Press release – Proposed Budget Cuts

Bolton 2021 Budget

Bolton TUC is calling upon all elected members of Bolton Council to reject any proposal to make such massive cuts to the Bolton Budget

Such cuts will have devastating effects upon the most vulnerable people of Bolton and thrust hundreds into unemployment.

Councillors should be under no illusion that such cuts will reduce the quality of life of many of our neighbours and put unimaginable pressure upon carers and other statutory services which are already buckling under the pressure of the Pandemic.

The hundreds of council job losses will be compounded by the jobs losses of those who rely on those council staff to buy their services in the struggling retail and service sectors.

We have heard much from the prime minister about his levelling up agenda and indeed from the Bolton NE MP who declared the Boris had Boltons back, well now is the time to turn those sound bites into practical support for the people of Bolton.

It is time for councillors to set aside party politics and consider what their vote on Wednesday will mean, and it can only mean one of two things, either they want to send a clear message to central government that enough is enough and central government must intervene, or, they are happy to put hundreds of workers onto benefits and the most vulnerable people of Bolton into the worst hardship of their lifetimes.

Kevin Allsop

Secretary, Bolton TUC

In Solidarity with the Shrewsbury 24

Shrewsbury 24 Appeal Court Hearing 3rd and 4th February 2021

We have just spent two historic days in the Royal Courts of Justice, where three appeal court judges heard the appeals of the pickets. Terry Renshaw and John McKinsie Jones joined Campaign Researcher and Secretary, Eileen Turnbull, Campaign Chairperson Harry Chadwick, and Mark Turnbull campaign member in Court 4 to watch proceedings.

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The impact of the pandemic on household finances

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The impact of the pandemic on household finances

The pandemic is having a significant impact on people’s household finances. Some will be saving money, due to no longer having to commute or due to discretionary spending being constrained while holidays, meals out and pub visits aren’t possible.

Others will be facing a hit to their income. Most seriously, many people have lost their jobs. The latest labour market data shows that unemployment is increasing and that the number of redundancies is at a record high[1].

The situation would have been much worse without the job retention scheme, which has helped to protect millions of jobs. At the peak of the first lockdown, 9 million people were furloughed, and 4 million people remain furloughed as of 31 December 2020[2]. While the job retention scheme has protected employment income, it has, however, required many workers to survive on just 80 per cent of their normal wages.

ONS survey data from October 2020 shows that around 4-in-10 furloughed employees in the private sector didn’t receive a top up to their wages[3]. The Annual Survey of Hours and Earnings (ASHE), conducted in April 2020, found that low-paid workers were the most likely not to have their pay topped up. As a result, two million people were being paid below the minimum wage in April 2020, with around 1.3 million of these being furloughed employees on reduced pay[4].

The high number of employees pushed below the legal minimum wage reflects the fact that in April 2020, more than half of employees in the lowest decile of hourly earnings (earning less than £8.72 per hour) were furloughed and receiving reduced pay. The proportion of employees furloughed without being paid the top-up was highest in industries such as hospitality (39 per cent), the arts (27 per cent), and construction (26 per cent)[5].

In our National Workers Survey, a nationally representative survey of 2,231 people in England and Wales conducted by BritainThinks between 19th-29th November 2020, 10 per cent of respondents were on furlough. 7 per cent of respondents were on furlough without a top up to wages, compared to 3 per cent who were on furlough but getting wages topped up by their employer[6].

Another hit to household finances is increased costs caused by the pandemic. In particular, those with children are facing increased costs due to having their children at home. Analysis by the Resolution Foundation found that “families with children estimated to be in the lowest pre-pandemic income quintile were twice as likely to report an increase in spending (36 per cent) than a decrease (18 per cent)”. Reasons behind this include higher spending on food (which itself is becoming more expensive) and energy, the extra costs associated with home schooling, as well as having to find ways to entertain children[7].

Alongside this, at a time when many people will have to self-isolate, statutory sick pay (SSP) remains incredibly low at just £95.85 per week. Working people who have to self-isolate but receive either SSP or no sick pay at all will face big hits to their income. Average weekly earnings are currently £531[8], meaning that the average worker on SSP will face an 82 per cent drop in weekly pay in their first week of self-isolation.

