Don’t Cut Public Services

Unison leader prentis (right) pledged to establish a public sector alliance to fight all cuts
Unison leader prentis (right) pledged to establish a public sector alliance to fight all cuts

Public-sector union Unison yesterday cautioned against panic cuts in public services in the wake of record government borrowing.

UK public sector net borrowing, which takes account of capital investment, in May 2009 was £19.9 billion, said the Office for National Statistics (ONS).

This compares with borrowing of £12.2 billion in May 2008. The Budget forecast for 2009/10 is net borrowing of £175 billion, the ONS added.

A Unison spokeswoman told News Line: ‘In times of recession, the government need to hold firm and invest in public services.

‘Now, more than ever, people are turning to our hard-working members in the public sector for help and advice.’

ONS figures showed public sector net debt, expressed as a percentage of gross domestic product (GDP), was 54.7 per cent at the end of May 2009, compared with 43.6 per cent at end of May 2008.

Net debt was £774.8 billion at the end of May, compared with £629 billion a year earlier.

The most recent figures for public sector net debt excluding financial sector intervention are for March 2009, when net debt was £609 billion (42.9 per cent of GDP).

Excluding cash put into propping up the banks, the public sector current budget deficit was also at a record £17.5bn, compared to £10.6bn in the same month in 2008.

Meanwhile, the latest figures from the Council of Mortgage Lenders (CML) showed mortgage lending fell back in May.

Gross lending totalled £10.3bn – two per cent lower than in April and 58 per cent lower than in May 2008.

The CML said that while lending for home buyers had been rising recently, lending to people changing their mortgage provider had dropped off.

Commenting on the CML figures, TUC General Secretary Brendan Barber said: ‘The Government was right to bail out the banks but now ministers must take action to get them lending again.

‘The squeeze on mortgage approvals has seen many new buyers having to find deposits of up to 25 per cent before they can borrow any money.

‘This is a major factor behind recent job losses in the finance and construction sectors.

‘Mortgage lending policy has swung from being far too generous to far too stingy.

‘The government must use its influence with the banks to get this vital part of the economy back onto an even keel.’