Government must do more to tackle the investment gap if we’re to make Brexit work
Leaving the EU has raised many significant questions for our economic future. We have to do all we can to protect jobs that may be at risk from this uncertainty. We have already seen hiring freezes and the Bank of England has predicted almost a quarter of a million jobs will go in 2017. The trade deal we secure will have a huge impact on investment and jobs but the government have the power to help now and have not yet stepped up.
The TUC campaigned for Remain because we believed that would deliver the best outcome for working people. Now the British people have spoken, we of course respect the result and have turned our attention to getting the best deal we can for Britain – and Britain’s workers.
While protecting jobs we must always consider their quality. We don’t need just any jobs – they must be good jobs: with decent rights and secure employment. People didn’t vote for us to undercut our European neighbours by slashing worker’s rights.
Even before the Brexit vote, UK investment was far too low. One of the big risks of Brexit is that the UK loses foreign investment. If we are to secure the growth we need outside of the EU, we must invest in the infrastructure we need to be competitive.
But now, the revelation that the UK has a massive investment gap with our competitors is deeply worrying.
Our new analysis has found that only two OECD countries have lower total capital investment than the UK – Greece and Iceland. UK capital investment was 16.4% of GDP, which falls significantly short of the OECD average of 21.6%.
Looking at government investment alone, the UK is in 25th place out of 29 OECD countries (2.7 % of GDP, behind the OECD average of 3.5%).
Both government and the private sector are behind the curve in terms of investment. But the imperative is really with the government to step up. Public investment can encourage private investment and in times of such uncertainty the government must instil confidence. Businesses also need high quality infrastructure, decent housing for their employees and a highly skilled workforce to thrive. Government has the power to give confidence to businesses who will then create jobs.
Right now the government simply isn’t providing the leadership we desperately need to protect the economy and workers. Heathrow is a classic example: an independent commission has said Heathrow is the way ahead, private investors are ready to spend tens of billions of pounds, which would bring 180,000 new jobs and demand for 10% of the steel production in the UK – but the government can’t make its mind up.
Beyond Heathrow, there is no shortage of projects in the public and private sector that are crying out for more investment: high speed broadband, high-speed rail, new council homes, low carbon power from the sun, wind and tides, and modern nuclear power plants. Everyone from the OECD to the IMF is saying that with the cost of borrowing for government at record lows, now is the perfect time for government to act.
By closing this investment gap – boosting our economy and providing more and better jobs, we can make sure that Britain’s working people have a chance to prosper outside the EU.