As we near the 2010 general election the three main political parties in the United Kingdom all agree that major cuts in public spending are needed to clear the reported £178 billion deficit. These cuts will hit the poorest people hardest and will see institutions like St John's hospital have to cut already failing services. Whilst at the same time willing to spend, a reported £100 million on the upgrade of the Trident nuclear system, based in Scotland.

 

 

 

Recessions

• In recessions, government borrowing will tend to increase. This is because:
• Higher unemployment means less people will be paying income tax.
• Lower consumption levels mean lower VAT and excise duties.
• Lower company profits mean lower corporation tax.
• Higher unemployment increases cost of social security payments - unemployment benefit, income support, housing benefit etc.
• Falling house and asset prices reduce stamp duties.
• Furthermore, in a recession, governments often try to stimulate the economy using expansionary fiscal policy This could involve:
• Cutting taxes so people (hopefully) spend more
• Increasing public sector spending to stimulate aggregate demand

 

As the government have failed to institgate any kind of stimulus package for the UK -A move that has been condemned by many economists. The Scottish Socialist Party vow to fight all public spending cuts. We vow to stand up for the ordainary working class majority living in Scotland. We vow to change Scotland into a free Socialist republic, that has the majority's needs in mind not the needs to multi-national capitalist companies.