Successive Scottish administrations have brought in a host of free, universal benefits since they were given control over domestic policy through devolution in 1999.

As a result, Scots get many services for free that have to be paid for in the rest of the United Kingdom. These include free care for the elderly, free prescriptions, free university tuition fees, free eye tests, and they have also had council tax levels frozen for the past five years.

But all these advantages could soon be brought to an end following a major shift in policy by the Scottish Labour Party.

Johann Lamont, the Scottish Labour leader, announced yesterday that she believed many of these universal benefits were both wrong and unaffordable.

 

She claimed that the benefits amounted to little more than electoral “bribery”.

Ms Lamont ordered a policy review of all of Scotland’s free universal benefits and wants her party to go into the next Scottish elections, in 2016, promising to end some of these benefits.

The Scottish Labour leader declared:

“I believe our resources must go to those in greatest need. Alex Salmond’s most cynical trick was to make people believe that more was free, when the poorest are paying for the tax breaks for the rich.”

And she added:

“Scotland cannot be the only something-for-nothing country in the world.”

Ms Lamont did not address the fact that previous Labour-led administrations introduced free care for the elderly, free bus travel for pensioners and free eye tests.

Ms Lamont said that changes had to be made because demands for public services were going up as Scotland’s population was ageing. She made it clear she feels it unfair that the rich get universal benefits while public services are being cut.

Ms Lamont used the example of someone earning £100,000-a-year getting free prescriptions while pensioner neighbours get their care cut.

She declared:

“I am withdrawing from the game where politicians look not at needs but at slogans and ask not how to improve the lot of the Scottish people but what we can bribe them with by claiming it is free.”

Ms Lamont’s decision to signal such a dramatic change in direction for Scottish Labour will cause some concern within her party.

There will be activists who fear that the party will lose votes if it goes into the next election pledging to axe free care for the elderly and free tuition fees.

Ms Lamont acknowledged that there were “hard-working families” who already felt they paid enough for services but she asked them to look at what other services were suffering to pay for the universal benefits.

“What price is your free prescription when an elderly relative spends five hours on a trolley in A&E?” 

The SNP’s deputy leader, Nicola Sturgeon, tried to exploit these internal Labour fears when she claimed that Ms Lamont’s internal “Commission for Cuts” would drive voters to the SNP and to independence.

She said:

“At a time when people are facing serious wage restraint and rising living costs, the council tax freeze, the abolition of charges for prescriptions, support for higher education, apprenticeships and the elderly are all part of the support we in society give to each other.

“To destroy those shared social bonds, that we all pay for through our taxes, is a disastrous approach for Labour and one that will only increase support for an independent Scotland.”

The Independent

“The obsessive fixation on cuts, and more cuts and more cuts – the favoured policy of both the right wing of the Tory party and the Blairite wing of the Labour party – is a monumental error, by far the biggest in recent macroeconomic history.

Making cuts at the nadir of a deep and prolonged recession is a self-perpetuating vicious spiral.

The time to make cuts is when the economy is recovering and not before, and even then a strong recovery is likely to bear down on any deficit far more effectively than any programme of cuts.”

~ Michael Meacher MP (Lab Oldham West and Royton) 

 

£10bn Welfare Cut On Poorest Is Wrong Policy Aimed At Wrong Target, By Michael Meacher MP

 

Monday, September 24th, 2012

Pace Andrew Mitchell, Osborne’s proposed £10bn benefit cut for poor families looks set to become the litmus test for the party conference season.  

It is almost incredible that Osborne should be demanding this when

(i) £18bn is already being sliced from benefits

(ii) no increase in taxes at all is being proposed to fill the gap

(iii) the very rich have made virtually no contribution whatever to meeting the bail-out costs

  and

(iv) extracting another £10bn from taxpayers is the wrong policy anyway, wherever the money comes from, and will be counter-productive.  

Clegg is now trying to claw back, in vain one suspects, a bit of the credibility he has so recklessly squandered by demanding new taxes on the rich, in particular targeting the top 10%.  

But Clegg is the last person who should be suggesting it if it is to be taken seriously.

We certainly do need new taxes on the rich – whether an annual wealth tax, capital gains tax at 40% (where Nigel Lawson left it before Gordon Brown lowered it to 18%), a financial transaction tax, a land value tax, to mention a few. 

It is also true that, since the wealth owned by the top 10% is estimated at around £1 trillion, a once-only 4% levy would raise some £40bn, enough to turn the economy round by investment in house-building, infrastructure, and the foundation for a ‘green’ economy via the creation of 1-1.5 million jobs. 

But what Clegg is probably proposing (if indeed he’s thought it through at all, which I doubt) is a 1% tax which might fill the £10bn black hole.

But the real argument against the latest Osborne ramp is that it won’t work, even if the £10bn were forthcoming, We need to ask, what is the reason for this gap in the budget accounts?  

It’s because tax receipts are falling faster than the budget deficit is being reduced, and this is happening because incomes are shrinking, thus also bringing down consumer spending and thence tax receipts as well as diminishing companies’ willingness to invest. 

A policy of deliberately cutting incomes and therefore the aggregate level of demand is thus counter-productive.  

It won’t work.  

It won’t reduce the deficit, it will actually worsen it.

The obsessive fixation on cuts, and more cuts and more cuts – the favoured policy of both the right wing of the Tory party and the Blairite wing of the Labour party – is a monumental error, by far the biggest in recent macroeconomic history.

Making cuts at the nadir of a deep and prolonged recession is a self-perpetuating vicious spiral.  

The time to make cuts is when the economy is recovering and not before, and even then a strong recovery is likely to bear down on any deficit far more effectively than any programme of cuts.

Michael Meacher MP’s Blog

See also by Michael Meacher: 

Epileptic Colin Traynor, 29, had massive seizure and died 3 months after DWP/AtoS ‘fit-for-work’ ruling ~ Michael Meacher MP

Related:

Only the Union Can Kill the Poor ~ Wings Over Scotland

Welfare ‘Reform’ & Historical Revisionism: ‘Reality control’ ~ Wings Over Scotland