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It's not all over yet

The eight-year programme of cuts to budgets for running Scottish public services is only 40% over.

The analysis, by the Centre for Public Policy for Regions (CPPR) in Glasgow shows 60% are still to be applied between this year and 2017-18. The deepest cuts in that will be towards the last two years of the spending period. A £2.7bn real terms projected cut in resource spending still to come will be increasingly hard to accommodate, especially given the £1.8bn already experienced since 2009-10.

Professor John McLaren, one of the authors of the study, said: "The day-to-day, or resource, budget cuts still to come include some of the harshest annual reductions seen over this period".


The Crisis

A crisis is caused by capitalists choosing not to buy, that is, not to invest profits because they judge they won't make any profits or not enough. Workers cannot be indifferent to a crisis, no matter how much we are disgusted by the predictable pendulum swing between “boom” and “bust”, because our lives can be directly influenced by today’s financial turbulence. But at the same time, we have no interest whatsoever in thinking up ways to put capitalism “back on track” or make it “healthy” again. Even when the system is in tip-top shape it works directly counter to the interests of workers. The crisis will not miraculously or mechanically turn every worker into a socialist, as some hope, but it does at least create a situation where socialists may find workers more willing to consider an alternative to capitalism. It is up to us, as socialists, to present that alternative in a convincing way based on our understanding of the essential nature and limitations of the capitalist syste…

A crisis of capitalism

The problem of the crisis is gaining the attention of people worldwide. This is because the present crisis is of unprecedented scale, and unparalleled seriousness and tenacity, have struck throughout the world. Representatives of the two classes in society are seriously engaged in the study of this problem with a rare level of seriousness; economists for the sake of somehow forging a path to stable capitalist production, and Marxists to provide a scientific basis for their tactics in this momentous period. As long as bourgeois economists maintain their capitalist perspective, they are incapable of understanding the problem of crisis. We socialists pointed out that it was not the bankers and financiers but the capitalist, system which was at fault.
To-day, the recession is still as intense than ever, at least, in regards for the working class. Workers in countries all over the world are faced with a world crisis of capitalism. Now genuine questions of survival, issues of actual life …

Capital's apologists

Blair Jenkins, chief executive of the Yes Scotland campaign, claimed that Scotland “might very well not have had a financial crisis” if it had been an independent country. This is a ridiculous claim. Some commentators have argued that, if Scotland had been independent, the banks would have been better regulated. The Scottish equivalent of the FSA would have stopped them from pursuing self-destructive courses, barred them from ballooning their balance sheets with dodgy loans and toxic assets, and insisted on higher capital ratios. There’s absolutely no reason to believe that it would have been any different.

The idea that Scotland’s banks – RBS and HBOS, whose combined assets were 21 times Scotland’s gross domestic product at the time of their near collapse (for the sake of comparison, Irish banks’ assets were 4.4 times Irish GDP at point of their October 2008 collapse, and Icelandic banks‘ assets were 9.8 times times Icelandic GDP) – would have been better-regulated if Scotland had b…

Three countries - same story

The annual assessment of hunger and homelessness conducted by the US Conference of Mayors reveals that the number of homeless people in 25 large cities has increased by seven percent since 2011. It also says that about 20 percent of the hungry do not get any help, and that social services are being forced to turn them away empty-handed. Half of those seeking food assistance are families and nine percent are homeless. The survey has also found that the lack of affordable housing, rising poverty and unemployment are the root causes of homelessness among families with children.

The British government’s new benefit cuts that will hit working-age people could be “devastating” and dramatically increase poverty, says leading British anti-poverty charity Oxfam.

“This Bill will effectively mean a permanent reduction of benefits, which could be devastating at a time when a proper safety net is desperately needed by millions of the most vulnerable people in Britain,”
said Oxfam UK poverty directo…

The outlook is bleak

Some 26 of 30 countries covered by the Organization for Economic Cooperation and Development have shown a falling labor share of national income since 1990. International Labor Organization (ILO) data show the gap between the top 10% of earners and bottom 10% increased in 23 of 31 nations since 1995. Between 1999 and 2011, average labor productivity in developed economies worldwide increased more than twice as much as average wages. Real average monthly wage growth worldwide, excluding China, fell to 0.2% last year from 2.3% in 2007. Unemployment might have been higher than it might had it not been for reduction in working hours, shorter working weeks, cuts in overtime and even job sharing in exchange for keeping jobs.

The United Nations bodY focuses on how the shrinking share of the pie going to workers was one cause behind the credit bubble. The falling share of national output going to workers in the decade before the crisis ended up boosting household debt as workers tried to ma…

The Swindled Scots Again

A previous post concerned the Darien Scheme. Not many Scots however know of Gregor Macgregor, Prince of Poyais, Poyais being not far up the Central American coast from Darien. Gregor MacGregor was born in Glengyle in Stirlingshire and claimed direct descent from Rob Roy. He was a soldier and mercenary who fought in the South American wars of independence. 

