TUC issues call to avoid “despair of mass unemployment” with a plan to work our way out of recession

The TUC has today (Wednesday) set out how the UK can recover from the coronavirus economic crisis, stop the despair of mass unemployment and set working families on a path to prosperity.

Alongside the report, the TUC publishes analysis showing that the fastest recoveries from economic crises in UK history were based on investment for growth, not cuts to services, deregulation and tax breaks for millionaires and bosses.

75 years on from VE Day, the UK should emulate the post-war recovery  

TUC analysis shows that the decade of investment for growth (1947-57) that followed World WarTwo achieved an average growth rate of 3.3% But the decade of cuts (2009-19) that followed the bankers’ crisis achieved average growth of just 1.9%.

These examples are part of a wider pattern for the UK’s responses to economic crises over the last century. The UK recovers better and faster when the approach is investment for growth, prioritising workers’ wages, strong public services, a decent safety net and building the capacity of both private and public sectors.

Approaches based on cuts to spending only serve to hold back the whole economy. This can be seen not only during 2009-2019, but also during 1921-31, when severe cuts meant growth averaged just1.9%.

In both 1921-1931 and 2009-2019, slow growth led to higher national debt. By contrast, periods of recovery based on investment for growth have reduced national debt, because they are successful at generating broad growth and making the country wealthier.

A plan to get Britain growing out of the crisis – and stop mass unemployment  

The pandemic alone did not cause this economic crisis. It was made worse by a decade of austerity and failure to strengthen the UK’s economy. Choosing the wrong approach to recovery now risks embedding low growth, long-term unemployment and all the social ills that go alongside.

An investment for growth approach means taking action on six key areas:

  1. Decent work and a new way of doing business: New business models based on fairer employment relationships. A fairer share for workers of the wealth they create, with a higher minimum wage and new collective bargaining rights.
  1. Sustainable industry: Economic stimulus for a just transition to net zero carbon. Rebuilding the UK’s industrial capacity with modern tech and training in new skills.
  1. A real safety net: Reforms to social security to provide help faster and prevent poverty. A job guarantee scheme so everyone can work and long-term unemployment does not take hold.
  1. Rebuilding public services: Bringing our public services back to full strength, with decent pay for those who looked after us in the crisis, and a new focus on good jobs and direct employment in social care.
  1. Equality at work: Specific actions to make sure women, disabled people and BME groups do not suffer disproportionately from the impact of the coronavirus recession.
  1. International solidarity: New international rules must prioritise decent jobs and public services for all.

The evidence from the post-war recovery is that this investment for growth recovery plan can pay for itself. Millions of working families with higher disposable income create the economic demand needed for strong growth and healthy public finances. Stronger public services and an effective safety net will support people to start and grow businesses, and will better protect against a future pandemic.

TUC General Secretary Frances O’Grady said:

“The UK’s weak economy and ten years of cuts left our country unprepared for coronavirus. Only the dedication of millions of individual workers kept our country going.

“Let’s learn the lesson. Together, we can work our way safely out of this recession. Let’s make sure everyone has a decent job, with fair pay and security for their family. Let’s thank our key workers with the pay rise they have earned. And let’s not consign millions of our fellow citizens to the despair of unemployment.

“Today the TUC publishes our plan for recovery. At its heart is good jobs. Jobs in a reborn UK manufacturing sector. Jobs in a social care sector finally getting some respect. Jobs in the green tech of the future. Let’s rebuild our country through hard work, determination and investment in all our futures – not cuts to spending, deregulation and tax breaks for millionaires and bosses.”

She added:

“Seventy-five years ago, Britain was bloodied, battered – and broke. Yet after the war Britain’s economy grew faster than ever before. We did it not by pay freezes and cuts, but making the priority decent jobs for everyone, new homes, infrastructure and a new national health service.

“So let’s channel the spirit of 1945. Coronavirus doesn’t have to equal mass unemployment and a poorer, meaner country. We can do what the post-war generation did: grow our way out of this crisis and build a better life for everyone.”


– TUC analysis: UK economic recoveries over the last century, ranked from strongest to weakest

Annual average Percentage points of GDP
Rank Decade GDP growth, % Of which governmentexpenditure, ppts Public debt at start of decade Change in public debt
1 1931-41 4.5 9.9 181 -21
2 1947-57 3.3 0.5 244 -123
3 1991-2001 2.9 0.3 23 +6
4 1981-91 2.9 0.2 43 -19
5 1975-85 2.3 0.2 54 -15
6 1921-31 1.9 0.0 160 +20
7 2009-19 1.9 0.2 59 +22

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