Recommendations & Conclusions
17 items
1
Conclusion
Fourth Report - Jobs, growth and produc…
Acknowledged
Witnesses were mostly unpersuaded by the Government’s arguments for the abolition of the Industrial Strategy and its replacement with the Plan for Growth. More importantly, we are particularly concerned at the ‘chop and change’ and lack of long-termism in growth strategy and policy, without which businesses themselves are unable to …
Government response. The government states that the Plan for Growth is an overarching framework supporting a whole-Government approach to delivering long-term growth, with departments reporting progress quarterly.
HM Treasury
2
Conclusion
Fourth Report - Jobs, growth and produc…
Accepted
Although witnesses were generally in agreement with the broad aims and priorities in the Plan for Growth, there was some dissatisfaction in both written and oral evidence with other aspects. It was suggested that there was a lack of detail and a lack of collaboration with businesses and regional bodies, …
Government response. The government states that the Plan for Growth is an overarching framework which helps to support a whole-Government approach to delivering long-term growth, and outlines processes already in place.
HM Treasury
3
Conclusion
Fourth Report - Jobs, growth and produc…
We are concerned at the abolition of, and the lack of a replacement for, the Industrial Strategy Council, which provided oversight and evaluation of the Government’s growth strategy, and a suite of detailed metrics against which to judge the success of growth policies. The Council was a force for consistency …
Government response. This section is addressing recommendations in paragraph 44 and 45 on making the Plan for Growth a successor to the Industrial Strategy, coordinating growth strategy across government, taking feedback and monitoring results to measure success. The Plan for Growth, while …
HM Treasury
4
Conclusion
Fourth Report - Jobs, growth and produc…
Accepted
The Government as a whole is spending a large amount of money and time on devising growth strategies and policies. It is important to have a robust, overarching strategy for this that drives co-ordination across departments. This function may well sit best in the Treasury. However, it is unclear to …
Government response. The government states that the Plan for Growth is an overarching framework which helps to support a whole-Government approach to delivering long-term growth, and outlines processes already in place.
HM Treasury
5
Recommendation
Fourth Report - Jobs, growth and produc…
Accepted
In its response to this Report, the Treasury should set out how it is making the Plan for Growth an effective successor to the Industrial Strategy, given that it is not taking on additional resources for this purpose, and in particular the steps it is taking to ensure co-operation across …
Government response. The government states that the Plan for Growth is an overarching framework which helps to support a whole-Government approach to delivering long-term growth, and outlines processes already in place.
HM Treasury
6
Conclusion
Fourth Report - Jobs, growth and produc…
We do not believe that the Plan for Growth should necessarily be discontinued, let alone the Industrial Strategy revived, as another wholesale change in policy would exacerbate the lack of long termism and consistency in policymaking. Nonetheless, there needs to be a renewed effort at a co-ordinated growth strategy across …
Government response. The Plan for Growth, while led by HM Treasury, is an overarching framework which helps to support a whole-Government approach to delivering long-term growth. The Plan for Growth is supported by a family of strategies, such as the ‘National Infrastructure …
HM Treasury
7
Conclusion
Fourth Report - Jobs, growth and produc…
Acknowledged
Post-pandemic scarring seems likely to be much less of a problem than first feared. But there are still risks, especially outside the labour market, that need Government attention. Notably, these include the long-term legacy of interruptions to education. Business indebtedness might also be a factor restraining investment and should be …
Government response. The government acknowledges that productivity growth has slowed and is monitoring issues exacerbated by the pandemic, such as business indebtedness and individuals withdrawing from the labour market, and states that it has announced a package to reform and invest in …
HM Treasury
8
Recommendation
Fourth Report - Jobs, growth and produc…
There are productivity-enhancing opportunities arising from the pandemic, in an increased take up of digital technologies and in remote working in certain circumstances. The Government should be looking at how it can facilitate these positive developments, while also being mindful of the challenges it could present to the UK’s existing …
Government response. This section is addressing recommendations in paragraph 65, 72, 92 and 100 on productivity enhancing opportunities and challenges after Coronavirus; addressing the investment shortfall through tax incentives and policy certainty; economic opportunities as a result of Brexit and supporting firms …
HM Treasury
9
Recommendation
Fourth Report - Jobs, growth and produc…
Acknowledged
Brexit has not been a major focus of this particular inquiry. Nonetheless, it will clearly have a profound impact on the economy’s future direction and growth prospects, potentially greater than the long-term effect of the pandemic. In its response to this report, the Treasury should explain how growth policy is …
Government response. The government acknowledged the need to explain how growth policy is identifying and helping sectors most adversely affected by changes in trade between the UK and EU. The Autumn Statement announced that the government will move rapidly to review retained …
HM Treasury
10
Conclusion
Fourth Report - Jobs, growth and produc…
Acknowledged
A consistent theme in this inquiry was that a significant part of the UK’s productivity shortfall compared to other countries is due to a ‘long tail’ of low-productivity firms, usually small ones. Relatively poor digital technology adoption and management skills were seen as key interlocking causes.
