I WARNED in my column last week it was likely Rishi Sunak’s Westminster budget this week would be a disaster for ordinary people, and that is exactly what it proved to be.
As the Office for Budget Responsibility reported as he sat down, the UK is now facing the biggest cost of living crisis since the 1950s. Some are suggesting as a result that across the UK 1.3 million people will be forced into absolute poverty. I think that understates the case, and many millions more, including millions in Scotland, will be forced to radically change their lifestyles if they are to have any chance of making ends meet. Whether many can do that given the scale of the crisis that is developing is, frankly, something I doubt.
The political calculation made by Rishi Sunak when delivering this budget was obvious. He clearly believes that those facing poverty do not matter. What is more, he does not believe that they will complain. At the same time, he is building a surplus within the government’s finances so that he can give out tax cuts in years to come, which he believes will buy another Conservative election victory.
I find it very hard, I admit, very hard to have anything but contempt for a man who makes it his priority to secure his own job at the cost of imposing misery upon millions of people, but that is very clearly what Rishi Sunak is doing. Pleasingly, right across the UK press there has been condemnation of this approach. He seems to have even lost the support of the Daily Telegraph, which is quite extraordinary.
READ MORE: Cost of living crisis: The National wants to hear from people in Scotland struggling
However, what almost all these newspapers have failed to note, and which the Office for Budget Responsibility does not report in its official commentary upon the budget, is the fact that once you push millions of people into poverty an economy does not spring back into life the moment international oil and gas prices fall, which is what Sunak seems to believe.
What happens instead is that people who can no longer afford to spend on anything but the most basic things in life, do not go out, do not go shopping, do not go on holiday and do not as a result spend the money that provides the income of many other people right across the country. The leisure, tourism and retail sectors in Scotland are going to suffer terribly as a result of this, and that fact is not reflected in the Treasury‘s forecasts.
I suspect that there will be rapidly rising unemployment soon, contrary to the Treasury‘s expectations, and that will be followed by a recession if Sunak does not change his position very quickly. Any chance of a rebound will in that case be remote in the extreme for a long time to come.
Sunak has chosen his indifference for political purposes, but that indifference also reflects his economic beliefs. As a neoliberal he believes that markets and people always make better economic decisions than governments. He did, in fact, say this in his budget speech. However, that claim presumes that everyone has the resources they need to make a good decision, and what we know is that markets ensure that only a relatively small part of society is in this fortunate position. His claim is, in other words, wrong.
There is, unfortunately, a Scottish dimension to this error of judgement. The fact is that the economic policies of the SNP, as reflected in particular in the work of its Growth Commission, are all based upon the same assumption that Sunak uses, which is that markets know best.
READ MORE: Cost of living crisis: What Scotland can do to avoid rising energy, food and house prices
So, for example, the Growth Commission said that Scotland does not need its own currency because people in the financial market said so, and not because they were correct when making that claim. In addition, too much procurement for public contracts in Scotland is based solely on price, and not on conditions relating to serving the community which a proper economic policy for Scotland would require. In other words, it cannot be assumed that an independent Scotland would avoid the mistakes that Sunak is making if it was under the leadership that the SNP is providing at present.
I cannot be sure what will happen as a result of Sunak‘s indifference to poverty for millions. My fear is that civil unrest might happen, and I am not alone in thinking this. The consumer champion, Martin Lewis, has expressed the same concern. He and I both recognise that parents who cannot feed their children are angry people, and rightly so.
My hope is that nothing of this sort will happen, and that Sunak might go back to the House of Commons and change his policy before too much harm is done. But I also hope that the SNP will realise that they too need to change their focus and need to put the interests of the people of Scotland first if they are to be truly trusted with the future of the country. They are not there yet. But they need to act, and soon, to put things right if Scotland is to avoid the neoliberal fate that Sunak is imposing on the UK as a whole.
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