The threat of mass unemployment will only be reduced if the chancellor agrees to a further £23bn investment in the economy in next week’s Budget, a leading think-tank has warned.
The Work Foundation has urged the government to make the ‘Budget for jobs’ a reality by injecting a new stimulus package, despite the high levels of public borrowing and rising deficits. The money could be used to invest in new infrastructure projects to create jobs, a short-time working scheme to help employers reduce hours while retain staff and to create more public sector employment.
The call echoes the TUC’s Budget submission, which earlier this month outlined how £25bn of public investment would kick start jobs and growth.
David Coats, associate director of policy at the Work Foundation, said the case for further fiscal boost was “compelling”. He said: “Now, when unemployment is rising fast and many businesses are struggling, is absolutely not the time for the government to be thinking about cutting back.”
He said increasing public debt, which chancellor Alistair Darling earlier this month admitted would reach nearly £175bn over the next two years and account for 48% of national income next year, was caused by the economic slowdown, not high expenditure.
“Judged by international standards, the level of public debt in the UK remains well below that of other leading nations. So far the measures taken to stimulate the UK economy look very modest alongside the scale of intervention elsewhere, while even the International Monetary Fund has made it clear that the scale of the crisis demands decisive action,” Coats added.