Recommendations & Conclusions
8 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 …
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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 plan and invest themselves. This churn also makes it difficult to assess the success or otherwise of initiatives such as the Industrial Strategy in improving growth and productivity.
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Government response AI summary
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.
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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 …
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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 monitored carefully.
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Government response AI summary
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 the key supply side drivers …
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HM Treasury
8
Recommendation
Fourth Report - Jobs, growth and produc…
Acknowledged
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 …
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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 economic structure and geography.
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Government response AI summary
The government continues to monitor productivity growth and has announced a package to reform and invest in the key supply side drivers of productivity gains.
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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 …
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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 identifying and helping those sectors most adversely affected by changes in trade between the UK and EU, as well as more clearly identifying the economic opportunities that may arise from Brexit.
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Government response AI summary
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 EU law in key growth …
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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.
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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.
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Government response AI summary
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.
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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 …
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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 be important to persist with these schemes while taking feedback and adjusting them as necessary. That will require backing from the Treasury. If a success can be made of the schemes, there may be scope for expansion. It its response to this report, the Treasury should indicate whether funding will be available for longer than the three years first suggested in Budget 2021 and on what success criteria continued funding would depend. This is important, given the negative impacts and costs of repeated policy change.
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Government response AI summary
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.
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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, …
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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, and the Treasury should take on board the criticisms made of the super-deduction while designing 64 Jobs, growth and productivity after coronavirus future tax incentives. But wider economic certainty and coherence and stability in the Government’s growth policy, which are currently deficient, are also important for getting businesses to invest.
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Government response AI summary
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 to finance to invest.
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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 …
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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 inflation. The Government should be looking to prioritise addressing the gaps in the UK’s skills and taking steps to ease labour shortages.
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Government response AI summary
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 system provides the skills current …
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HM Treasury