TUC calls for job creation and decent wages to boost economy as government misses deficit reduction target
Rising unemployment figures and increased social security spending have dug a £2.8bn “hole” in the government’s deficit reduction target, the Trade Union Congress (TUC) said today.
The TUC said that Chancellor George Osborne’s plan A was obsolete and recommended that the Government should start working on a plan B, based on job creation and decent wages.
A TUC study of official figures revealed that “faltering” economic growth and the rising jobless total left tax revenues running a third below the Office for Budget Responsibility forecast made in March.
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A double whammy of £1.8bn lost tax revenues and £1bn in higher social security spending accounted for more than half the Government’s overspend so far this financial year, said the TUC.
General secretary of the TUC Brendan Barber warned that the coalition’s programme of spending cuts was compounding the UK’s economic problems.
Speaking about Osborne’s plan A, he said, “The Government labels anyone that disagrees with its economic strategy a deficit-denier. But as the dole queues grow and our economy stagnates, the chancellor’s plan A is fast becoming a deficit failure.
“Deep, rapid spending cuts have sent unemployment spiralling to a 17-year high, are depressing living standards and adding billions to public borrowing. Even defenders of plan A admit it’s going to get worse before it gets better.
“We need a new approach that prioritises jobs and decent wages, funded by making those that benefited most from the boom pay their fair share of tax.
“Getting people back into work is the only way to get consumers spending again, businesses growing and the deficit down.”
Official forecasts for wage, employment and output growth all look increasingly optimistic, according to the TUC’s analysis.
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