Upon his return in 1820 to Britain, he claimed to be cacique ["prince"] of Poyais, a Central American country that MacGregor promoted to investors and colonists. Poyais, was an independent nation on the Bay of Honduras. He claimed that a native chief King George Frederic Augustus the First had given him the territory of Poyais, 12,500 sq. mile of fertile land with untapped resources. Gregor presented himself as His Serene Highness Gregor I, Prince of Poyais and his beautiful wife as the Princess of Poyais. No-one questioned their bona fides; instead they were welcomed into the ranks of the elite and were the toast of socie…

Poor as a church mouse!

In a hard-hitting speech to the General Assembly of the Church of Scotland, businessman Professor Charles Munn said that, as a society, “we have made a mess of our economy and in the process have done a lot of damage...We are party to growing inequality, rising poverty, rising homelessness,” he said. “The rich are doing ok. The poor are getting poorer. “And it’s not just the poor that are getting poorer, pretty much everybody else is suffering as a result of the economic crisis.”

Rev Ian Galloway, departing convener of the influential Church and Society Council, attacked the UK government’s deficit reduction strategy, saying “If austerity means we all have to tighten our belts – and maybe especially those who can most afford it – then so be it. But what is really happening is that the most vulnerable are being punished out of all proportion.” He said that while austerity had a “stiff upper lip quality about it”, the reality was “somewhat different”. “Food banks, places for desperate …

What's in store

Scotland's struggling shops have been dealt a fresh blow today as figures reveal that the numbers of shoppers plunged in the run-up to Easter. Retailers reported a 12.6 per cent drop in footfall in the three months to the end of April, outstripping the 2 per cent fall posted for the UK as a whole.

Ian Shearer, director of the Scottish Retail Consortium said "...the essential picture remains of consumers lacking confidence, disposable incomes still being squeezed and fewer people shopping for anything that isn’t an immediate need."

Richard Dodd, a spokesman for the SRC, explained: "Scotland’s shops have been trailing behind the rest of the UK for quite some time now, about a year. Fundamentally, that’s because a bigger proportion of Scotland’s economy is dependant on the public sector. So public sector cuts – either real cuts or just the fear of them – have a much greater impact in Scotland.”

Property experts warned that the rapid growth in online shopping meant the da…

doom and gloom

Scotland faces "five more years of pain" with unemployment rates expected to outstrip the UK average and hit their highest level in almost two decades, a think tank has warned. By 2016, the Scottish unemployment rate will be close to 10%, according to the Centre for Economics and Business Research.

Economist Rob Harbron, one of the report's authors said "The outlook is tough for UK households, particularly those in places with a high dependency on public sector employment. Family budgets are being squeezed between the pressures of rising unemployment, low earnings growth and stubbornly high inflation."

http://www.heraldscotland.com/politics/political-news/scotlands-jobless-will-suffer-five-years-of-pain.17520316

shops and shoppers disappear

One in nine Scottish shops is lying empty as the retail sector slowdown shows no sign of easing, new figures have revealed. Scotland’s store vacancy rates stand at 11.1%.

Stephen Robertson, British Retail Consortium Director General, said: “Fewer people are shopping because households are facing high inflation, low wage growth and uncertainty about future job prospects.”

Colin Borland, spokesman for the Federation of Small Business in Scotland, said “Hard-pressed families are reviewing every pound in their weekly budget. People are thinking before they buy and that, of course, has a knock-on effect on foot-fall and wider business confidence. As soon as people start to see vacant units appearing in high streets, it is almost as if they are contagious. It gives the impression the area is on the way down and means there is less economic activity to sustain remaining businesses.”

capitalism won't collapse

Official figures released last month by the Accountant in Bankruptcy showed that a record number of Scottish firms went to the wall in the three months to 30 June. The number of Scots companies failing rose by 19.7 per cent quarter-on-quarter.

Matt Henderson, business recovery and insolvency partner at accountancy firm Johnston Carmichael, said: "This makes for truly miserable reading, particularly when we see the stock markets in global meltdown."

"I believe that many of these failures are among smaller Scottish firms and that some will simply be victims of larger firms going bust. The 'domino' effect of larger firms taking smaller firms with them is well known but I have seen many examples of firms who were not massively in debt but who simply lost their order book when a larger company went bust."Bryan Jackson, corporate recovery partner at accountancy firm PKFwarned: "I have continued to see many long-established, well-known businesses going bust. S…

unemployment

Areas such as West Dunbartonshire and East Ayrshire have overtaken inner London boroughs as the hardest places in the country to find work, with more than 40 candidates chasing each job, TUC analysis has revealed.

