BRITAIN has missed out on a mammoth £400 billion of economic growth during more than a decade of Tory rule, according to TUC research published today.

A toxic combination of tax breaks for the richest alongside cuts to public services and key worker pay has seen the country’s GDP fall well behind where economists in 2010 predicted it would be, the union body’s latest report said. 

The “doom loop is set to keep turning,” general secretary Paul Nowak warned, as ministers claim inflation-matching wage rises for public-sector workers are unaffordable, despite arguing unlimited bankers’ bonuses are needed to “attract the best talent.”

Downing Street must “end its damaging fixation with boosting the wealth of the rich at the cost of a strong economy with decent wage growth and improvement to living standards,” he demanded.

“Wage growth is the fuel in the tank that drives the economy. Businesses need customers with money to spend — that’s the only way our economy is going to grow sustainably.

“But since 2010, Conservative policies have held down wages year after year and ministers have given more and more in tax breaks to banks, corporations and high earners.

“The rich got richer, but living standards for everyone else fell.”

Mr Nowak urged a “fresh approach to the economy that restores economic power to working people.

“That is what will break us out of this doom loop of pay squeezes, low spending and low growth,” he said.

The TUC’s study examines the trend for weaker economic growth from 1979 onwards, when Margaret Thatcher came to power, compared to the post-WWII period of sustained growth in GDP, wages and living standards.

The damaging change coincided with policies which prioritised tax cuts for the richest, legislation to weaken workers’ bargaining power and declining corporate oversight, leading to widening gaps between rich and poor, it noted. 

Only a “shift in economic power from the wealthiest to workers will reinvigorate the economy and set it back towards a sustained path of stronger growth,” the report said.

“It’s time to return to the approach that worked so well for our grandparents,” Mr Nowak argued.

“Britain should once again go to our global partners with proposals for shared rules that protect and promote decent jobs in all countries.”