STUC on Economic Crisis

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In responding to the content of the Pre-Budget Report, the Scottish Trades Union Congress (STUC) welcomed the Chancellor’s announcement of reductions in VAT to boost demand in the economy and the commitment to raise the higher rate of tax for those earning in excess of £150,000 a year.

STUC General Secretary Grahame Smith said:

“Today’s measures will go some way to providing the short-term stimulus our economy needs. The new direction of travel signified by the proposed rise in higher rate tax is welcome but it should be brought in immediately. The protection of low paid workers from the future national insurance contribution rises is also welcomed. Far more will need to be done in the medium term to ensure that accumulated public sector debt is paid for by those who can most afford to do so. A national and international response is required for the problem of tax avoidance which costs the UK economy £14 billion every year.”

“The plans for investment in home insulation and other low carbon measures are very welcome but should have been part of a wider package of measures similar to the “New Green Deal” proposed by Barack Obama.”

However, STUC voiced concern over plans for an additional £5 billion in public sector efficiency savings.

Grahame Smith said

“It is difficult to see how these savings will be achieved without cuts in jobs and services. Unemployment is unemployment whether caused by private sector contraction or public sector contraction and, as was the case with the last two UK recessions, any cuts in services will only serve to accentuate the longer term damage to our economy.”

Smith also criticised the Conservative Party response to the Pre-Budget statement

“The ‘suffer now - suffer later’ response of the Tories to today’s announcement is a counsel of despair. Scotland is still suffering the effects of the Tory response to the last recession through our low levels of growth and pockets of extreme deprivation. There is nothing in what the Tories said today which suggest it would any different this time.”

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21st November : Trade union plan to support workers through, and beyond, the recession

At a meeting of the Scottish Trades Union Congress (STUC), TUC, Welsh TUC and Irish Congress of Trade Unions (ICTU) in Cardiff today (Friday) union leaders agreed on key action points that the Governments of the UK and Ireland, and the devolved administrations from Scotland, Wales and Northern Ireland, need to implement in order to minimise the damage caused to working people and their families by the recession. The trade union statement also covered necessary actions to help workers take advantage of economic growth after the recession has ended.

'The world economy finds itself at a turning point: the failure of the free market / deregulation agenda has been exposed and a new era of strong economies, supported by active government, and built on fairness and proper scrutiny of financial institutions, is possible.'

Following the meeting STUC General Secretary Grahame Smith said

“Our message to the UK and devolved administrations is clear. To safeguard jobs through boosting demand, provide effective assistance to the unemployed and rebalance the economy in order that it emerges from the recession fit to face the challenges of the future.”

The ten key action points agreed by the trade union leaders are:

*Stating that minimising the impact of recession is the absolute economic priority with interest rate decisions in line with that priority;

*Embarking on a major fiscal stimulus to increase demand in the high street. This could include tax cuts for low and middle income earners and the bringing forward of major infrastructure projects to boost demand in industries such as construction and transport;

*Getting lending moving again in order to support companies facing short term funding or cash flow crises;

*Supporting people made redundant, by increasing the levels of statutory redundancy pay and increasing unemployment benefit. This will both prevent short-term poverty and give some support to demand in the high street;

*Supporting those at risk of losing their homes, exploring every possible avenue to avoid repossessions taking place;

*Supporting fair pay for all workers, including those in the public sector, rather than pursuing wage restraint policies and job cuts;

*Working with local and regional authorities, within nations, to identify business sectors of strategic interest, such as green jobs, and ways in which they might be supported;

*Embarking on a major campaign of upskilling, so that workers made redundant have the maximum chance of finding further work, and all workers are equipped to participate in the high value economy that must emerge after the present crisis is over;

*Engaging with other world leaders, not least next year, when the UK chairs the G20 group of industrial nations, to seek trade rules and minimum standards to promote economic growth and minimise poverty throughout the world

*Acting to protect the most vulnerable in society by investing in public services.

The TUC, STUC, WTUC and ICTU call on all the relevant Government authorities to work closely with unions and employers to take this agenda forward.

