By Maximilian Clarke

Ahead of tomorrow’s (Tuesday) Autumn Statement, the Trades Union Congress (TUC) have outlined an alternative budget calling for a Keynesian approach to growth in which the deficit reduction agenda is slowed, allowing for more government investment in growth.

The TUC believes that the government's unprecedented programme of spending cuts is reducing demand, slowing growth and exacerbating the squeeze on living standards. An urgent stimulus is needed before the UK's stagnant economy slips into a double-dip recession, says the TUC.

“We urgently need a plan B to get people back into work and the economy back on its feet,” said the TUC’s chief, Brenden Barber. “The government must change course now and bring in immediate measures to support jobs and promote growth.”

The 10 suggestions are as follows:

• Making quantitative easing work for the economy: Channelling money directly to firms which could then use that investment to expand, either through purchases of corporate bonds or through a new government-owned investment vehicle.
• Reversing the VAT cut: This would lower inflation and raise wages, putting money in the pockets of those most likely to spend it and providing a much needed boost to consumer spending.
• Raising capital allowances: Increasing capital allowances would encourage businesses to focus on the long-term and increase investment, contributing to domestic demand.
• Investing in apprentices and young people: There needs to be a replacement for the Future Jobs Fund, measures to support the creation of apprenticeships and a government commitment that no unemployed young person will spend more than six months out of employment or training.
• Investing in energy-intensive industries: The TUC and employers are calling on the government to copy industrial policy support that competitor countries such as Germany give to their energy-intensive industries. Immediate proposals include relief from the carbon tax from April 2013 for those industries most at risk and providing finance for new technology.
• Using procurement to support the economy: Procurement contracts should include clauses that guarantee apprenticeships, that require companies to meet the contract in an environmentally sustainable fashion and - where appropriate - that provide job opportunities for those who find it particularly hard to enter the labour market. Important procurement contracts should be brought forward.
• Protecting the science budget: Investment in science and engineering gives historically proven benefits to society, in both the short and long terms.
• Reversing the cut in support for the solar power feed-in tariff: The jobs of many of the 25,000 people now working in the UK solar power industry are at risk if the government continues with plans to halve the feed-in tariff from December. The decision to cut the tariff should be cancelled until the government has negotiated a new rate with the industry and unions that will secure current jobs and deliver real growth in jobs and investment.
• Reversing the public sector wage freeze: Recent research by Incomes Data Services (IDS) found that the median settlement for private sector pay deals in the three months to the end of September was 2.6 per cent - still far short of what is needed to keep pace with living costs - but the median in the public sector remained at zero. The combined effect of the pay freeze, VAT increase and high inflation has meant a huge squeeze on the spending power of public sector workers.
• Introducing a one-off increase in child benefit: A one-off child benefit boost would give families across the UK some welcome relief in the run up to Christmas, almost guaranteeing that money would go directly back into the economy. Child benefit is paid weekly to households across the UK, which means that the system to give Britain's families a Christmas bonus is already in place.

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