Tuesday, 28 August 2012

CBI Scotland stuck in a time warp

They say there is nothing more certain than death and taxes. Well there is, the annual CBI submission on the Scottish budget. Always predictable, always economic nonsense.

You are lured in with their call for capital spending. Yes, we can all agree with that, even if the very same CBI supported the UK government's spending cuts that have slashed capital spending in Scotland and across the UK. Then when asked how they would pay for it, sadly we get no Plan B, but instead they propose cutting current spending by wage restraint and public service job cuts.

Cabinet Secretary, John Swinney MSP politely explained on GMS this morning that you dont get the economy moving by further reducing demand. Cutting wages and jobs is guaranteed to further reduce consumer confidence. I will be less polite. You do wonder who exactly CBI Scotland is representing here. Their retail and manufacturing business members who desperately need consumer spending, or a narrow group of privatising companies, desperate to rip off the taxpayer.

And it is here that we move onto the CBI's other solution. Privatise everything including Scotland's water. The G4S Olympic scandal simply flows past CBI towers as if it never happened. Even Tory ministers wonder if privatisation is the right approach. According to the CBI there is no economic benefit to Scottish Water being in the public sector. Excuse me, £500m of capital expenditure per year has no effect on the Scottish economy? Do they talk to construction companies who do most of this work? If it was privatised the charge payer would end up paying for the profits and the fat cat wages. But of course I probably missed the call for wage restraint for CBI bosses, who award themselves ever greater bonuses, while everyone else suffers long term real wage cuts.

The CBI solutions defy even basic economics and are stuck in a time warp on privatisation.

No comments:

Post a Comment