A rebalancing programme for Britain: Ending austerity in the UK

Article

The rate of economic growth in the UK has fallen noticeably in recent decades. Economic growth since 2000 has averaged under 2 per cent per annum, and this poor growth rate looks set to continue for the foreseeable future. Worse, that meagre growth which does exist is unevenly distributed, with the result that living standards for many have stagnated and in-work poverty has increased.

At the heart of the UK’s low economic growth is low investment and low productivity. Investment as a percentage of the UK economy is significantly below that of any other G7 country. Investment in productive capacity has fallen from 3.6 per cent of gross domestic product (GDP) in 2008 to 2.7 per cent in 2017. Productivity growth over the 10 years to December 2017 is thought to have been the lowest since the 1820s on a rolling 10-year basis.

Our thesis is that a sustained improvement in productivity growth, and an increase in investment by both private and public sector, is the key to increasing the trend rate of growth.

There is no single solution. What is needed is the consistent adoption over a long period of a set of policies which, taken together, can correct the imbalances which create a low-growth environment, and in so doing revolutionise the UK economy.

Related items

  1. Small tent on the pavement of the city street in London, UK, with a homeless person sleeping inside

    Home truths: Housing-led approaches to homelessness

    Nationally, there is a lack of political urgency in reducing homelessness. 
  2. People walking in Oxford street, London

    The democratic citizen: Renewing citizenship and the public domain

    Britain’s debate about ‘citizenship’ has narrowed to a question of the boundaries of our national community.
  3. A form with the title 'UK Visa Application' sits on a desk next to a passport in a union jack cover

    The British business investment visa: A new model for investment migration in the UK

     We recommend a new approach to investment migration in the UK focussed on maximising economic benefits and minimising the risks of abuse.