The government appears set on attempting to cut its way to growth. But the evidence of the last decade shows that this is a disastrous strategy.  Government’s first priority in the Spring Budget must be to resolve the ongoing pay disputes in the public sector, delivering real terms pay rises for the workforce and ensuring wages are rising across the economy:

Action to boost pay across economy

The real wage crisis facing the UK lies at the heart of the cost of-living crisis. Government must set out a plan to address it that includes:

• Fully-funded real terms pay rises for public sector workers, that protects them from the soaring cost of living and ensures we retain and recruit the skilled staff our public services urgently need.
• Increase the minimum wage to £15 an hour as soon as possible.
• Strengthen and extend collective bargaining across the economy, including introducing fair pay agreements to set minimum pay and conditions across  sectors.
• Ensure all outsourced workers are paid at least the real Living Wage and receive pay parity with directly-employed staff doing the same job.  
• Strengthen the gender pay gap reporting requirements, and introduce ethnic and disability pay gap reporting, requiring employers to publish actions plans on what they are doing to close the pay gaps they have reported.
• Ban zero hours contracts, tackle fire and rehire, and protect and enhance employment rights that derive from the EU, including strengthening workers’ rights to join and be represented by a union.

Invest in decent public services, funded by fair taxation

Building world class public services are essential for economic growth and prosperity. Government must take action to:

• Deliver fair and sustainable funding for public services. In the context of high inflation, ageing population and increasing demand, we cannot continue to cut back on public spending. We need to invest to grow and deliver the strong and resilient public services our country needs.
• Fix the public sector’s recruitment and retention crisis. A public sector jobs drive would ensure employment levels remain strong during the current economic downturn. TUC previously calculated we need an additional 600,000 staff to get back to strong and resilient public services that families can depend on.
• Deliver a new deal for social care, starting with a new sectoral minimum wage of £15 per hour for the workforce. This should be backed up by a funding settlement that fully offsets the cuts of the past decade and establishes future rises at a level that allows local authorities to meet rising demand for services.
• Introduce universal, flexible, high-quality childcare that is available to all from the point at which paid maternity or parental leave ends. This would ensure every family has access to affordable, flexible, high-quality childcare and that no one is worse off because they work and need to use childcare.

Tax changes must ensure that those with the broadest shoulders pay their fair share in this national effort. This should include:

• Higher windfall tax on excess oil and gas and energy company profits, with less exemptions and loopholes, in order to fund the Energy Price Guarantee and measures to future-proof homes
• Equalising capital gains tax rates with income tax rates, as a first step in ensuring that wealth is taxed fairly. 

Action to better protect workers from hardship

Government must strengthen the energy price guarantee and introduce fairer energy tariffs, accelerate the roll-out of energy efficiency programmes, put in place a permanent short-time working scheme, and as well as temporary support schemes the Government needs to put in place permanent and improvements to the levels of social security.     

• Cancel the energy price hike. The Energy Price Guarantee must not be increased from £2,500 from April 2023 onwards, and should be reduced to £2,000.
• Accelerate the introduction of permanent targeted measures to reach those most in need, including a social tariff for energy use capped at 5% of income for low-income households, and by restructuring tariffs to provide all households with an initial free energy allowance alongside an increase in the cost per unit for high-consumption households. This would incentivise energy savings but not penalise poorer low-consumption households.53
• Redirect underspend from the Energy Price Guarantee to domestic energy efficiency improvements with a retrofitting programme delivered in-house by local and regional public bodies, who have demonstrated the best ability to roll-out energy efficiency programmes through the Local Authority Delivery mechanism. Making our homes warm in the winter will slash the UK’s imports of fossil gas, helping both the national economy and millions of families,54 and defusing future supply crises.
• Take further action to prevent job losses due to high energy costs, both in energy-intensive industries and other sectors. Support for businesses to operate should not be hand-outs, but tied to good governance, workers’ rights and decarbonisation.
• Implement a short-time work scheme, building on the success of furlough to ensure that we can preserve employment during the pandemic –as the TUC set out in a report in 202155 .
• Increase universal credit and legacy benefits to 80 per cent of the real living wage. Scrap the benefit cap, along with the punitive two child limit in universal credit and legacy benefits, immediately.    
• Provide financial support to children through child benefit. Increasing child benefit by £20 per week per child would reduce child poverty by 500,000, lifting a total of 700,000 people overall from poverty, at a cost of £9.9 billion.56   
• Maintain the State Pension triple lock. In the short term, it is essential to ensure that the state pension at least rises in line with inflation to protect pensioner households from price increases. The need is particularly acute as retired households on average spend a greater proportion of outgoings than non-retired households on essentials like heating and fuel, and because the decision to suspend the triple lock for 2022/23 reduced incomes by up to £487 a year.57 In the long-term, the triple lock is still necessary to bring the UK state pension up to the OECD average.

