The governmentâ€™s diagnosis of Britainâ€™s economic ills is wrong, and so are its cures, Fire Brigades Union general secretary Matt Wrack told his unionâ€™s annual conference today.
â€œThe government says our public sector debt is too high. Last year the debt was Â£890bn, or 62% of GDP, and Â£117bn of that was to find the bailout of the banksâ€ he said.
â€œThatâ€™s not high by international standards. Germany and Spain are the only major EU economies with a lower debt stock than Britain.
â€œItâ€™s not high by historical standards. For the entire period 1916-1971, public sector debt as a share of GDP was higher than it is now. In 1947, public sector debt was nearly four times this level, nearly 250% of GDP. But the government didnâ€™t slash services, it created the National Health Service and the National Fire Service.
â€œThe government says the public sector deficit is too high. But in 1991, John Majorâ€™s government racked up a budget deficit of 6.3% of GDP, almost the same as last yearâ€™s 7% deficit, even though this recession has been nearly three times as severe as the recession of the 1990s.
â€œThe real problem is the collapse of tax revenues. And the governmentâ€™s cures will make the illness worse. Half a million public sector workers face the axe, and so do another half million in the private sector whose jobs depend public sector contracts. A family at the bottom of the economic league will lose three times as much as a family at the top, under government plans. VAT, which hits the poorest, has been increased, and corporation tax cut. They are cutting economic growth and that will make it harder for the economy to recover.â€