Government response. The government acknowledges the importance of productivity and has announced a package to reform and invest in the key supply side drivers of productivity gains, including infrastructure and investment.
HM Treasury
11
Recommendation
Fourth Report - Jobs, growth and produc…
Acknowledged
Help to Grow: Management and Help to Grow: Digital are promising responses to the problems of relatively poor digital technology adoption and management skills among businesses, but there have been some difficulties in the early days of the schemes. Considering the importance of long-term stability in growth policy, it will …
Government response. The government acknowledged the importance of long-term stability in growth policy. They stated they are committed to helping small businesses and are rebalancing the rates of the reliefs to ensure cutting-edge, innovative firms have access to finance to invest.
HM Treasury
12
Conclusion
Fourth Report - Jobs, growth and produc…
Acknowledged
The Chancellor is correct to pinpoint business investment as a component of the UK’s shortfall in productivity compared to other major advanced economies. The UK’s record in this area has worsened since 2016. In addressing this investment shortfall the Chancellor’s focus on reforms to tax incentives is a good start, …
Government response. The government acknowledged the importance of addressing the investment shortfall through tax incentives and policy certainty and stated they are committed to helping small businesses and are rebalancing the rates of the reliefs to ensure cutting-edge, innovative firms have access …
HM Treasury
13
Conclusion
Fourth Report - Jobs, growth and produc…
Accepted
The target to spend 2.4 per cent of GDP on research and development (R&D) is an important aspect of growth policy. We re-iterate our disappointment over the pushing-back of the target to spend £22 billion of public money on R&D and continue to warn against any further slippage. (Paragraph 105) …
Government response. Government spending on R&D will increase to £20 billion a year by 2024–25, a cash increase of around a third compared to 2021–22.
HM Treasury
14
Recommendation
Fourth Report - Jobs, growth and produc…
Deferred
The Treasury has allocated significant and welcome resources to initiatives to help people who are seeking work gain employment. However, a more urgent problem now seems to be becoming clear in the sharp fall in the number of people looking for work, compared to pre-pandemic trends. This is harming economic …
Government response. To understand what action should be taken as a result of the rise in economic inactivity, the Department for Work and Pensions will thoroughly review workforce participation concluding in early 2023.
HM Treasury
15
Recommendation
Fourth Report - Jobs, growth and produc…
Acknowledged
The Prime Minister has suggested that labour shortages should not be resolved through immigration, as part of a drive for a high-wage economy. At most, some witnesses to our inquiry thought this could have a small effect on wages. Moreover, labour and skills scarcity could hold back growth and stoke …
Government response. The government acknowledges the need to address gaps in the UK's skills and ease labor shortages, but emphasizes that immigration will not be the long-term solution and reform within industry is vital. They are taking steps to ensure the education …
HM Treasury
16
Recommendation
Fourth Report - Jobs, growth and produc…
Rejected
We have received a large number of proposals for reform of the Apprentice Levy in England. A full review is needed, and the Treasury should confirm that it is going ahead with such a review. (Paragraph 132) Macroeconomic policy
Government response. The government stated there will not be a formal review of the Apprenticeship Levy or system at this time.
HM Treasury
17
Conclusion
Fourth Report - Jobs, growth and produc…
Not Addressed
The key points made by witnesses on macroeconomic policy issues were: • Global energy prices and supply chain disruptions arising from the pandemic are the main factors behind the outbreak of inflation. But second-round effects, in the form of inflation expectations among the public, and domestic factors in the UK, …
Government response. The government provides context on the economic situation since the report was published including the impact of global challenges, Putin's invasion of Ukraine, and high energy prices. It notes the high rate of inflation and deteriorating economic outlook.
HM Treasury