Frances O’Grady told a fringe meeting at the Conservative Party Conference in Manchester that parts of Britain are still recovering from the economic recessions of the 1980s.
The general secretary of the TUC also defended the rights of union members against calls to make it harder for strikes to be called, arguing efforts should be focused on tackling the causes of workers’ discontent.
Speaking at the event organised by the Bright Blue thinktank, Ms O’Grady said: “We need a good industrial strategy for Britain.
“We need to recognise what we’re good at, what we can improve on and we need to tackle those longrunning problems of low investment - Britain in the bottom three alongside Portugal and Greece for capital investment.
“We need to make sure there is proper workforce engagement in developing the kind of strategy that delivers the jobs to the parts of Britain that need them most.
“People in this room understand there are parts of Britain who still feel they haven’t recovered from the unemployment and recession of the eighties nevermind what’s been happening over the past decade.”
Ms O’Grady also argued the Government’s tentative relaxation of its cap on public sector pay rises has not gone far enough.
She said: “We have got to get wages rising.
“Critically, what a great place to start it would be if the public sector pay cap was scrapped.”
The Conservative-Liberal Democrat coaltion and its Conservative successors have looked to help lower-earning families by raising the amount workers can earn before they start paying income tax.
Bright Blue director Ryan Shorthouse said: “If you keep raising that, the gains become less targeted, the winners from that are people on higher incomes not low earners.
“I think instead of doing that now we should be focusing on raising employees’ national insurance which kicks in at a much lower rate but also some of the cuts to in-work support, tax credits and universal credit, are disproportionate and unnecessary and they are causing a real bite on people with very low incomes.”