In a discussion with the First Minister of Wales, Rhodri Morgan, union leaders welcomed the steps being taken forward in Wales by the Welsh Assembly Government in partnership with the Wales TUC and CBI Wales.

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21st November : Target tax cuts effectively, argues the STUC

The Scottish Trades Union Congress (STUC) is calling on the Chancellor to focus the Pre-Budget Report (Monday) on providing assistance to the low paid and unemployed in order to stimulate the shrinking economy.

Grahame Smith, STUC General Secretary said:

“Recent comments from both the Prime Minister and Chancellor suggest that Monday’s PBR will contain a package of measures to boost the economy. This is very welcome because monetary policy and automatic fiscal stabilisers alone are an insufficient response given the scale of current challenges.

“The Chancellor must now be as bold in addressing recession and rising unemployment as he was in dealing with the banking crisis. The PBR should aim to safeguard jobs through boosting demand, provide effective assistance to the unemployed and rebalance the economy in order that it emerges from the recession fit to face the challenges of the future.

“Tax cuts and spending increases introduced in Monday’s PBR must be effectively targeted so that each pound generates the largest possible increase in short-run GDP whilst providing the greatest benefit to those hit hardest by the recession. Targeting in this way will provide the maximum expansionary impact over the shortest possible timescale for the simple reason that low paid workers and the unemployed can be relied upon to spend the proceeds.

“Across the board tax cuts may be politically attractive but research reveals that such measures provide very poor value for money. Cuts in corporation tax also provide very poor value and take far too long to have an expansionary impact if indeed they have any at all.

The STUC is calling for:

*Tax cuts to be targeted at those on low incomes. This should form part of a wider review of the UK tax system that addresses its complexity and manifest unfairness with the ultimate aim of restoring genuine progressivity. A priority must be to tackle the prodigious success of corporations and super-rich individuals in avoiding and evading taxation;

*An increase in unemployment benefits, statutory redundancy pay (in line with the 2005 manifesto commitment) and the amount of redundancy pay that can be taken tax free;

*A reversal of the staff cuts planned for Jobcentre Plus. The unemployed and workers under threat of redundancy are entitled to expect effective early support;

*A low carbon industrial strategy – this does not necessarily have to involve new spending given that much of the barriers to the creation of new, green jobs can be overcome through better co-ordination of policy within government; Expansion of R&D tax credits given the impressive spillovers into the wider economy from R&D investment;

*The speedy introduction of the right to request time off for training to support business productivity and staff development.

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18th November : STUC on inflation figures

Commenting on today’s statistics which show Consumer Prices Index (CPI) dropping from 5.2% to 4.5%, the biggest month on month fall for 16 years, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“These figures confirm that inflation is set to fall rapidly over the coming months and provide another warning that deflation could quickly become the real danger. “With unemployment rising and survey evidence profoundly worrying, today’s statistics suggest that the Bank of England has scope to cut rates again in December. Lower rates together with the anticipated fiscal stimulus do not constitute an economic panacea, but such measures will help cushion the fall into recession.”

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17th November : STUC Women's Conference to Debate Job Losses and the Scottish Economy

Concerns over job losses across all sectors of the Scottish economy are highlighted today (Monday 17th November) at the Scottish Trades Union Congress (STUC) Women's Conference in Perth.

With women making up 60% of the finance sector workforce, predominantly in the lower paid jobs, speakers will be calling for Scottish and Westminster government action to ensure employment security for employees in the finance sector.
Recent announcements on BT and other call-centre job losses will also impact heavily on women's employment. Priority must also be given to tackling inequality rather than allowing the recession to promote divisions in the workforce.

Speaking prior to the conference Cheryl Gedling, PCS, Chair of the STUC Women's Committee said "Women workers earn 85p per hour for every £1 a man earns and face job insecurity. The STUC believes that priority must be given to addressing equal pay, and tackling low pay in the public sector, along with investing in public services. We welcome the joint communiqué recently agreed between the First Minister and the STUC, committing to tackling the pay gap and continuing inequality, particularly in changing economic circumstances."

