WEU Comments on Philip Hammond’s Investment Programme

“The Workers of England Union campaigns for the abolition of the Barnett Formula because it leaves the English taxpayer financially worse off. This week’s announcement by the UK Chancellor of investment in English roads and infrastructure will see the English taxpayer paying off the SNP government again due to Barnett consequentials.

Key Points on Barnett Formula Consequentials

The House of Lords report from 2009 was clear that the English taxpayer finances the UK. Each year, surplus money amounting to £10 billion goes to Scotland:

• Heathrow expansion under Barnett consequentials gives the SNP at least £500 million of English taxes.
• For every £10 billion spent in England on capital projects, a further £1 billion must be given to Scotland.
• Mr Hammond has revealed that £1.3 billion of road improvements will generate a Barnett Formula consequential of around £130 million for the Scottish Government.

— Stephen Morris
General Secretary
Workers of England Union

UK Investment in Tech and Transport Among World’s Worst, Says TUC

Phillip Inman, Economics correspondent, The Guardian

Wednesday 16 November

Britain ranks among the worst performers in the developed world for spending on new technology, industrial machinery and transport equipment, according to a study by the TUC of investment spending in the public and private sectors.

The UK came 34th out of the 34 members of the Organisation for Economic Cooperation & Development (OECD) for spending on transport equipment. It also ranks near the bottom in other categories:

• 20th out of 21 countries for IT systems investment.
• 23rd out of 27 countries for other types of machinery.

The report helps explain why the UK’s productivity rate has failed to recover since the 2008 crash and puts pressure on the chancellor, Philip Hammond, to boost spending in the autumn statement.

Government Response and Expert Advice

Hammond is expected to use his parliamentary statement to highlight the UK’s low productivity, which many analysts blame on reluctance by businesses to invest while the economic outlook remains uncertain. Despite acknowledging “low borrowing costs” and urging investment in “productivity-enhancing infrastructure,” he has emphasised incentives such as tax allowances rather than direct public spending.

The OECD and IMF have urged the UK to increase investment, arguing it can boost digital infrastructure, skills training and economic resilience. TUC General Secretary Frances O’Grady warned:

“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.”

Comparative OECD Capital Investment

In 2014, UK capital investment was 16.6% of GDP—below the OECD average of 20.8%. Only Greece and Portugal invested less, leaving the UK 33rd out of 35 countries. The sole area where the UK led the OECD average was in intellectual property, ranking 13th of 34 countries.

Frances O’Grady concluded: “We need investment in rail and roads, new homes and clean energy, and skills, education and fair pay for a world-class workforce. It’s the best way to build an economy strong enough to compete in the global marketplace.”