On Tuesday 7 March 2017, Alex Rowley, Depute Leader of Scottish Labour, put our Drop the Debt research up for debate at Holyrood. The response from the Scottish Government was, in a nutshell, that they consider the issues and points we raise to be both strong and valid. However, they do not believe that the Tories at Westminster will be forthcoming, therefore they are not even going to raise the issue with the UK Government.
What this means…
We need to campaign harder, we need to pile on the pressure. Reps will be running stalls in Glasgow and in Edinburgh over the coming weeks.
Unite CEC Branch Convener, Craig Cummings, who watched the debate at Holyrood, said
This is a strong campaign that we developed locally in Edinburgh and which has now gone nationwide. The fact is that Edinburgh Council is paying out £32 million per year in interest-only on pre-devolution debt liabilities held with the UK Treasury. We are fighting on many fronts to protect jobs and services and make advances where we can. However, real terms cuts to council budgets and rip off loan repayment rates are undermining council services.
We need the Scottish Government to get behind our calls for an amnesty on interest rate repayments to the UK Treasury. At a rate of over 8%, we have sent back £500 million in interest-only to the UK Treasury on liabilities of around £350 million since devolution in 1998 and we still need to settle the principle sums. Our message is clear and simple:
We have paid what we owe. Now we must prioritise local jobs and services.
Scottish Labour has thrown its full support behind a campaign calling on the UK Government to grant a “debt amnesty” to Scottish local authorities
Ahead of attending STUC Congress in Dundee, Labour’s Shadow Scottish Secretary, Ian Murray, has written to George Osborne, asking him to consider reducing the rates of interest currently being paid by local authorities on their pre-devolution debt liabilities. In 2015-16, this debt resulted in payments to the Treasury from Scottish Local authorities of £195 million.
In his letter to the Chancellor, Ian Murray said
I would urge you to give serious consideration to the request from Scottish local authorities and the Unite union to grant an amnesty on outstanding pre-devolution debt liability. This request has my full support, and that of the Scottish Labour leader, Kezia Dugdale.
Unite estimates that, since 1999, Scottish local authorities have paid back over £3 billion in interest on pre-devolution debt. Given the current financial parameters within which Scotland’s local authorities are being forced to operate, payments on this scale are both unfair and unsustainable.
The new powers transferred to Scotland by the Scotland Act will greatly enhance the Scottish Parliament’s control over our public finances. However, if this is truly to represent a clean break from the past and a fresh start for Scotland, relief should be granted on pre-devolution debt liabilities that continue to impose an unwarranted burden of debt on Scottish local authorities.
The Labour Party and Scottish local authorities are prepared to take responsibility for fixing local authority finances – but this can only be done on a level playing field, not one skewed by a historic burden of debt. Agreeing to an amnesty would be morally just, fiscally responsible, and in the best interests of the people of Scotland.
Local government workers across Edinburgh will demonstrate at the city chambers tomorrow morning (Thursday 29 October) against proposals for 2,000 compulsory redundancies by May 2016.
The cuts are being pushed through as the City of Edinburgh Council (CEC) seeks to make savings of £141 million over the next four years while grappling with a total debt estimated by Unite to be as much as £1.6 billion.
Unite has tabled a number of alternative financing proposals to alleviate budget constraints including a collaborative effort to pursue a debt amnesty on all pre-Scotland Act loans from the Public Works Loan Board (PWLB), which could free-up £32 million a year in the council budget.
Unite Deputy Scottish Secretary Mary Alexander said
Mass compulsory redundancies are not in the interests of anyone – not the workers, not the public and not the council itself.
We know CEC has significant debts but we are not looking at recriminations, we are looking for solutions to the problem.
We need to explore how we can loosen the budget constraints but this requires a political will from the city’s elected representatives and council officials to work collaboratively with the joint trade unions.
Through our alternative financing proposals we believe there is a better way and our message is clear: Let’s work together to secure jobs and services under public control in Edinburgh for the next generation.