Agnes Tolmie, UNITE, and a member of the STUC General Council, speaking to an emergency motion from UNITE at conference will say “Government must take decisive action to protect and value the workforce in the financial sector. It is time to end a system that rewards risk-taking and short termism. Employers too have to take responsibility - we are calling for an end to the practice of offshoring jobs, avoiding taxes, and removing work from the Scottish economy"
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12th November : STUC on tax cuts

Commenting after the Conservative Party had announced plans to cut tax on business, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“Given the rapid onset of recession, it is entirely legitimate for political parties to be examining the potential role of fiscal policy in stimulating economic activity. Although last week’s massive cut in interest rates is a necessary condition for economic recovery, it is unlikely to prove sufficient.

“The STUC will continue to argue that UK’s taxation framework requires a radical overhaul: it is simply unacceptable that low paid workers pay a higher percentage of their income in taxation than the super-rich. The prodigious success of UK corporations and super-rich individuals in avoiding and evading taxation must also be addressed as a matter of urgency. HMRC estimates that the current tax gap could run as high as £40bn a year.

“Therefore, it is crucial that any short-term measures designed to mitigate the impact of recession should also help contribute to a fairer and more efficient taxation system. Tax cuts should be focused on the lowest paid who can be relied upon to spend the savings.

“Tax cuts for businesses are not the way forward. There will be little or no stimulatory effect on the economy within the necessary timescales if at all and the deadweight costs are potentially enormous.”

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12th November : STUC on unemployment figures

Commenting on today’s labour market statistics which show a rise in unemployment of 13,000 in Scotland over the quarter to September 2008, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“These worrying statistics only add to the accumulating body of evidence indicating that the downturn is more rapid and severe than anticipated. Urgent action is required at both UK and Scottish level to support workers who have lost, or are in danger of losing, their jobs.

“Next week’s Pre Budget Report should target any tax cuts at low paid workers and also raise the level of unemployment benefits. Not only is this consistent with a fairer society, such targeted measures are the surest way of providing a stimulus to the economy.

“When the STUC meets with the First Minister tomorrow, the Scottish Government’s readiness to meet the challenges of growing unemployment will be high on the agenda. It is essential that Local Authorities, Skills Development Scotland and the enterprise networks are all keenly aware of their roles and responsibilities at this difficult time.

“The STUC will also press the First Minister to ensure that the Scottish Government’s Partnership Action for Continuing Employment (PACE) initiative is fit for purpose”.

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24th October : STUC on UK GDP Figures

Commenting after National Statistics preliminary estimate for the third quarter 2008 showed a decrease of 0.5% on quarter 2, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“Today’s figures suggest that the decline in output is considerably more rapid than anticipated. Economic insecurity, already at high levels, will be rising exponentially amongst Scottish workers.

“With recession now a certainty, action is required to ensure that it doesn’t become deep and prolonged. The crucial first step should be a cut in interest rates of at least a full percentage point at the MPC’s next meeting in November”.

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22 October : STUC on GDP Figures

Commenting on today’s figures confirming that over 2nd quarter 2008 Scottish GDP rose by just 0.1% and UK GDP not at all, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“These figures which, predate the banking crisis, confirm that recession is imminent. “It is crucial that action is taken now to ensure the recession does not become deep and prolonged and also to prepare to deal with its consequences in terms of rising unemployment.

“The first step must be a further cut in interest rates of at least 1% at the Monetary Policy Committee’s next meeting. If the MPC fails to act, the Government must urgently reconsider whether its remit is fit for purpose in these challenging economic times.”

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21st October : STUC on Scottish Unemployment Statistics

Reacting to the latest unemployment figures published today Scottish Trades Union Congress (STUC) Assistant Secretary Stephen Boyd said

“The substantial rise in unemployment in Scotland over the last quarter is a major concern. These figures clearly indicate that Scotland is not immune to any global economic downturn as some commentators have been suggesting. The threat of recession looms and we look forward to at least another point cut in interest rates in November.

“The STUC will be urgently contacting both Scottish and UK governments to ensure that increased funding and resources are in place to provide assistance and support for the increasing numbers who find themselves unemployed. In particular a review of the job cuts and privatisation of services in the Department of Works and Pensions is a priority.”

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