5 Dec 2012

The alternative autumn statement

As Chancellor George Osborne delivers his autumn statement on the economy and spending, we gather some alternative suggestions on to how to tackle the country’s fiscal woes.

Chancellor George Osborne's autumn statement comes later - but first, some alternatives (Getty)

The predictions for Chancellor George Osborne’s autumn statement 2012 are bleak.

The UK’s economic prospects remain lacklustre but the chancellor wants to keep on track with his deficit reduction plan – which means spending cuts are likely.

Experts have suggested that the mini-budget is set to hit both ends of the scale, with a wealth tax on the rich and a new series of welfare cuts.

But is his way the only way? Organisations, charities and analysts queue up to pick apart the chancellor’s statement the moment he delivers it. But what about if the nation’s budget was in their hands – how would they do it? Channel 4 News asked them for their alternative autumn statements.

John Sauven, executive director of Greenpeace

Mr Speaker, let me start by saying this is a statement for green growth, for investment, for UK industry, for families, for the economy and for our collective future.

I have listened hard to British investors and businesses, and I have listened to the challenges facing British households. And that is why it gives me great pleasure today to pull the plug on my much-touted dash-for-gas.

Let’s face it – it was reckless, short-sighted, and, as it turns out, didn’t even make any fiscal sense.

In line with a major new Cambridge Econometrics Report released this week, which finds that investment in offshore wind would create more jobs and generate higher GDP than reliance on gas-fired power, with only marginal impacts on electricity prices, I am announcing a roadmap for a carbon-free electricity system by 2030.

It dawned on me that by putting all my eggs in the gas basket, I was missing a trick. Greenpeace’s John Sauven – as George Osborne

Yes, it’s what everyone’s been saying for ages I should do – from M&S, to my coalition partners, to Microsoft, to the Women’s Institute, to the world’s biggest wind turbine manufacturers who threatened to pull billions in investment out of the UK unless I gave a clear signal that I support greener electricity.

Well I listened, and I do! I realise now that by increasing the UK’s reliance on expensive, volatile gas imports, I’d be putting households and families at risk of ever higher power bills. And thanks to my father-in-law Lord Howell – bless him – I now know that increased reliance on gas from places like Qatar could leave us “up s**t creek” it really could.

It dawned on me that by putting my eggs in the gas basket, I was missing a trick; especially because it would mean knee-capping a UK success story. The green economy provided one-third of all UK growth in 2010 – that’s an extraordinary performance at the best of times, and these are not them.

Mr Speaker, I hereby commit to supporting the low carbon sector which, under my nose, seems to be growing and must define our future.

Sam Bowman, policy director of the Adam Smith Institute

The government's first priority should be stimulating private sector growth. The deficit reduction plan is reliant on much sunnier growth than seems likely. As a result, we need a supply-side revolution to save the economy.

The first step should be to release small and medium-sized enterprises (SMEs) from the most harmful taxes and regulations. 99 per cent of all firms in Britain are SMEs, and they account for 59 per cent of private-sector employment.

Employers' National Insurance contributions, a direct tax on jobs, should be abolished for SMEs altogether. According to surveys of businesses by the Federation of Small Business, this would create more than 500,000 jobs. The £25bn cost of this measure would be offset by the reduced welfare spend and new tax revenue from newly-employed workers.

The cost to business of complying with business regulation is significant for many of these firms – £22bn from domestic regulations and a staggering £100bn from EU regulations. An urgent deregulation agenda should be implemented that makes it easier for these firms to hire and fire employees, simplifies compliance to reduce legal costs, and makes it easier for SMEs to register employees as self-employed under contract so that they can bypass many costly employment regulations.

There are several reforms that could be implemented at no cost to the government at all that would help to stimulate the economy. Radical planning reform to make it easier to build would create "shovel-ready" jobs in the construction sector and go some way towards addressing the looming housing crisis. And scrapping the immigration cap would allow businesses to hire the best workers the world has to offer, instead of choking off the supply of human capital at the time when we need it most.

We need targeted tax cuts and broad deregulations for SMEs to be able to produce our way out of the hole we're in.

Anna Walker, spokeswoman for UK Uncut

An estimated £25 billion is lost annually through tax dodging, showing that this country isn’t running out of money, it’s just that the richest and most powerful individuals and corporations are not paying their fair share. The UK isn’t broke – what is broken is when a political system claims to promote the “big society” while the only things getting bigger and bigger are unemployment, inequality and anger.

Recently, this anger has bubbled over with the tax avoidance schemes of the rich and mighty. The poor paying their taxes, the rich – like Starbucks – none at all, is clearly completely unjust. Yet George Osborne does not have the authority to label tax avoidance as immoral because the government has directly benefited from, encouraged and rewarded those who avoid tax.

