The IPPR calls for action as “it’s time for the UK to get over its investment phobia”
According to The Progressive Policy Think Tank (IPPR), with public investment well below the G7 average and business investment at the bottom of the league, the UK has little hope of breaking out of its growth doom loop without sustained investment.
According to The Progressive Policy Think Tank (IPPR), with public investment well below the G7 average and business investment at the bottom of the league, the UK has little hope of breaking out of its growth doom loop without sustained investment.
According to IPPR, if the economy is the engine of a country, investment is its fuel. But the UK’s tank is running on empty and it’s harming economic growth, driving inequality, and slowing the pathway to net zero and energy security.
Investment – by private companies and by the government – is critical to economic growth as it funds the physical equipment or the intangible software and training that are critical to producing goods and services and doing so more efficiently. IPPR claims investment is core to the creation of good-quality, well-paid jobs, driving innovation and technological progress, and economic stability.
The UK has suffered decades of under-investment. The UK consistently ranks the lowest in the G7 and among the worst performers in the OECD club of 37 developed economies, and is worse off than its competitors as a result.
Most urgently, the lack of investment in green technologies is delaying the progress towards decarbonising UK’s economy. This lack of action to spur makes it less likely that the UK will capture the economic up-side; the domestic production in the industries of tomorrow. Green industries could be worth $10.3 trillion to the global economy by 2050 (5.2 per cent of global GDP) – now is the time to begin that investment if the UK wants a share of that prosperity and the jobs it will create.
Public investment is low and has never been above average for the OECD or the G7. If the public sector had been similarly average in the G7 over the same period, the British government would have invested an additional £208.4 billion in real terms. Combining public and private investment, this would total an additional £562.7 billion, or over half a trillion pounds over 16 years in real terms. For comparison, this would be 14 times the investment needed to build Northern Powerhouse Rail or HS3 (estimated cost £39 billion), or 30 times the cost of the Elizabeth Line (cost £18.8 billion).
IPPR claim there’s an urgency to break the doom loop of poor investment and poor growth. As a global race to the top on capturing the green industries of tomorrow kicks off around the world the UK needs to act now.
Find out more here.
