LABOUR must urgently end short-termism and deliver an investment boost and a long-term plan for economic renewal, the TUC says in its Budget submission today.

The union federation called on the new government to give an Industrial Strategy Council the remit and resources to provide oversight and accountability on an “ambitious industrial strategy, acting as a critical friend of government.”

This, alongside proposals for a closer trading relationship with the EU, based on mutual high standards of employment rights and environmental protections, would provide “much-needed certainty for workers, businesses and investors,” it said.

TUC general secretary Paul Nowak said: “In the last 14 years, our economy has been like a rudderless ship. There was no drive or direction from Conservative government, just managed decline.

“But after years of underinvestment, Britain has tremendous pent-up potential. Labour plans to invest in Britain can unleash this potential to create a new era of growth.

“Everyone can see the problems holding us back — skills shortages, NHS waiting lists, lack of childcare, expensive energy imports. Families and businesses must be freed from these constraints.

“Investment alone is not enough — a long-term industrial strategy is important too. Our investment must deliver profit with purpose — better jobs, higher living standards, clean energy, decent homes and UK industry that can compete with the world.”

The TUC’s submission argues an urgent need for change to fix the foundations of the British economy and deal with major challenges ahead after years of stagnant growth, underinvestment, falling living standards and broken public services.

This includes fairer taxes, so that income derived from wealth is no longer taxed at lower rates than incomes made from work.

The federation also calls for the full implementation of government’s plan to Make Work Pay; a Public Sector Workforce Commission to tackle the key challenges facing the public-sector workforce;  and a fair pay setting in the public sector.

It says that both the government and Office for Budgetary Responsibility “must learn” from the growing body of international evidence that shows that public investment attracts significant private investment.

A TUC spokesman said: “The Treasury should amend fiscal rules in line with common European practice so that funds invested in productive assets like Great British Energy and the National Wealth Fund are kept off the balance sheet for public debt.”