What the budget means for the city
IT is a black day for Peterborough’s public sector.
That is the stern message from union representatives for public sector organisations across Peterborough who fear the Government’s emergency budget will have a direct impact on jobs and frontline services in the city.
In a 55 minute speech yesterday afternoon, Chancellor George Osborne announced a series of cuts, freezes and increases to help tackle the Goverment’s financial deficit. They include:
Asking public sector workers to accept a two-year pay freeze, with protection for the 1.7 million public servants earning less than £21,000.
Those low-paid workers will receive a flat pay-rise, worth £250, in both years.
On January 4 next year, the main rate of VAT will rise from 17.5 per cent to 20 per cent.
The VAT rise will generate more than £13 billion a year by the end of this Parliament.
Zero-rated items will remain exempt from VAT over the course of this Parliament.
The small companies’ tax rate will be cut to 20 per cent.
The Government will help low-spending councils in England to freeze council tax for one year, from next April.
Spokesperson for Unison in Peterborough, Brian Lynch, said the budget was “absolutely disgraceful” and said it was “shameful” that the Government were attacking some of the hardest working people in the country.
He said: “It is also extremely cowardly and the Government should be targeting those who put us in this mess in the first place.
“It is a black day for Peterborough. Research shows that of every £1 earned, 68 per cent is spent in the local community but people are not going to be earn- ing as much, so they won’t be spending as much.
“The Government can’t target public sector workers with loss of jobs and no pay rises and expect there not to be a direct visible impact on the city.”
However, MP for Peterborough, Stewart Jackson believes the decision to freeze public sector pay was “right and fair”.
He said: “Public sector workers have had significant pay rises over the last few years and a responsible government has to look at pay and pensions freezes as an option.
“Lower paid people will be protected and not disadvantaged.
“Private sector workers have taken pay cuts and freezes and even seen their pensions cut completely and therefore public sector workers cannot expect to be exempt from this either.
“It’s only fair they make a contribution.
“Everyone has to contribute – we are all in this together, but we will protect the most vulnerable, including low income families and pensioners.”
He added that the budget was tough but fair and was for the long term.
He said: “This budget will provide stability for the economy. It is about growth, with businesses taking on more staff, continuing capital projects and linking pensions.
“The budget will bring a very positive and important message to entrepreneurs and businesses that their job is to take on more staff and we will do everything we can to support them and enable them to grow.”
Spokesman for the GMB union David Shamma said: “Members in the local authority and all public services will be very disappointed to learn they are get- ting a two year pay freeze.
“We have concerns about how these 25 per cent cuts within the local authorities are going to be made and fear that it will result in job losses.
“This budget is going to hit the poorest hard and the poorest members of society are having to pay for the brunt of what is the bankers’ mess.”
Leader of Peterborough City Council Marco Cereste said he also has concerns about where the 25 per cent cuts will be made within the council.
He said: “At present, I don’t know what that will mean for the people of Peterborough.”
It could take several weeks for the council to decide exactly what cuts it will make.
Spokesman for the Unite union Mick Doherty said the Government is “attacking disadvantaged groups” in society.
He said: “If I was a Liberal Democrat, I would hang my head in shame. In the next year to 18 months we are going to lose hundreds of public sector jobs. We will not know the full implication for Peterborough for some time.
“What we do know is that public services will be cut and jobs will go, making it a very sad day for Peterborough.”
Liberal Democrat, city councillor Nick Sandford, said: “The Government is trying to ensure that everybody has to make a contribution and those people who earn more, will have to make a higher contribution.
“My worry that the Chancellor’s decision to provide businesses with up to £50,000 to take on new employees will result in businesses setting up in areas like Corby and Kettering, because Peterborough is excluded from the scheme.”
MIXED REACTION: Paul Smith.
CUTS: Chancellor George Osborne with the RIGHT AND Stewart Jackson.