Headlines: August 14th, 2002

The TUC has offered a considered analysis of the third Comprehensive Spending Review (CSR), looking at what the injection of sixty billion pounds in public services is likely to mean for the UK, compared with the rest of the economically developed countries of the world.In what is a predictably positive welcome for the CSR, the TUC argues that the choice of New Labour to spend so much on public services provides the clearest point of difference between the political parties.

And it says that such investment is likely to be the key issue in the next general election.

On the burden of taxes, the report says taxes remain lower than our major competitors in the US, France and Germany, with the UK 21st out of 27 OECD countries, or 21st out of 24 industrialised countries, depending on which kinds of taxes and countries are being counted.

Despite the UK increasing its public spending faster than any other OECD country other than Ireland and Luxembourg, the UK is only expected to rise to 19th place by 2003.

TUC General Secretary, John Monks claims that the CSR makes New Labour the first Government to increase tax to fund a programme of planned investment, rather than a tax rise in response to a crisis or to correct a failure of economic policy, for over thirty years.

He also attacks the complaint that tax revenues will be swallowed up by inflationary public sector pay settlements. He argues that capital and current budgets are now quite separate and both are fixed within the overall “spending envelope” so that wages cannot rise at the expense of the capital investment programmes in new hospitals and schools.

For a copy of the TUC’s analysis of the Third CSR go to www.tuc.org.uk/csr3