Bad budget news will hit workers for £800 a year by 2021, says TUC
- Budget leaves UK capital investment trailing our competitors
- Wages and productivity likely to remain weak while under-investment continues, says TUC
TUC analysis of official figures published for today’s (Wednesday) budget shows that wages are now set to be worth £800 less per year in 2021 than had been expected at the budget in March.
The TUC warns that investment measures in today’s budget are far below what is needed to boost growth, get wages rising, and get Britain fit for Brexit.
Capital investment is set to peak at 2.9% GDP, and average 2.8% GDP, across the current parliament to 2022. This will leave if far short of the OECD average of 3.5% GDP.
On wages, TUC General Secretary Frances O’Grady said:
“The news for workers gets worse and worse. Their wages are set to be worth hundreds of pounds less than the government thought in the coming years. This budget won’t give Britain the pay rise it so badly needs.”
On investment, she added:
“The Chancellor’s job today was to get Britain’s economy fit for Brexit. But what he announced falls far short of the investment boost the economy needs. And it leaves us trailing our competitors.
“The government must urgently up its game, or life outside of the EU will be a rough ride for working people. Investment must be targeted at the big sectors of the future, like low-carbon industry. And it must be directed towards communities that are most in need of more and better jobs.”
On changes to Universal Credit, she added:
“Making people wait less for Universal Credit is a small step forward, but big changes are needed or working people will be left thousands of pounds a year worse off. If the Chancellor can afford tax cuts for big business, he can afford to help working families.”
- Public sector pay: A TUC statement on the budget and public sector pay can be found here: www.tuc.org.uk/news/budget-leaves-public-sector-workers-out-cold-says-tuc
- Average wages: At the March 2017 Budget, real average weekly earnings were expected to grow to £526 per week in 2021. But the Chancellor’s advisers, the Office for Budget Responsibility, have downgraded this forecast following the weak performance of the economy. The new expectation is that wages will be worth £502 per week in 2021. Because £8 of this change is due to data revisions by the Office for National Statistics, the forecast change is £16, and so the annual impact is -£832.
- Capital investment: Capital investment as a share of GDP is derived using national accounts rather than public sector finance figures to enable international comparisons, and so uses figures from OBR supplementary economy tables, table 1.2.
- TUC budget submission: The TUC budget submission called for the government to get Britain fit for a prosperous future by:
- Investing in our public services and public servants
The Treasury must fund real public sector pay increases, and give public services a new financial settlement with real-term increases.
- Ending the living standards squeeze and give Britain a pay rise
The minimum wage should increase to £10 per hour as quickly as possible, including for workers aged 21 to 24. Cuts to Universal Credit should be reversed. And unions should have stronger rights to enter workplaces, so they can help more workers benefit from collective wage bargaining.
- Upgrading the UK’s economic model to deliver better growth
Public infrastructure investment must rise from 2.7% GDP to the OECD average of 3.5% GDP. Funds must go to housing, transport, science and R&D. And the industrial strategy white paper (expected early next week) must put the workforce at its heart and provide a framework for government, business and unions to work together.
- Setting out a plan to get workplaces fit for the future
The budget should set aside new funding for improved enforcement of workers’ rights, and refunding of tribunal fees. Working parents need paid paternity leave, and expanded paternity pay. And investment in training for workers should be increased to the EU average within the next five years.
- The full TUC budget submission can be found here: www.tuc.org.uk/sites/default/files/investinginthefuture.pdf
- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.6 million working people who make up our 50 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.
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