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date: 9 October 2007

embargo: For immediate release

TUC PBR reaction

Reacting to today's statement from the Chancellor, TUC General Secretary, Brendan Barber, said:

'There is much to welcome in today's statement, especially new investment in education, health, transport, science and the environment. The economy continues to do well, and the public finances are in good shape.

'But some parts of the public sector have received a very tight settlement. The Government must understand that it cannot expect public servants to fund this through further cuts in their real pay after this year's staged awards.

'We also warmly welcome the Chancellor's recognition of the tax loopholes enjoyed by the super-rich through both private equity and non-dom status - an issue that unions have put firmly on the agenda.

'But the Chancellor has only started the process of closing the loopholes today. It would have been far better to introduce a proper residence test than make the non-dom regime even more complex. We estimate this would quickly start to raise an extra £4 billion a year.

'This would have provided more funds to tackle child poverty. Of course we welcome the rise in tax credits and other measures that will lift 100,000 children out of poverty, but more progress is needed if the Government is to meet its own target.

'While it is right to review inheritance tax thresholds each year, we are not convinced the Chancellor has been right to be so generous today. Only one in twenty estates pay inheritance tax - and many do not realise that tax is only paid on the extra over the threshold, so people with property just over the limit only pay a very small amount. This will do nothing to make Britain more equal, and the money it will cost would have been better spent on better public services and attacking poverty.'

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk

Press release (400 words) issued 9 Oct 2007