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New analysis published today (Wednesday) by the TUC reveals that the UK ranks towards the bottom of OECD countries for capital investment in important areas of economic development.

16 November 2016

- UK comes in last place for transport infrastructure investment, and second last for ICT

- ‘Great British Investment Plan’ needed to make a success of Brexit, says TUC

New analysis published today (Wednesday) by the TUC reveals that the UK ranks towards the bottom of OECD countries for capital investment in important areas of economic development.

Worst of all is transport. As a percentage of 2014 GDP (the latest figures), UK investment was the lowest in the OECD, ranking in last place out of 34 countries.

The UK also ranks second to last (20th out of 21 countries for which data is available) in the critical area of information and communications technology (ICT) equipment; and 23rd out of 27 countries for investment in other machinery and equipment.

The UK performs a little less badly in dwellings investment and other buildings and structures. But even in these sectors, the UK is still well below the OECD average.

The only area where the UK is ahead of the OECD average is in intellectual property, ranking 13th of 34 countries.

In total, UK capital investment was 16.6% of GDP in 2014, while the average across all OECD countries was 20.8%. On this basis the UK is in third to last place, ranking 33rd out of 35 countries, with only Greece and Portugal investing less.

Alongside the analysis, the TUC is today publishing its full Autumn Statement submission to the Treasury (for the TUC’s main demands and the full submission, see notes below).

The submission argues that investment in infrastructure and public services is vital for protecting the economy from the uncertainty caused by Brexit. And it will also be needed for Britain to build an economy strong enough to compete in the global marketplace once the UK has left the EU.

TUC General Secretary Frances O’Grady said:

“We can’t just waltz into Brexit with our fingers crossed. If the government doesn’t invest in Britain it could go very badly wrong. And working people will pay the price with fewer jobs, lower wages and higher prices.

“But if the government invests in Britain, we can build an economy strong enough to thrive.

“We need investment in rail and roads. We need investment in new homes and clean energy. And we need investment in skills, education and fair pay for a world-class workforce.

“It’s the right thing to do for better jobs and higher wages. And it’s the best way to build an economy strong enough to compete in the global marketplace.

“So let’s see it happen in the Autumn Statement – come on Chancellor, step up to the mark with a Great British Investment Plan.”

ENDS

Notes to Editors:
- TUC Autumn Statement submission: The TUC’s principal demands for the Autumn Statement are:

  1. Set out a plan for a post-Brexit deal that protects workers jobs and rights.

The TUC believes this would best be achieved by remaining within the single market.

  1. Invest to keep the economy moving.

Announce a significant and sustained programme of infrastructure spending, with a focus on regional investment. This must include action to improve the connectivity of the UK economy through transport and broadband improvements. And it should include measures to tackle the UK housing crisis, and to help meet our climate change commitments.

  1. Reform the economy for the long term.

Set out plans to give workers the right to representation on company boards. And bring forward an industrial strategy to deliver better jobs across the country.

  1. Give Britain a pay boost.

Lift the public sector pay cap, and announce an increase in the National Living Wage that keeps it on course to hit 60 per cent of median earnings by 2020.

  1. Ensure workers can realise their rights.

Abolish employment tribunal fees of up to £1,200 a month which have seen claims fall by 9,000 a month and are pricing workers out of justice.

- The full TUC Autumn Statement submission is here: www.tuc.org.uk/AS16

- UK capital investment and OECD average by sector, 2014

Sector

UK investment, %GDP

Average OECD investment, %GDP

UK country ranking*

Total gross fixed capital formation

16.6

20.8

33/35

of which:

     

  Transport equipment

0.6

2.1

34/34

  ICT equipment, SNA08

0.4

0.9

20/21

  Other machinery and equipment and weapon systems

2.8

4.2

23/27

  Other buildings and structures

5.5

6.6

21/34

  Dwellings

3.6

4.2

20/35

  Intellectual property product

3.7

3.4

13/34

* The total number of countries for ranking in each sector varies due to comparable data not always being available.

­- Note on method: The analysis is based on OECD figures for capital investment as a share of GDP, available on their Annual National Accounts database (http://stats.oecd.org/). Investment by asset and GDP are taken from Table 1: Gross domestic product. ‘Investment’ corresponds to ‘gross fixed capital formation’ (System of National Accounts code ‘P5’).  The ratios are derived from cash estimates in national currencies for 2014, which is the most recent year that has figures available for all countries, though a number of countries do not produce figures for some asset classes.

- Detailed data: Please contact the TUC press office to request more detailed data and comparison charts on all the OECD countries in the comparisons.

- OECD case for higher investment: The OECD has put the economic case for greater public investment, saying in their February 2016 interim Economic Outlook: “Investment spending has a high-multiplier, while quality infrastructure projects would help to support future growth, making up for the shortfall in investment following the cuts imposed across advanced countries in recent years.”

- All TUC press releases can be found at tuc.org.uk/media

- TUC Press Office on Twitter: @tucnews

Contacts:
Press Office  T: 020 7467 1248  E: media@tuc.org.uk
Tim Nichols  T: 020 7467 1388  M: 07808 761844  E: tnichols@tuc.org.uk
Elly Gibson (Mon to Thurs) T: 020 7467 1337  M: 07900 910624  E: egibson@tuc.org.uk
Michael Pidgeon  T: 020 7467 1372  M: 07717 531150  E: mpidgeon@tuc.org.uk