ON THE eve of today’s Budget, TUC General Secretary Brendan Barber warned that if the number of Jobseeker’s Allowance (JSA) claimants increases by one million over the next 12 months, ‘it will cost taxpayers more than £250 a second’ or £8.1bn.
Addressing the Scottish TUC Congress in Perth, Barber said that mass unemployment would be the biggest possible drain on public finances and urged that jobs should be at the heart of today’s Budget.
Earlier he had warned that: ‘Even now that the RPI measure of inflation has fallen below zero, this shouldn’t be the signal for employers across the country to seek wage freezes or cuts in pay.’
Barber told the STUC: ‘The biggest drain imaginable on public finances is mass unemployment.
‘Every person on the dole costs the rest of us £8,100 a year. We have to pay for their benefits and we don’t get the tax that they would pay if working.
‘And that’s before you consider the wider price to be paid – the cost of rising crime, of declining public health, and of leaving communities to fend for themselves.
‘I’m deeply concerned by reports saying the government believes it can find £15 billion of “efficiency” savings from the public sector.
‘Of course we are in favour of the efficient use of resources and I don’t doubt that there are some sensible changes that can be made – reviewing the PFI programme for example.
‘But the idea that there are £15 billion worth of painless cuts is quite mistaken.
‘To claim this is to play into the hands of the small-state right who lose no opportunity to attack the public sector, its staff and their pensions.
‘The best way of reducing the public sector deficit is by doing everything we can to ensure that the UK economy recovers as quickly and successfully as possible.
‘The more long-term damage the recession does to our wealth creation, the harder it will be to recover the taxes now in decline.
‘That is why not just unions, but employer groups too, are calling for subsidies for short-term working.’
Barber concluded his speech by saying: ‘I want to see the government show the same determination in protecting working people from the worst of the recession as it has in protecting banks from the greedy excesses of their bosses.’
UK annual inflation measured by the Retail Prices Index (RPI) went negative in March for the first time since 1960, to -0.4 per cent, down from zero in February, the latest figures showed.
According to the Consumer Prices Index (CPI) inflation was at 2.9 per cent in March, down from February’s 3.2 rate but well above the government’s target of two per cent.
Clothing, footwear and women’s outerwear prices increased dramatically in March, while some vegetable prices came down over the month.
The RPI is the figure that the government uses to determine what happens to benefits and the basic state pension.
Michelle Mitchell, charity director of Help the Aged and Age Concern said: ‘Falling headline inflation masks the fact that many older people’s real rate of inflation remains far higher than the average.’