Mark Lazarowicz MP for Edinburgh North and Leith

News and information from Mark Lazarowicz MP for Edinburgh North and Leith

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   The Budget - neither fair nor good for business (North Edinburgh News, July 2010)

I am very worried at the likely effects on North Edinburgh as a result of the new government's budget.

The coalition Government has claimed there is no alternative to drastic cuts in public spending because of the so-called ‘black hole’ in the public finances that it inherited.

The new independent Office for Budgetary Responsibility that it set up undermined the claim straightaway by showing that the deficit was actually less than had been thought as the economy has slowly begun to grow again.

The Budget revealed the true face of the Coalition with savage cuts to spending that were clearly a matter of choice not necessity.

By choosing to place the burden on the vulnerable it showed its priorities – rather than continuing the last Government’s attack on tax evasion it is

  • cutting benefits for the disabled and tax credits
  • axing grants for new mums
  • freezing child benefit, and
  • slashing housing benefit which will especially affect people in Edinburgh where rents are high

The increase in VAT will hit the poorest hardest too and by forcing households to cut back on spending is bound to affect shops and small businesses.

It is not just harsh but short sighted as the axing of the Future Jobs Fund shows. This offered a guarantee of work or training to young people unemployed and created over 15,000 jobs in Scotland. It was one of the reasons that the impact of this recession has been much less sharp than those in the 80s and 90s.

Schemes like this were not examples of waste in the public sector but were carefully targeted to support young people unemployed, matching them to jobs that needed to be done in the local community so they didn’t start their adult lives on benefit and disillusioned.

The latest unemployment figures show a fall in the number of people signing on – from 4.8% to 4.6% in Edinburgh over the last three months – but the recovery is still in its early stages.

In the long term the only real way to make sure the public finances are on a sound footing is to get the economy growing again in a sustained way. That is why it was really disappointing that the Budget provided no encouragement for green industry which could provide new skilled jobs as part of the recovery.

Far from us ‘all being in it together’ as the Coalition has claimed, the Budget was neither fair nor good for business. Under the last Government, public spending rose because of the need to deal with the financial crisis but this Budget will make the most vulnerable in our society pay the cost rather than those that caused it.

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