TUC detailed comments on PBR

Commenting on the Pre-Budget Report, TUC General Secretary, Brendan Barber said:

The Chancellorís last PBR is one of substance and the big themes of globalisation and the environment that will dominate politics in years to come.

It is sensible and prudent, with welcome proposals to boost skills and RandD, tackle child and pensioner poverty, and invest in education.

Increased taxes on air travel and fuel may not be celebrated in the streets tonight, but the vast majority must now accept that activities that damage the environment will cost more.

Public Sector Pay
Brendan Barber, TUC General Secretary, said: We are disappointed that the Chancellor continues to call for pay settlements of no more than 2% in the public sector. There is no justification for holding down public service pay, when the Treasury admits that temporarily higher inflation has come from oil prices and has nothing to do with pay. This will only undermine morale among public sector workers and make recruitment and retention more difficult.

Efficiency Savings
Brendan Barber, TUC General Secretary, said: Playing a numbers game with civil servants is not the way to plan the future of the public services. The Pre-Budget Report argues that nearly 55,000 posts had been removed by the end of September 2006 as a result of the Gershon review. Yet other government figures suggest that civil service employment is 12,000 posts fewer in the two years to the middle of this year.

Casual assumptions that civil service posts can be cut to no effect or easy slogans about cutting back office staff to help the front line are mistaken. Cutting back- office staff does not help front line workers, it simply ties them up doing the vital administration that gets in the way of providing front line services.

National Minimum Wage
Brendan Barber, TUC General Secretary, said The TUC strongly supports the increase in resources for enforcing the minimum wage and tougher penalties for minimum wage cheats. Itís time to get tough with the exploiters, and is a welcome early result for the TUCís campaign to increase the protection of vulnerable workers. Rogue companies who pay below the legal minimum both undercut decent employers and give poverty pay to their workforces. Raised penalties for persistent offenders, and criminal prosecutions in extreme cases, send a powerful message that non-compliance will not be tolerated.

Environment
Brendan Barber, TUC General Secretary, said: The financial costs of pollution must rise to reflect this. We welcome the decision to end the fuel duty freeze and to raise tax on aviation fuel. These measures are wholly consistent with the Eddington Review, which argued that all modes of transport should pay their way environmentally.

We also welcome the commitment to boost green enterprise in the UK, through the 550m in public and private contributions raised for the new Energy Technologies Institute. The Chancellor is right to stress the importance of developing carbon capture and storage by announcing new initiatives in this area. We hope this is just the beginning of a more extensive and rapid series of projects designed to develop and roll-out this crucial technology. Such technology can create significant new employment and industrial opportunities in the UK.

The Chancellor has shown he is just starting to get serious about the environment. But he must also remain mindful of the wider social and economic impact of green policies. We must ensure that the drive to cut CO2 emissions is borne equally and fairly by different sectors of the economy and by those on varying incomes. The Government must work as closely as possible with trade unions and business to ensure that our transition to a low carbon economy is just, as well as effective. Its co-operation with the Haulage Industry Task Group, as reported in the Pre-Budget Report, is most welcome.

The Economy
Adam Lent, TUC Head of Economic and Social Affairs, said: The forecast for higher than expected growth of 2.75% in 2006 is to be welcomed, as is the predicted return to the 2% inflation target by the middle of next year. The economy is fundamentally sound. What business, and especially the manufacturing sector, now needs is interest rate stability. There is no need for further rises in interest rates for the foreseeable future.

The public finances remain on track. We are braced for a tough spending settlement next year, but in the meantime, important investments already promised in health, overseas aid and, as set out in detail today, education can go ahead. These are vital for a strong economy, a healthy society and a fairer world.

Research and Development
Brendan Barber, TUC General Secretary, said: As the Chancellor made clear, the only way for the UK to compete with China and India in the global economy is to out-innovate and out-perform our competitors. The TUC has long called for action to foster closer relationships between universities and the corporate world. For this reason, we strongly endorse the announcement of 60 million of Quality-Related research funding a year.

Skills and Education
Brendan Barber, TUC General Secretary, said: We welcome the emphasis on skills and education. The Chancellor accepted the new vision for skills set out in the Leitch report. His target of 90 per cent of all adults to have a qualification equivalent to five good GCSEs by 2020 compared to less than 70 per cent now is welcome. So is doubling apprenticeship numbers to half a million by 2020 and giving older employees a chance to gain the new skills they need to deal with industrial change.

The TUC was pleased to note that in his speech the Chancellor highlighted the importance of the new statutory right to workplace training advocated by Lord Leitch. This new right will be introduced in 2010 if employers fail to meet a voluntary íemployer pledgeí to use state-subsidised training to skill their employees without a Level 2 qualification (i.e. five good GCSEs or the vocational equivalent).

The TUC will be lobbying Government over the coming months to ensure that this new legal right to workplace training is framed in a such a way that it will be automatically invoked in 2010 if employers fail to deliver. It should also give employees a clear entitlement to paid time off to train within working time to achieve the relevant qualification.

The TUC will also be calling on Government to set out a framework to give employees and trade unions a significant voice in the new institutional skills framework that will be established as a result of Lord Leitchís recommendations. In particular, unions will need to have a significant stake in the new Commission for Employment and Skills and also increased representation on the relaunched Sector Skills Councils.

The Chancellor also announced a welcome increase in investment in the educational infrastructure with total capital investment rising from 1.5 billion in 1997 to 8.3 billion next year and rising over the longer term to 10.2 billion by 2010/11. In England this will result in a major construction programme with 12,000 new or completely refurbished schools, affecting half of all primary schools and 90 per cent of all secondary schools. One hundred colleges serving one million students will also be rebuilt and there will be 3,500 new childrenís centres serving the needs of nearly three million children. Child Poverty Brendan Barber, TUC General Secretary, said: The Chancellorís continued concern to tackle child poverty is very welcome. Major strategic change was unlikely today given the continuing review of Lisa Harkerís report for the DWP saying that the 2010 target of halving child poverty can only be hit if tax credits and benefits are raised. Yet a number of very useful reforms were announced. In 2009 a TUC campaign demand will be delivered with the extension of Child Benefit to women in the last three months of pregnancy; this will help families cope with the extra costs of having a baby and make it easier for expectant mothers to eat a healthy diet. The Chancellor also announced plans to extend the 10 maintenance premium in means-tested benefits to parents on the old child support scheme, benefiting 40,000 lone parents, and measures to spread good practice in the management of Sure Start Childrenís Centres. Pensions TUC General Secretary, Brendan Barber, said: The TUC welcomes the Chancellorís emphasis on tackling fuel poverty, which is a major problem for the poorest pensioners. It is good that the Winter Fuel payment will be paid for the duration of this Parliament - but the level of the payment should be kept under review in light of rising energy costs.

We welcome the increase to the Basic State Pension next April of 3.6% but we believe the Governmentís commitment to uprate the basic state pension in line with earnings should be brought forward to provide vital assistance to current pensioners.