Updated Nov 2016
The 2008 financial crisis and subsequent recession exposed serious systemic weaknesses in the UK economy.
While, as a whole, the country has returned to growth and unemployment has fallen, not nearly enough has been done to fix these deeply ingrained problems. The UK continues to rely too heavily on private consumption for growth; productivity growth is weak; and there hasn’t been a trade surplus for a generation.
As the UK negotiates the terms of Brexit, the country is presented with a unique opportunity to reshape the economy and build it around long term, progressive principles. IPPR will launch the Commission on Economic Justice in November 2016; It will assemble leading thinkers define the long-term vision for the UK economy, and to develop specific policy proposals to boost the rate of growth and ensure that gains are justly and broadly shared across all regions and households in the UK.
The UK should rethink its approach to boosting productivity across the economy
If the UK economy is to become more productive, the government needs to think beyond the high-value added manufacturing that has been the focus of business policy in recent years, and consider how to ensure the country’s biggest employers – such as those in retail – change their business practices and better-utilise the skills of their workforces.
The UK should devolve fiscal powers to cities and combined authorities
Political decisions about investment priorities should be made at a local level wherever possible. This allows local areas to develop new and existing industries that are suited to their geography and the local pool of talent. Enabling regional specialisms would also help to diversify the UK’s export base as a whole, strengthening the economy overall.
Devolved finance raising powers would allow local areas to invest and to attract foreign investment. More freedom for local authorities to pool resources and borrow and powers over areas such as skills and education would also help them to achieve much more over time, and as a result make a more balanced contribution to the UK economy overall.