Measuring the hit to household finances

Following our previous report on debt and sick pay[9], we’ve again asked working people about the impact of the pandemic on their household finances. We particularly asked about how the pandemic has impacted their level of disposable income, their level of debt, and whether they have enough money to get through each week.

Less disposable income

37 per cent of working people told us that their household’s level of disposable income has decreased since the start of the pandemic[10].

This has particularly impacted those on a low income. Half (50 per cent) of those earning less than £15,000 have said their level of disposable income has fallen since the pandemic began. This compares to three-in-ten (29 per cent) of those who earn more than £50,000 per year. A quarter (24 per cent) of those on higher incomes strongly disagreed that they’d seen a drop in their disposable income, compared to just 1-in-10 low-income workers.

69 per cent of furloughed workers and 89 per cent of recently redundant workers have seen a drop in their income, compared to 32 per cent of those in work as normal. As have those in insecure work (55 per cent) and those on benefits including Universal Credit (50 per cent). Looking at just those on Universal Credit, this rises to 62 per cent. Women are also more likely to report a drop in disposable income than men (41 per cent compared to 34 per cent).

Having to cut back

Unsurprisingly given the fall in disposable income, a third of workers (34 per cent) report having to cut back spending at the end of the week or month more since the pandemic began because they have run out, or might run out, of money. This means there has been no improvement of the situation since we asked the same question in early August, when 33 per cent of respondents to our survey told us they were having to cut back to make ends meet[11].

Following the same trends we saw among the workers more likely to be experiencing a fall in disposable income, those on a low income, those who have been furloughed or recently made redundant and those in insecure work are more likely to be cutting back:

  • 46 per cent of those earning less than £15,000 per year have been cutting back to make ends meet more since the pandemic began, compared to a quarter of those earning above £50,000 per year
  • 57 per cent of those who are furloughed and three-quarters (76 per cent) of those recently made redundant are cutting back, compared to 29 per cent of those in work as normal
  • 44 per cent of those in insecure work have had to cut back, compared to a third of those in secure work
  • As well as this, younger and middle-aged workers have been cutting back more. Four-in-ten (39 per cent) 18-24 year olds and a similar percentage of 35-49 year olds have been cutting back, compared to three-in-ten (28 per cent) 50-64 year olds and one-fifth (18 per cent) of those over 65

And much like in August, disabled workers, Black and Minority Ethnic (BME) workers, female workers and those on benefits are all more likely to be cutting back on spending as a result of the pandemic.

Increased debt

Having to cut back isn’t the only consequence of the hit on household finances. Debt levels for some households are rising. Despite the households’ saving ratio being significantly higher than it was before the pandemic[12], one-fifth of workers (21 per cent) told us that they’d seen their levels of debt increase since the pandemic began. This reflects something we mentioned in our previous report, and supported by research by organisations such as the Bank of England[13], IPPR[14] and Resolution Foundation[15]: while higher income households are likely to be saving money due to the pandemic, lower income households are struggling. The pandemic is entrenching existing inequalities.

The rise in debt was particularly noticeable among:

  • Low-paid workers. Three-in-ten (29 per cent) workers earning less than £15,000 per year reported higher levels of debt as a result of the pandemic, compared to one-in-five in other income groups
  • Furloughed workers and those recently made redundant. 35 per cent of furloughed workers and 46 per cent of those recently made redundant have experienced high levels of debt, compared to 19 per cent of those working as normal
  • Those in receipt of benefits. 37 per cent of workers receiving benefits reported increase debt due to the pandemic, compared to 17 per cent of those not in receipt of benefits
  • Disabled workers. Four-in-ten (38 per cent) of workers whose day-to-day activities are limited a lot due to a disability told us they’d seen their levels of debt increase, compared to one-in-five non-disabled workers

BME workers were also slightly more likely than white workers to report higher levels of debt (24 per cent compared to 21 per cent). And women were slightly more likely than men to report the same (23 per cent compared to 20 per cent).

Struggling with bills

Our findings correspond with the findings of other organisations, adding to the evidence of a household debt crisis that was already growing before the pandemic[16], but has been worsened by the crisis.