Action to ensure decent jobs and growth for everyone

Efforts to induce business to invest in the economy through ever greater tax cuts have comprehensively failed. Instead we need to change the rules to encourage a long-term approach to delivering decent jobs and growth. That should include:

• Corporate governance reform to promote long-term sustainable investment and organic growth, rather than short-term focus on shareholder returns. Directors’ duties should be reformed so that directors are required to promote the long-term success of the company as their primary aim, taking account of the interests of stakeholders including the workforce, shareholders, local communities and suppliers and the impact of the company’s operations on human rights and on the environment. And company law should require that elected worker directors comprise one third of the board at all companies with 250 or more staff.
• Investment in the secure green energy future we need. Energy is expensive in the UK because of our broken energy system and dependence on volatile imported fossil fuels. The TUC has set out a plan to grow a new publicly-owned clean generation champion, in line with best practice in most other developed countries,58 to take our retail energy companies into public ownership, and to rapidly scale up investment into a secure net zero carbon energy mix.59
• Rebooting our skills system through a new national lifelong learning and skills strategy. The TUC is calling for a new national lifelong learning and skills strategy based on a vision of a high-skill economy, where workers can quickly gain both transferable and specialist skills to build their job prospects. Delivering this would require:
  • A significant boost to investment in learning and skills by both the state and employers. People should have access to fully-funded learning and skills entitlements and new workplace training rights throughout their lives, expanding opportunities for upskilling and retraining.
  • These entitlements should be incorporated into lifelong learning accounts and accompanied by new workplace rights, including a new right to paid time off for learning and training for all workers.
  • Create a new national social partnership on skills – led by employers and unions – to provide clear strategic direction, as in the case of most other countries. This should include renewed support for union learning.
  • And the government should reverse the counter-productive decision to cut the funding for UnionLearn.

Promote good jobs and protect workers’ rights

To boost domestic manufacturing, services and technology development, and reap the full benefit of developments  in infrastructure and renewable energy, the government should adopt strong trade and procurement policies to strengthen local supply chains and raise employment standards.

• Use local content requirements where they are legal and needed, learning from US practices in the Inflation Reduction Act.
• Trade deals and WTO rules should be used as a lever to lock in the highest standards of workers’ rights by enforcing respect for International Labour Organisation conventions.
• Uphold the Level Playing Field and Paris Agreement compliance commitments in the UK-EU Trade and Cooperation agreement to maintain high standards of workers’ and trade union rights.  The government must drop the Retained EU Law bill that would scrap the majority of retained EU workers’ rights and the Strikes (Minimum Service Levels) bill that would deprive workers of the right to strike.
• Ensure the Good Friday Agreement is protected and avoid a trade war with the EU by respecting the Northern Ireland Protocol.
• Refrain from agreeing trade deals with human rights abusers such as Gulf States, India and Israel – these drive a race to the bottom on workers’ rights globally.

• 53 See TUC (2022) ‘A fairer energy system for families and the climate’ https://www.tuc.org.uk/research-analysis/reports/fairer-energy-system-families-and-climate 
• 54 See TUC (2022) ‘A fairer energy system for families and the climate’ https://www.tuc.org.uk/research-analysis/reports/fairer-energy-system-families-and-climate
• 55 See TUC (2021) Beyond furlough: why the UK needs a permanent short-time work scheme at https://www.tuc.org.uk/research-analysis/reports/beyond-furlough-why-uk-needs-permanent-short-time-work-scheme
• 56 A lifeline for families: Investing to reduce child poverty this winter | IPPR
• 57 https://www.tuc.org.uk/news/government-must-reverse-decision-suspend-pensions-triple-lock-amid-cost-living-crisis-tuc
• 58 See TUC (2022) ‘Public ownership of clean power: lower bills, climate action, decent jobs‘   https://www.tuc.org.uk/research-analysis/reports/public-ownership-clean…
• 59 See TUC (2022) ‘A fairer energy system for families and the climate’ https://www.tuc.org.uk/research-analysis/reports/fairer-energy-system-families-and-climate