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date: 6 April 2009

embargo: 00.01hrs Tuesday 7 April 2009

TUC calls for £25 billion public investment to kick start jobs and growth

The Chancellor's budget should include a bold new fiscal stimulus that is focused on jobs and green growth, says the TUC as it publishes its budget submission today (Tuesday).

The TUC budget submission calls for a £25 billion public investment programme, which would create and safeguard one million jobs. This would double the UK's fiscal stimulus package to 3.25 per cent, bringing it into line with the average stimulus for advanced economies recently examined by the International Monetary Fund (IMF). The cost of inaction would be mass unemployment and an even greater strain on public finances for decades to come, says the TUC.

The TUC is calling for a public works programme to be at the heart of the Government's economic recovery plan and proposes a £16.8 billion package of measures targeted primarily at green industries - in particular green manufacturing, renewable energy, home insulation and house building, and modernising our communications and rail infrastructure. The TUC has identified these as areas that are well placed to benefit from public investment.

The TUC's public works programme includes the following proposals;

• a £6 billion social housing programme to build 100,000 new homes and create 30,000 jobs over the next two years;
• £5 billion towards providing basic insulation to the ten million UK homes that do not currently have any, which would create 20,000 jobs;
• a £3 billion support package for renewable projects that have financial difficulties; and,
• £1 billion funding for carbon capture projects.

The TUC says that the Government should do more to counter unemployment, which is now increasing twice as fast in the UK as the European average.

The budget submission calls for a £2 billion intermediate labour market programme that would directly provide jobs and training in areas of high unemployment and targeted at those who are finding it particularly hard to find work, such as the long term unemployed and young people.

The TUC submission calls for a £1.2 billion short-time working subsidy scheme to help viable firms who are struggling with the recession. Short-time working schemes, which are already performing well across Europe, prevent unnecessary redundancies and make it easier for companies to grow once the economy recovers.

The budget is a crucial opportunity to boost consumer confidence and the best way to do this is to put money in people's pockets, says the TUC. A £3.5 billion injection into the tax credits system would provide vital financial help for families and would help the Government to reach its target of halving child poverty by 2010.

Increasing Jobseekers Allowance (JSA) by at least £15 a week from its current value of £60.50 a week would be an effective stimulus as the money will go to people who have little choice but to spend rather than save any extra money, says the TUC.

TUC General Secretary Brendan Barber said: 'The Government had little choice about bailing out the banks and underwriting loans. But while this has stopped financial meltdown it is not enough to get the economy rolling again. Now there must be the same relentless focus on the rest of the economy in a budget for jobs.

'On international comparisons the UK fiscal stimulus package has not been that generous. There is still scope for a carefully targeted second round that can promote a quicker recovery, help companies take full advantage when our economy is back on track and ensure that we are doing enough to counter climate change.

'Ministers did well at the G20 summit, and the decisions there should ensure the global slowdown is shorter and shallower. But this now needs following up with the right domestic policies to minimise the grim impact the recession is already having and ensure that the UK is ready to make the most of even a shallow global recovery.'

NOTES TO EDITORS:

- The TUC 2009 budget submission is available to download at www.tuc.org.uk/extras/2009budgetsubmission.pdf

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

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (800 words) issued 7 Apr 2009