15 March 2015

The TUC’s Budget statement published today (Sunday) warns that George Osborne’s proposals for a new round of austerity after the election, even more extreme than the last, will set growth back years.

A change of course is urgently needed, based on a robust plan for investment to boost long-term growth, and a secure recovery in which everyone has a fair share, says the TUC

To ensure fiscal strategy is focussed on investment in boosting growth, the TUC is calling for:

immediate borrowing powers for the UK’s state investment banks (British Business Bank and Green Investment Bank)

public financing to help provide a million new homes

social security to be protected from further cuts

NHS and local government funding gaps to be addressed

To address long-run productivity challenges, the TUC is calling for:

a comprehensive industrial policy that seeks to boost skills and innovation

corporate governance reforms that restrict voting rights to long-term shareholders and ensure company director duties are focussed on long-term interests

an immediate reversal of the damaging decision to cut the adult skills further education budget by 24% this year

To secure a fair recovery, which ensures that everyone has a fair share in economic recovery, not just those at the top, the TUC is calling for:

worker representation on pay committees

fairer taxation with action on tax dodging so the wealthiest pay their share

a job guarantee scheme to prevent a lost generation of young people

the public sector pay cap to be lifted

A new TUC report The Price of Austerity, is also published today as a supporting paper to the TUC Budget statement. It gauges the contribution of austerity to the slowdown in UK growth from 2010 to 2014 and demonstrates an international pattern linking austerity and reduced GDP growth since 2009.

As well as laying bare the economic failure of austerity in the current parliament, the report calculates the impact on economic demand implied by the Chancellor’s proposals for a further, even more extreme, programme of austerity after the election. The TUC argues that, in the context of an increasingly fragile global outlook and a growing reliance of the economy on household debt, a return to recession would be a real possibility if further major spending cuts go ahead.

TUC General Secretary, Frances O’Grady said: “George Osborne has given us failure on growth, failure on wages, and failure on the deficit. His record is so bad he’s created a new culture of low expectations, with weak growth and weak wage rises celebrated by desperate government ministers.

“The danger is that the Budget will be more about winning votes in six weeks than securing growth for six years. If the Chancellor is re-elected, the deep cuts he plans will shrink the state to back to the 1930s for its share of the economy. He may have eased the cuts in the run-up to the election, but Osborne’s plan for full-speed-ahead austerity after the election would wreck vital services, hit the vulnerable, and slow the economy before most people have had any share in the recovery.

“We need a new plan for investment in long-term growth that has infrastructure, skills and decent jobs at the heart of it. Future growth also depends on a better balanced economy, with workers getting a fairer share in their pay packets, corporations paying their fair share of taxes, and short-term shareholder interests kept in check.”

NOTES TO EDITORS:

- The full TUC Budget statement 2015 can be found at https://www.tuc.org.uk/sites/default/files/BudgetStatement2015.pdf

- The full TUC report The Price of Austerity can be found at https://www.tuc.org.uk/sites/default/files/ThePriceofAusterity.pdf

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

- Follow the TUC on Twitter: @tucnews