UK must prepare for more economic shocks

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 tell the annual congress later Monday.

“Climate disaster 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 further large post-pandemic tax rises on businesses. In a speech later on Monday, CBI director general Tony Danker will warn that ministers must make “bold choices” to encourage business investment.

Following last week’s announcement of increased levies to support social care, there is a risk that the government would use company taxes to “carry the load,” he will warn. He would add that such a policy has ramifications for growth.

Ms O’Grady will speak at the TUC Congress in London about the dangers of further pandemics, climate change, and technological disruption to workers. She is expected to add, “Years of austerity took their toll, and we fought this pandemic with one hand tied behind our backs.” “In the future, the UK must be better prepared for catastrophes. New technology creates new opportunities while also posing old work challenges.”

Ministers may question what they can do to assist fill employment shortages, she will say. “Well, here’s a fresh suggestion,” she’ll add. “Let’s make that industry provide excellent working conditions, direct employment, and a proper pay raise.”

“No one can legitimately argue that working people don’t deserve a pay raise after decades of real wage losses and declining living conditions.” Ms. O’Grady will also question Prime Minister Boris Johnson about his “levelling up” agenda. “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, branding 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 far too much inequality, and it has only gotten worse. For years, we’ve known that working people have been subjected to salary freezes and pauses.” She claimed that shifting the tax burden on wealth could promote 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.”

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 lagging behind some of its overseas competitors in terms of pushing investment in future industries.

“The biggest concerns for business are the government’s lack of detail and pace on some of the fundamental economic choices we must make as a country,” he will add. “Investment by the UK: that must be our slogan today,” Mr Danker will argue, “so that the decade ahead does not repeat the poor growth, negative productivity of the previous decade, and government holds 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 decision to raise taxes.
We’ve asked individuals and businesses to contribute a little more to help us get our public finances back on track “Added the spokeswoman.

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