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.
ENDS
For further information contact
Stephen Boyd 0141 337 8100