"Dozens of towns and cities have more than 10 dole claimants chasing every vacancy and areas on their doorstep are not faring much better. It's not good enough for ministers to brand those out of work as feckless and claim that there are plenty of jobs out there. The reality is very different." TUC general secretary Brendan Barber saidIt doesn't matter where you live, deprivation is a world problem.

recession news

The typical household will see its disposable income fall by 2 per cent this year, the equivalent of £780, an economist warned today. Roger Bootle, a former government adviser who now works with Deloitte, the accountancy firm, predicted that 2011 would be the worst year for household finances since 1977 – and added that if interest rates were to rise, British families would not have seen conditions deteriorate so badly since 1952.

Said Mr Bootle. "I think this year will see falling real earnings, falling real house prices and rising unemployment."

Cameron threatens the unions

In his first television interview of the year, Cameron, facing a possible spring of discontent as unions consider co-ordinating strikes against public-sector cuts, sent a tough message against any militant action. "Striking is not going to achieve anything and the trade unions need to know they are not going to be able to push anyone around by holding this strike or that strike or even a whole lot of strikes together – they can forget it,” he declared.

Bob Crow, general secretary of the RMT union countered: “If David Cameron thinks he can batter working people into the dirt through his undiluted brand of fiscal fascism, then he’s got another think coming.” He added: “Millionaire public schoolboys, who are insulated from the lives of working people taking the daily hit of VAT increases and spending cuts, are in no position to tell the unions what we should and should not be doing to defend our members.”

Grahame Smith, the STUC general secretary Cameron was deliberately raising the …

wages or jobs?

Cuts in public spending could wipe out up to 125,000 jobs in Scotland – about 5% of the working population – within the next financial year, union leaders have warned. Unison, said 60,000 public-sector and 65,000 private-sector jobs could be lost north of the Border because of spending cuts.

“The recruitment freeze is already condemning a generation of young people – many of whom have trained for years – to unemployment..." the union explained

Aberdeen City Council's SNP-LibDem coalition voted in December to begin negotiating with the unions about a 5% pay reduction, which would remove the need to shed about 1000 members of staff.

The Recession - it is a death sentence

The World Bank is issuing even bleaker warnings about rising poverty and hunger in the developing world. Initially, it estimated that 46 million people in developing countries could be pushed into poverty. Now, that level is up another 7 million.
“We estimate that about 130 million people were pushed into poverty from the food crisis and if you add the financial crisis on top of that we are estimating that about 53 million more people could be pushed into poverty as a result of the financial crisis,” World Bank Managing Director Ngozi Okonjo-Iweala said

The World Bank estimated that the current financial downturn may add between 200,000 and 400,000 additional infant deaths per year on average in the 2009 to 2015 period. That means a total of 1.4 million to 2.8 million more infant deaths, if the financial strain continues.
"...When you talk about the financial crisis becoming an unemployment crisis in the developed world, in the developing world for many poor people it’s not an i…

forgotten victims

Charities estimate that more than 8,000 buy-to-let properties could be repossessed in the coming year, with at least 10,000 people being made unexpectedly homeless. In some cases families are given no warning at all, sometimes returning home to find locks had been changed and their possessions out on the street.In one instance a family had to spend the night sleeping in their car, before being moved into emergency hostel accommodation.

Shelter chief executive Adam Sampson said "Tenants who have kept their side of the bargain by paying their rent are being thrown out on to the street because their landlords have defaulted on the mortgage."
Leslie Morphy, of Crisis, said "We risk forgetting that tenants of private landlords are extremely vulnerable to the recession,"

recession is bad for your mental health

First discussed here , we now read that the UK government are now going to finance similar therapy services in England to help identify those who might be suffering from depression due to the downturn. Support workers will help those who have lost their jobs and suffer from depression and anxiety .
The BBC's Mark Sanders said the announcement was, in effect, an acknowledgement by the government that mental health problems could be caused by the recession.

inescapable burden of debt

Up to five million homeowners could be in negative equity by the end of this year if house prices continue to fall, research has claimed Andy Thwaites, director of insight at GfK Financial, said: "The shift to negative equity has the potential to be a mammoth welfare disaster for the nation, particularly when so much of the population has recently relied on the capital appreciation in their home to supplement their lifestyle, consolidate debts and fund retirement.The reality is that if there are further job cuts, the problem will become significantly worse." The average person approaching Citizens Advice for money advice owed £16,971, the organisation said. It would take around of 93 years for people contacting a debt charity for help to repay their borrowings at an affordable rate. "Low income, combined with irresponsible lending, unreasonable debt collection practices and badly informed financial decisions are at the root of many of our clients' debt problems."