Download Jobs and the economic recovery at risk

Jobs and economic recovery
at risk – have your say
The coalition government would have you believe that the economy has turned a
corner and that “the recovery” from the global financial crisis is well under way.
They point to small improvements in the UK economy (the level of UK Gross
Domestic Product - GDP) and to small decreases in the total number of people who
are unemployed.
We welcome these changes, but we also know that this recovery is not being felt by
our members and is a long way from what the government offered in 2010.
Hundreds of thousands of public service jobs are still at risk, and too many of the
new jobs that are being created are insecure and poorly paid.
Meanwhile, the public services that educate our children, care for the sick or the
elderly and clean our streets are being undermined by the largest austerity
programme the UK has ever seen.
What’s happened since 2010
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The UK economy has grown by only half the amount predicted in June 2010 and the
government is due to borrow £61 billion more in 2014/15 than originally planned.
By 2015/16 £37.5 billion will have been cut from public spending. This will rise to a cut of £67.8
billion by 2018/19 because the slow recovery means the government had to extend its
austerity programme by three years.
Over half a million (642,000) public service jobs have been culled since the coalition came to
power. Further planned cuts mean the total number of job losses is projected to rise to 1.1
million by 2018, unless there is a change of policy.
VAT was increased from 17.5% to 20%, an instant increase to the prices of goods and
services you pay for, with average energy bills up by £300 alone, while there was a tax cut for
people earning over £150,000.
Corporation Tax for the biggest companies (those with profits above £1.5 million) has been cut
every year from 28% in 2010 to 21% in 2014/15. The coalition wants this to fall to 20% in
2015/16, meaning those big companies will pay £7.165 billion less in taxes in that year than
they did in 2010/11.
While inflation has fallen from 3.5% in January 2010 to 1.7% in March 2014, wages have still
failed to keep pace. Because of this the price of food, transport, housing and energy has gone
up by more than the value of pay packets. This has been the longest sustained drop in real
wages since at least the 1960s, and research shows that living standards have suffered their
biggest fall since the Victorian era.
While unemployment has fallen from 2.49 million people in January 2010 to 2.33 million people
in January 2014, the vast majority of new jobs are low-paid and for the first time more working
families are now in poverty than non-working ones.
UNISON fighting for a fairer future
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Jobs and economic recovery at risk – have your say .........
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The government calculated that in 2010 the tax gap (the amount of uncollected and unpaid
taxes) was £32 billion. At the end of 2013 government calculations showed the tax gap to have
risen to £35 billion while the number of tax collectors continued to be cut.
Economic inequality in the UK has grown – with the country’s five richest families now owning
more wealth than the poorest 20% of the population and the Office for Budget Responsibility
confirming that people will be worse off in 2015 than they were in 2010
What needs to happen
We don’t need cuts and austerity. We need positive economic policies and greater direct
intervention to aid UK economic growth and boost living standards.
This can be funded through a fair and progressive taxation system that sees a proportionate
contribution from every individual and business. UNISON believes that the UK needs a pro-growth
strategy involving job creation and a package of targeted investment in the infrastructure and
services our economy needs. A more productive economy means more money is generated to pay
for better public services.
Recognising that long-term plans will take time to deliver, UNISON believes the government
should introduce some “quick fixes” including:
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Moratorium on job cuts in the public services, paid for with a permanent 50% tax on
bankers bonuses above £25,000
Restore Corporation Tax to previous levels to pay for public service pay rises
Introduce a tax on the most expensive homes so the cuts to housing and council tax
benefits can be reversed.
Increase the minimum wage to a living wage to put more money in people’s pockets and
boost spending in local shops - generating around £3.6 billion in tax receipts/national
insurance contributions and savings by spending less on social security payments/tax
credits
End VAT exemption on private health care treatments to raise £2 billion extra for social
care
Use the same system the government used to bail out the banks to bail out the house
building and construction industry - providing 100,000 new homes a year and the new
infrastructure the country needs to keep it moving and boost renewable energy sources
What can I do?
Please talk to you friends and family about the issues raised in this fact sheet.
It is now less than a year to the general election. Many politicians will be knocking on your door or
ringing you up to ask for your support. Use these opportunities to ask them where they stand on
further cuts to jobs and services - and tell them what you think.
Make sure you are registered to vote.
Talk to colleagues in your branch about how you can get involved in or start local community
campaigns on these issues in the period between now and the next general election.
You can read more details about UNISON’s ideas for a more positive economy at
www.unison.org.uk/documents/3414
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UNISON fighting for a fairer future
unison.org.uk/million