Unions urge more investment growth
Union leaders have pressed the Government to do more to encourage business investment after warning that wage-led economic growth is unlikely to happen for years.
The TUC said the prospects for a boom in consumer spending were not looking good because wages had fallen for the past two years while household debts were rising.
Strong wage growth was the best way to boost consumer spending, said the TUC, adding that business investment should be the main driver of economic growth.
The union organisation's economic report said UK companies held a "cash pile" of £724 billion, equivalent to half the size of the economy.
The Chancellor was urged to announce greater incentives for companies to invest when he unveils his Budget later this month.
TUC general secretary Brendan Barber said: "Consumer spending has got the UK out of its last two recessions, but with real wages still falling and the tax burden rising, the prospect of a spending boom fuelled by anything other than increasing household debt is looking unlikely.
"The Chancellor's austerity measures have restricted any direct Government help in boosting growth. This strategy is self-defeating and should be reversed, but we also need businesses to lead our recovery. Their £724 billion cash pile is an obvious place to start.
"Companies need confidence and incentives to invest their cash. The Chancellor must do all he can in his upcoming Budget to encourage this. Clear proposals on credit easing, a far more ambitious Green Investment Bank and recognising that public investment cuts are self-defeating must be at the centre of the Government's plan for growth."