Press Association
Tuesday 6th January 2009
Pressure on the Government to cut the taxes of low and middle income earners has grown after the TUC said putting more money into the pockets of low paid workers was the most effective way to stimulate the economy.
The union organisation said the Chancellor should use next week's Pre-Budget Report to help victims of the current economic downturn by suspending housing repossessions, increasing redundancy pay and boosting benefits.
In a letter to Alistair Darling, the TUC said there should be a permanent "rebalancing" of the tax system to make the super-rich pay more and those on low incomes less.
The TUC also pressed for an extra £10,000 tax free allowance for redundancy pay spent on training and said infrastructure spending should be brought forward.
General secretary Brendan Barber praised the Government's reaction to the financial crisis but said the Pre-Budget Report should be as bold in heading off unemployment, as it has been in resolving the banking crisis.
"Policy must be designed with three objectives in mind - to prevent job loss, to get the unemployed back to work and to prevent those in unemployment facing hardship.
"The Government has shown the rest of the world the way in how to rescue the financial system. Now it must show the same commitment to making the recession as short and as shallow as possible.
"This requires not just a big boost to the economy, but a smart one. It should give extra resources to medium and low paid workers and the unemployed who are most likely to spend extra cash, and it should boost public spending in ways that will both produce immediate economic benefits but also make the UK a fairer and greener place.
"We are going to have a grim time, but at least at the end of it we should aim to emerge as a better balanced and more sustainable country that has decisively narrowed the gap between the super-rich and the rest of us."
The TUC said there will be a legacy of long term unemployment which could last up to three years after the recession has finished.
