Budget must focus on young jobless, says TUC

12 Mar 12
The Trades Union Congress has urged Chancellor George Osborne to take ‘bold measures’ to boost the economy in his Budget next week, including plans to tackle youth unemployment.

By Richard Johnstone | 13 March 2012

The Trades Union Congress has urged Chancellor George Osborne to take ‘bold measures’ to boost the economy in his Budget next week, including plans to tackle youth unemployment.

Youth unemployment

In its submission ahead of Osborne’s March 21 statement, the TUC warned that ‘flat-lining’ growth and high unemployment risked ‘losing a generation of talented and highly skilled youngsters to joblessness’.

The government should increase investment in employment programmes, as current work experience schemes – run by the Department for Work and Pensions for a maximum of eight weeks – were ‘cut-price [and] poorly targeted’.

There should be a guarantee of paid work or training for any young person who has been out of work for at least six months, said the TUC. This should operate alongside a ‘youth credit’that would integrate all financial support available for people aged 18 to 24 into one payment.

The congress also called on the chancellor to increase capital investment tax allowances to create incentives for companies to invest their reserves into the economy.

But it added that last year’s 2% corporation tax cut should be reversed, as it has failed ‘in its core purpose’ of encouraging businesses to spend. The series of 1% cuts in the tax planned for the next three years, set to start next month, should be halted.

General secretary Brendan Barber said that growth of 0.8% in 2011 showed ‘the government’s austerity strategy is plainly not working’.

He added: ‘So rather than carrying on with self-defeating cuts, the chancellor should do what’s right for the economy and prioritise tackling our jobs crisis and getting businesses to invest more of the £724bn they are currently sitting on.

Bold new measures such as youth credits and a job guarantee will help get young people’s careers off the ground. A tax system that rewards investment, rather than propping up the City, will help generate growth and jobs in the real economy too.’

The TUC’s submission has followed Labour leader Ed Miliband’s call for ‘a Budget for jobs and living standards’ to boost growth, tackle falling living standards and reform the economy.

This should include ‘a more balanced approach to deficit reduction’, he said in a speech at the Royal Festival Hall in London yesterday. A ‘Budget for the long term’ would also tackle youth unemployment, including putting in place new rules on procurement to support business that provide apprenticeships.

Cutting the top 50p income tax rate for those earning over £150,000 would be ‘the wrong priority for Britain’, he said.

There has been speculation that the 50p rate might be reduced in the Budget. Miliband criticised the government for spending’ the last few weeks arguing over the political cover they need’ to cut it.

Shadow chancellor Ed Balls said that if Osborne introduced a so-called mansion tax on high-value properties, then Labour ‘will support him’, but only if the money is used to support those on low incomes. Recent speculation has centred on the revenue raised from such a levy being used to reduce the top rate of income tax.

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