GOVERNMENT pledges to rebalance the economy towards manufacturing is failing as the UK has become more dependent on financial services, the Trades Union Congress (TUC) has claimed.
The TUC’s latest economic report said that business and financial services grew by 0.8 per cent on last year, while manufacturing contracted 3.1 per cent over the same period.
The report added that the proportion of the economy accounted for by exports and investment is currently no better today than it was five years ago, at around 13 per cent.
The TUC has called on the government to take “bolder” steps to encourage rebalancing, including a more active industrial policy to support new industries, a state bank to improve the UK’s poor investment record and an end to “self-defeating” austerity that it claims is causing the gap in employment rates between the north and the south of the country to widen.
TUC general secretary Brendan Barber said: “Having seen the damage caused by our over-reliance on the City, everyone agrees that our economy needs to be better spread across industries and throughout the country.
“But so far progress has been woefully slow.”
He added that the economy “desperately” needs companies to invest the estimated £750 billion that is on their balance sheets.
“The government has a key role to play but has so far lacked the ideas and willing to make the bold reforms needed to rebalance our economy,” he said.
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