review.
The 1 October Scottish TUC demonstration against public spending cuts should signal a mobilisation not just against the Con-Dem cuts but against the SNP ones as well.
It has to build support for strike action on 30 November, and step up pressure on Labour-controlled local authorities in particular not to implement the cuts.