The TUC has told the Treasury that the Government could spend an extra ?31 billion on the UK’s vital public services in the next three years. The submission to the Treasury’s Comprehensive Spending Review claims that the Government’s own figures have underestimated the potential for higher public spending because growth assumptions have been revised upwards from 2.25% to 2.5%. TUC calculates that using realistic assumptions there will be an extra 9 billion pounds in 2001/02 rising to 12 billion pounds in 2003/04. This expenditure would keep the Government within its financial framework.The TUC argues that the extra spending is essential if Britain is to compare more favourably with its European counterparts. Currently the level of national income spent by the Government is 40.3% of GDP compared to 46% in the Euro area. Britain also lags Europe in terms of investment in public services and welfare benefits payments. Welfare transfer payments in Britain were 13% compared to an EU average of 19%.
Priorities for additional spending should be areas such as: health and education, including better pay for staff, transport; housing; jobs, family friendly policies and the New Deal. The TUC also advocates restoring the link between pensions and benefits and earnings.