Spending review must focus on a bigger economy not a smaller state, says TUC

22 November 2015

The TUC has today (Sunday) published a statement in advance of the Comprehensive Spending Review 2015, which will be announced by the Chancellor of the Exchequer on Wednesday 25 November.

The TUC statement, Building a secure high productivity economy, sets out practical ways in which the government could modernise the economy to boost productivity. This would not only improve living standards, but also ensure that high quality public services for British people continue to be affordable.

Priority areas for action in the TUC statement:

  • Industrial strategy – The crisis that has hit UK steel is a reminder of the urgent need for a comprehensive national industrial strategy, which must include a substantial boost to government infrastructure funding along with greater social partner involvement. On skills, the government’s welcome apprentice levy must be backed up by extra investment in adult skills and further education.
  • Employment rights – EU renegotiations must not weaken employment rights, which are vital to boosting UK productivity and living standards. Employment rights such as redundancy payments and sick pay must be protected in the public sector.
  • Voice at work – The government should seek to boost productivity by engaging positively with trade unions instead of seeking to undermine them through the Trade Union Bill.
  • High quality public services – A high productivity economy cannot be achieved without decent public services. Investing in services like transport, health, and education (and providing public sector workers with decent terms and conditions) will ensure that workers and their families have the support they need to make their fullest possible contribution to the UK’s economic prosperity.
  • Opportunities for young people – With young people still not fully sharing in the recovery we need a Job Guarantee scheme to tackle long-term youth unemployment. The government should also make a commitment that younger workers will not be excluded from the new higher minimum wage.

TUC General Secretary Frances O’Grady said: “The spending review needs to focus on a bigger economy, not a smaller state. It’s a chance to set out a clear vision, backed by a proper investment plan, to make the UK a global leader with the best infrastructure and the best jobs.

“It’s depressing to see how far behind other countries we are for high-skilled jobs, genuinely affordable homes for all, fast and cheap trains and universal childcare. If they can do better, so can we. But we have to invest like they do.”

On the Chancellor’s intention to amend proposals for tax credit cuts, the TUC warns that the only acceptable option is to scrap the cuts altogether. ‘Transitional protection’ would only help people who get tax credits now, and would do nothing for those entering low-paid jobs after April. Shifting the cuts to housing benefit instead would not spare working families as the number of working households that get housing benefit has doubled to over a million since 2009.

TUC General Secretary Frances O’Grady said: “The government’s plans to cut tax credits show just how wrong their thinking is. Shifting the cuts to housing benefit would not protect families on low wages because a million working households rely on this support to pay soaring rents. We need to reward work, and that means guaranteeing working families decent incomes through better jobs and vital in-work benefits.”

NOTES TO EDITORS:

– The full TUC statement in advance of the Comprehensive Spending Review, Building a secure high productivity economy, can be found below.

– In August 2009 there were 516,056 housing benefit claimants in employment, which was 16.0% of all working age recipients. Buy August 2015 – the most recent data available – this had risen to 1,095,653, which is 31.1% of all working age recipients.

Working age housing benefit recipients from 2009 to 2015 by employment status

Working age HB claimants

Number in employment

Percentage in employment

Aug 2009

3,218,751

516,056

16.0%

Aug 2010

3,498,762

691,561

19.8%

Aug 2011

3,630,159

828,607

22.8%

Aug 2012

3,759,347

929,341

24.7%

Aug 2013

3,754,788

1,013,822

27.0%

Aug 2014

3,649,815

1,078,413

29.5%

Aug 2015

3,520,431

1,095,653

31.1%

Source: DWP

– All TUC press releases can be found at www.tuc.org.uk

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