Citizens Advice have estimated that 6 million adults in the UK have fallen behind on at least one bill, with 1.2 million falling behind on rent[17]. They’ve raised particular concerns about council tax debt, estimating that over 3.5 million people are currently behind on council tax. Council tax debt is a particularly problematic debt due to the regulations around the debt being inflexible, leading to small debts quickly escalating, and unnecessarily harsh collection methods being used[18].

What needs to be done

The government must take urgent action to avoid a worsening household debt crisis that is already hitting people hard and looks set to leave many struggling with debt and repayments for years to come. This is important both in terms of helping those who are struggling and helping the economy to recover. Any recovery will depend on people being able, and feeling confident, to spend. This is unlikely to be the case if people are burdened by debt repayments.

Government must help to prevent the crisis worsening by protecting jobs, increasing the minimum wage, overhauling our benefits system to make it fit for purpose, and increasing statutory sick pay. As well as this, it must provide support for those already in debt through a wider package of support for struggling households.

The TUC’s budget submission sets out our programme to boost workers’ jobs, pay and incomes across the board. Here we set out specific actions that are needed to tackle problem debt.

Protecting jobs

To protect jobs in the immediate future, the government must improve and extend the furlough scheme.

The two largest rises in unemployment in 2020 occurred in months when support was reduced or expected to end[19]. The government must therefore ensure it does not remove the furlough scheme too soon, or allow another situation where the future of the scheme is uncertain. It should create certainty by extending the furlough scheme until the end of 2021.

The government must also urgently act to introduce a requirement that no one’s pay drops below the legal minimum while furloughed. And the minimum wage

We also need to see the government investing now to help create jobs in the coming years. Research carried out for the TUC by Transition Economics reveals that fast tracking spending on projects such as broadband, green technology, transport and housing could deliver a 1.24 million jobs boost by 2022[20], and the TUC has set out plans to fill and create 600,000 jobs in the public sector.[21]

Raising the minimum wage

Over 9 million employees, including 3.7 million key workers, are paid below £10 per hour[22]. A £10 minimum wage would mean a pay increase for millions of low-paid workers who have struggled through the pandemic and would ensure everyone is paid enough to live on.

Increase statutory sick pay

The weekly SSP rate must be permanently raised to at least the equivalent of a week’s real living wage (£330 per week). This would guarantee that everyone who has to take time off work when sick would still at least be paid enough to live on.

Strengthening the safety net

For those who do lose their jobs, the benefits system fails to provide adequate support. It needs an emergency overhaul to make it fit for purpose.

The social security system should support those who do lose their jobs to stay on their feet rather than fall into debt. Government must therefore:

  • Raise the basic level of universal credit and legacy benefits, including jobs seekers allowance and employment and support allowance, to at least 80 per cent of the national living wage (£260 per week).
  • End the five-week wait for first payment of universal credit by converting emergency payment loans to grants.
  • Remove the savings rules in universal credit to allow more people to access it.
  • Significantly increase child benefit payments and remove the two-child limit within universal credit and working tax credit.
  • Ensure no-one loses out on any increases in social security by removing the arbitrary benefit cap. In addition, no one on legacy benefits should lose the protection of the managed transition to universal credit as part of this change.
  • Scrap the no-recourse-to-public-funds rules that deny working families access to social security.

Wider support for struggling households

We reiterate our calls for a more extensive package to support household finances. This should include a fully funded freeze on council tax debt repayment. Council tax debt collection is harsh, ineffective, inefficient and can push people further into debt. It also comes with the underlying threat of imprisonment.

The government should also:

  • Increase the short-term hardship funding provided to councils while also establishing a permanent fund that provides a source of grants to support those facing hardship. This will allow councils to implement properly funded long-term support for struggling households
  • Explore ideas such as writing off council tax debt and providing the outstanding money to councils. The latest available data shows that, as of the end of March 2020, the total amount of council tax outstanding was £3.6 billion[23]. Writing this off and paying the outstanding amount to councils would have two benefits: providing both debt relief for struggling households and a significant cash injection to local councils
  • Increase the support it provides to renters, including an extension of the eviction ban that is set to end in February 2021

A Workers’ Budget: TUC Submission for HM Treasury March 2021 Budget

The devastating second wave of the coronavirus pandemic is an immense challenge to society. We know that without protecting public health, the economy will be unable to recover. We urge the Chancellor to remain resolute in his pledge to do ‘whatever it takes’. The measures taken to date have supported the economy and slowed a catastrophic breakdown in household incomes. But there is more to do to protect jobs, and livelihoods, and to support people who want to do the right thing to protect public health.

