The Trades Union Congress has warned the coalition Government to expect a “horrible” year in 2011 as anger grows over cuts to public service jobs and pensions.
In his New Year message to members, TUC general secretary Brendan Barber took the opportunity to attack cuts to benefits, particularly housing benefit, and the decision to increase VAT to 20 per cent.
He says: “Spending cuts inevitably hit those on low and middle incomes, while taxes – such as a Robin Hood Tax and real efforts to deal with tax avoidance – can be targeted on those who can afford to pay. Yet even the modest tax contribution chosen by the coalition is VAT, the least fair tax of all.”
Barber also expects rising public anger as jobs are lost in both the public and private sectors. He says: “2011 will be a horrible year. Unemployment will increase as thousands of public servants get made redundant. Just as many, if not more, private sector jobs will go, both as a direct result of the cuts and through the knock-on effects of reduced economic activity.”
This follows a warning from the Chartered Institute of Personnel and Development that unemployment could rise by 200,000 next year.
Aside from tax policy and cuts to public services, a key battleground for public sector unions will be Government plans to reform public service pensions. Lord John Hutton’s review will make its final recommendations before the Budget next year, with employee contributions expected to rise and final salary provision ditched.
However, some form of defined benefit provision could be retained, with the National Association of Pension Funds among others calling for benefits to be based on career average earnings.