Spend £85bn on infrastructure now to avoid jobs collapse, TUC warns
More than one million jobs could be created in Britain in the next two years if the Government invests now in key infrastructure, according to a new report by the Trades Union Congress (TUC).
The union is urging the Chancellor to announce spending plans to avoid widescale unemployment as the furlough scheme comes to an end, but social distancing and the “new normal” continue.
Research by Transition Economics for the TUC said 1.24 million jobs could be created by 2022, including 40,000 in telecoms with upgrades to high-speed broadband and 38,000 jobs in decarbonising tech.
Rail network upgrades could create 120,000 new positions and half-a-million jobs for the electrification of buses, ferries and charging points for electric cars.
The report says it would cost £85 billion but would pay for itself by creating jobs across the economy and boosting growth and tax receipts.
Government borrowing is already at record highs and the Office for Budget Responsibility (OBR) estimates it will hit nearly £300 billion once all the costs of coronavirus interventions are included.
Chancellor Rishi Sunak is expected to make an economic announcement in early July on future spending commitments and how he intends to restart the economy after a recession expected to be the deepest in living memory.
The union body added that support must be made on a sector-by-sector basis, especially as the Government’s furlough scheme comes to an end in October.
Under-25s are also three times more like to work in sectors hardest hit – including hospitality and retail – and should have targeted spending on new training, the report said.
Ministers should follow the example of other countries and where necessary take equity stakes of up to 30% in struggling companies, it added.
Partial buyouts could also be contingent on fair pay plans, end excessive executive pay and improve corporate governance structures.
TUC general secretary Frances O’Grady said: “We need to work our way out of recession. Investing in infrastructure now will help to create jobs across the economy and limit the fallout from coronavirus. And it will stop the devastation of mass unemployment.
“We should lose no time getting shovels in the ground. Next month’s budget must be used to green-light spending on homes, faster broadband, better transport links and greener technology.
“Alongside investment in infrastructure to create great new jobs, we need a job guarantee scheme for young workers and rescue packages for badly hit sectors. And we need a new drive to ensure that the recession does not worsen existing labour market inequalities.
“The more people we can keep in work, the faster we’ll bounce back from this crisis.”
A Government spokesman said: “Infrastructure is central to our economic strategy. We have already set out £37 billion of economic and social infrastructure contracts to be brought to market over the next year through the National Infrastructure and Construction Procurement Pipeline.
“We’re investing more than ever before in modernising our railways and the UK has one of the biggest networks in the world for electric vehicles, and we have committed £5 billion to support the roll-out of gigabit broadband across the UK. We will continue to level up opportunity for both infrastructure access and employment across the country as we reopen the economy.”