In the Budget the Treasury should pledge to support workers, families and businesses for as long as the pandemic continues and economic activity is disrupted.

  • The Job Retention Scheme should be extended until the end of 2021, mirroring the support in place in other leading economies. It should be  accompanied by a ‘furlough commitment’ to keep in place or renew support for as long as health measures affect economic activity, with the Chancellor providing a quarterly update on the state of the labour market and the support available.
  • The need to fix sick pay has never been more urgent. Sick pay should be raised to £320 a week, and eligibility extended to the 2 million people who do not qualify because they earn too little.
  • Universal Credit could provide a vital lifeline for many families during this time. It should be increased to a level people can live off – £260 a week – and there must be no rowing back on the £20 uplift introduced last year. The five-week wait to access the benefit must be ended. 
  • Key workers should be properly rewarded: public sector pay should be increased not frozen; and zero hours contracts should be banned.
  • Beyond immediate measures to protect workers, the government needs to get serious about creating jobs. The TUC has set out proposals for a public sector jobs drive, green infrastructure spending and a family stimulus. And there should be an immediate £10bn aid package to help industry cope with new trade barriers and make manufacturing the best in Europe. 
  • The coronavirus pandemic has revealed the depth of inequalities in Britain today, with structural racism, sexism and discrimination against disabled people resulting in sharply different experiences of the pandemic. Government must show how the measures it takes in this Budget and more broadly will promote equality and overcome the structural barriers faced by too many working people across the UK.

We must take the opportunity to reflect on the lessons of the pandemic. Serious flaws in how the UK and world economy work have been put into sharp relief, not least the poor pay and severe inequalities faced by those who keep the country going.  After the Second World War, the Attlee government built back better to a welfare state, the NHS, education and housing for all. In doing so they created a better economy and brought the public finances back under control. We can do so again.

Download full report (pdf)

The Future of Education

The governments incompetence has been exposed time and again throughout the pandemic.  The grave fact is that it is incompetence reckoned in not just money lost but over one hundred thousand lives lost.

If only we could believe that if it were to happen again the governments response would be different, faster, thoughtful putting the community, not business, at the top of things to safeguard.

We have four great speakers lined up for this event with entry by booking and look forward to a good debate that brings out ideas of how we should move forward

Transport Workers are Essential Workers

Transport Workers are Essential Workers

We stand beside our affiliate RMT as they launch their TRANSPORT WORKERS ARE ESSENTIAL WORKERS campaign amid threats of pay freezes and job cuts.

TRANSPORT UNION RMT said today that it will be launching a fresh wave of campaigning under the banner TRANSPORT WORKERS ARE ESSENTIAL WORKERS as threats of pay freezes and possible attacks on jobs and conditions emerged in Government briefings over the weekend.

The new campaign, which will be rolled out through a high profile advertising blitz on social media and in press ads, will tie in with work being carried out through the TUC and an alliance of unions designed to halt the threat of pay freezes and cuts to standards of living across Britain’s public services and public sector in the wake of the COVID pandemic.

RMT says it would be a kick in the teeth for transport workers, staff who have kept Britain’s essential workers and freight moving for the past year whilst being disproportionately and heavily exposed to the virus in the process, were to be repaid with a hit to their living standards and livelihoods.

RMT General Secretary Mick Cash said:

“Today, transport workers who are risking their lives keeping our country moving have found out they have been stabbed in the back by the Government who have extended the public sector pay freeze to the transport sector whilst at the same time it’s business as usual for the private companies who will continue to be able to rake in profits.

“RMT will have no hesitation in supporting national coordinated action to deliver our members the pay rise they deserve.”