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More Economic Woes Set For UK’s Future

According to the TUC, the UK has to be better prepared for future economic crises.

“Covid will not be a one-off,” Frances O’Grady, the union federation’s general secretary, will address the annual congress later Monday.

“Climate catastrophe is now here, and the longer we wait to go to net zero, the more disruptive it will be,” she says.

Simultaneously, the CBI is pushing the government to refrain from imposing any large post-pandemic tax rises on businesses.

In a speech later on Monday, CBI director general Tony Danker will argue that policymakers must make “bold choices” to support corporate investment.

Following last week’s announcement of increased levies to support social care, there is a risk that the government would use corporate taxes to “carry the weight,” he will warn.

He would add that such a policy has repercussions for growth.

Change Is Needed

Ms O’Grady will speak at the TUC Congress in London on the dangers of new pandemics, climate change, and technological disruption to workers.

She is expected to remark, “Years of austerity took their toll, and we fought this epidemic with one hand tied behind our backs.”

“In the future, the UK must be better prepared for emergencies. New technology creates new opportunities while simultaneously posing old work risks.”

Ministers may ask what they can do to assist fill employment openings, she will say.

“Well, here’s an unique proposal,” she’ll remark. “Let’s make that industry provide acceptable working conditions, direct employment, and an appropriate pay raise.”

“No one can really argue that working people don’t deserve a pay raise after decades of actual wage cutbacks and deteriorating living conditions.”

Ms. O’Grady will also question Prime Minister Boris Johnson about his “levelling up” strategy.

“If leveling up means anything, it must imply leveling up at work and living conditions,” she would argue, claiming that the Covid epidemic “must be a catalyst for actual change.”

Ms O’Grady encouraged the government to review recent increases in National Insurance contributions, calling the decision as “another hit” to young people and low-paid employees, in an interview with BBC Radio 4’s Today programme ahead of her address.

“Before the crisis, there was much too much inequality, and it has only gotten worse. For years, we’ve known that working people have been subjected to wage freezes and pauses.”

She suggested that shifting the tax burden on wealth may stimulate economic demand.

“One thing you can count on from working people is that they will spend their money locally, which is what will re-energize the economy.”

Real Economic Investment Desperately Required

Mr Danker, speaking on behalf of the CBI, is expected to warn that a return to “business as usual” in economic policy would be a mistake, with the UK trailing behind some of its foreign competitors in terms of encouraging investment in future sectors.

“The biggest worries for business are the government’s lack of specificity and speed on some of the key economic choices we must make as a country,” he will add.

He’ll propose a number of measures, including:

  • Taxation that is more intelligent and rewards companies who invest in the future
  • Individual training accounts have been created to make it easier to get help.
  • Using “catalytic” public investment to accelerate large infrastructure projects
  • Replicating offshore wind’s success in hydrogen and other new sectors while also rebalancing economic regulation.

“Investment by the UK: that must be our motto today,” Mr Danker will add, “so that the decade ahead does not repeat the poor growth, negative productivity of the previous decade, and government has the key to unlocking it all.”

The government had demonstrated its commitment to supporting business investment by extending the Annual Investment Allowance for another year and introducing the super-deduction, which it described as “the biggest two-year business tax cut in modern British history,” according to a Treasury spokesperson.

“As a result of the pandemic’s impact, we’ve had to make the difficult but necessary choice to raise taxes. We’ve asked people and companies to contribute a little extra to help us get our public finances back on track “Added the spokesman.

 

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