The poor paying their taxes, the rich, none at all, is clearly completely unjust. Anna Walker, UK Uncut – as George Osborne

The government must now close the loopholes that Starbucks and other companies use to avoid paying billions in tax to the UK, instead of targeting single mums and disabled people through slashing public services, the welfare state and privatising the NHS. We don’t need cosmetic changes, or promises of months of talking – Osborne needs to take urgent action to tackle widespread tax avoidance by some of the biggest companies in the UK.

New research published this week has shown that this government, by itself, could recover up to £5.5bn each year through introducing a General Anti-Avoidance Principle. It could legislate to force companies to show that the things they do try and lower their tax bills do have some basis in the real world, which could be pretty hard if you are claiming your coffee beans come from Switzerland like Starbucks do.

This is just a start – the UK should act to tackle its own enormous network of tax havens like Jersey and the Cayman Islands, invest massively in jobs at HMRC and push for a proper overhaul of the international tax system, not just tweaking around the edges.

Jeremy Todd, chief executive of Family Lives

Families that we are in contact with are telling us stories of real economic hardship which is leading to family stress. The needs of the family are changing and as a society we must listen and adapt to meet these needs. To misquote Harold Macmillan's infamous remark, it's clear that parents have "never had it so tough" as they do today. 

And that is why we would invest additional funds into family support with the emphasis on early years. The scale and intensity of the challenges of family life in Britain today are growing and now is the time for the government to invest in effective family support to deal with the impact of the recession. The government acknowledges that the quality of parenting is the single most important determinant of the life chances of a child, and that the strength and stability of adult relationships in the family are vital to the well-being of children.

However, with families saying that their single biggest worry is making ends meet with the family finances, and the conflict and stress that this causes, Family Lives would invest funds to ensure targeted and universal services work more effectively to refer families for relationship support and should also encompass parenting support, which is a crucial measure to cost savings.

Alternative autumn funding would be directed to target and identify existing barriers to - and demonstrate the benefits of - allowing employees to work flexibly. More financial investment should centre on ensuring that families have a genuine choice of affordable childcare, easing the burden on grandparents and ensuring that children get the most appropriate care at each point in their development and childcare must be prioritised in government spending plans throughout the period of sustained austerity that the UK faces.

Planned changes to housing benefit, working tax credit and child benefit need to be reconsidered to ensure that families are not punished when they are already struggling.

Ceri Goddard, chief executive of the Fawcett Society

As austerity takes hold, women are bearing the brunt of cuts. We are in the grip of a 24 year high in women’s unemployment, while measures to reduce the deficit have seen welfare cuts fall primarily on women’s shoulders – to date, a total of £14.9 billion worth of cuts per year have been made to benefits, tax credits, pay and pensions, with 74 per cent of this taken from women’s incomes.

In effect, more than two thirds of the savings coming from re-organising tax and welfare system have come from women’s pockets.

More than two-thirds of the savings coming from re-organising tax and welfare system have come from women’s pockets. Ceri Goddard, chief executive of the Fawcett Society – as George Osborne

The autumn financial statement 2012 must not unveil more of the same, and further detail on the latest plans to reduce the welfare bill must be looked at in light of the way they will impact on different groups, in particular women. It is not right to make women act as shock absorbers for the cuts, but a “salami slice” approach to reducing the welfare bill is doing just that.

The chancellor should also commit to a robust women’s employment strategy that includes measures to address the anticipated hundreds of thousands of female job losses from public sector cuts, protects against heightened workplace discrimination in austere times and shows how government plans to enables women to fulfil their potential in supporting economic growth.

We are also really concerned by moves to “regionalise” public sector pay. The gender pay gap in the public sector is far smaller than in the public sector. Driving down public sector pay to reflect private sector wages will cancel out many of the gains made in women’s pay over recent years and, for the first time ever, risks reversing progress made on closing the pay gap between men and women.

Scope chief executive Richard Hawkes

If the government is serious about a Paralympics legacy where disabled people can fulfil their potential, then it's time to use a different tone when it comes to talking about welfare. The chancellor's autumn statement would be the perfect opportunity to start.

The vast majority of disabled people, those who are unable to work as a result of their condition or impairment or even those in work, need support.
They aren't feckless, they aren't workshy and they aren't scroungers. In today's climate it sometimes feels like heresy to say it. But benefits are critical and play a crucial role in enabling people to live their lives.
Every Paralympic athlete will have had some state support at some stage in their lives and careers. We do everyone a disservice if we squeeze support to the bare minimum people need to survive not live.
We know times are tough for everyone but disabled people are being hit harder than most. They face a triple whammy of cuts to their benefits, cuts to local services as local authority budgets get squeezed and an ever increasing cost of living.
We understand the government has to save money, but a benefit freeze is effectively a benefit cut and we vehemently oppose it.

If the government spent half as much time, money and effort tackling corporate tax evasion as it does on weeding out the 0.5 per cent cases of benefit fraud, perhaps we would be able to start the conversation by looking at the support disabled people need to live their lives rather than what can we take away to save money.