Thursday, 17 June 2010

Lost tax and increased state benefits from public sector job losses would cost more than £15 billion

UNISON, the UK’s leading public sector trade union, today warned that Tory plans to cut 725,000 public sector jobs*, would cost the UK economy £6.6 billion in lost tax revenue and add an extra £8.8 billion** to the state benefits bill – hitting any chance of economic recovery and making the deficit worse.

The union is calling for a no-cut alternative - Save Our Services budget - to protect jobs, vital services, and safeguard economic recovery. The union’s alternative budget sets out savings of nearly £78 billion ahead of the Government’s own, on Tuesday (22 June).

Together with cutting real waste and making tax fairer, the union is backing the campaign for a Robin Hood Tax on banks which would raise an estimated £30bn a year.

Dave Prentis, UNISON General Secretary, said:

“Whatever the Tories would have you believe - there are real alternatives to their slash and burn cuts. Adding public sector workers to the growing number of people out of work will cost the country dear - £6.6bn in lost tax revenue as well as piling £8.8bn onto the benefits bill.

“As well as plummeting tax receipts and spiralling benefits, the spending power of public service workers will dry up, hitting local shops and businesses hard. This will damage the chance of recovery, spark a return to recession, and push the country towards a decade-long depression.

“The Robin Hood tax would raise an estimated £30bn a year and would go a long way towards digging this country out of recession. It is only right that the people responsible for causing the economic crisis should pay to get it out.”

More than 2,000 delegates and visitors to UNISON’s national conference in Bournemouth today voted to add the union’s support for a Robin Hood Tax – donning the familiar campaign green masks, led by Billy Bragg.

UNISON’s Save Our Services alternative budget:

£4.7bn could be raised every year by introducing a 50% tax rate on incomes over £100,000

£10bn could be raised every year by reforming tax havens and residence rules to reduce tax avoidance by corporations and ‘non-domiciled’ residents

£14.9bn could be raised every year by using minimum tax rates to stop reliefs being used disproportionately subsidise incomes over £100,000

£30bn could be raised every year by introducing a Major Financial Transactions Tax on UK financial institutions – the Robin Hood Tax

At least £1.5bn could be raised this year by bringing back the windfall tax on bankers’ bonuses.

£4bn could be saved this year by cancelling Trident, the project could cost as much as £100bn.

£500m could be saved every year by eradicating healthcare acquired infections from the NHS – the extra cleaners would cost half this.

£495m could be saved every year by adopting measures to improve the health and well-being of NHS staff, thereby reducing sickness absence

£1bn could be saved every year by halving the local government agency bill, as has been achieved by high performing councils

£5bn could be raised every year with an Empty Property Tax on vacant dwellings. This only exaggerates housing shortages and harms neighbourhoods.

£2.8bn could be saved every year by ending the central government use of private consultants who bring little discernable benefit

£3bn could be saved in user fees and interest charges every year if PFI schemes were replaced with conventional public procurement

Total – 77.895bn.

Notes to editors:

*The CIPD predicted last week that 725,000 public sector jobs could go over the next five years.

** Based on research by tax expert Richard Murphy.


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