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UK 'near bottom of league for investing in housing, transport and industry'

Published 11/09/2016

It took Sir Martin Sorrell of WPP less than 45 minutes to earn what an average worker receives in a year, said the TUC
It took Sir Martin Sorrell of WPP less than 45 minutes to earn what an average worker receives in a year, said the TUC

The UK is near the bottom of leading countries for investing in housing, transport and industry at a time of growing uncertainty for jobs following the EU referendum result, says the TUC.

A study by the union organisation of 35 OECD countries revealed that only Greece and Iceland had lower levels of capital investment than the UK.

The research covered spending on industrial plants, machinery, transport, buildings and housing, and showed the urgency of government action on projects such as a new airport runway in Southern England, high-speed rail and a huge expansion in housebuilding, said the TUC.

General secretary Frances O'Grady said Government investment encouraged private sector spending, which was urgently needed at a time of uncertainty post Brexit.

"We are getting reports of job freezes and investment decisions being put on hold," she told a press conference ahead of the start of the TUC Congress in Brighton.

She repeated her call for unions to be involved in negotiations over the UK's exit from the EU, to make sure workers' rights are protected.

"We don't want more zero hours contracts. Britain must not become the bargain basement of Europe," she said.

"Even before Brexit, investment in the UK was low and there is now concern about losing further investment. We have to invest in infrastructure in order to compete.

"Businesses want to locate where there is high quality infrastructure, decent housing for employees and highly skilled workers."

Ms O'Grady said there was no shortage of projects which should be built, saying 180,000 jobs could be created, and steel plants secured if the Government gave the go ahead for a third runway to be built at Heathrow.

The TUC said that in the wake of the EU vote it was more urgent that the UK's "investment gap" should be closed. Its report said that private investment in the UK was 13.7% of GDP (economic output), compared with the OECD average of 17.6%.

A Treasury spokesman said: "Since 2010 the Government has reformed the tax system to encourage firms to invest, including cutting capital gains tax, reducing corporation tax and raising investment allowances.

"We are playing our part too, and will invest over £100 billion in infrastructure by the end of the Parliament, including the largest increase in transport spending in generations, up 50% to £61 billion which will see Crossrail add capacity in London and rail lines upgraded in the North West."

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