NEW: Today we release the results of the @britishprogress Growth Survey. We asked over 100 economists and experts what the Government needs to do to fix productivity and drive growth. Here’s what they said: 🧵
As covered by @TomHCalver @thetimes today, the Government has pinned its hopes on growth. But what really makes it happen? We asked the experts...
1. Where should the Government spend its political capital? Change can mean taking on interest groups and risk some backlash for the sake of growth. Our responders told the Govt: focus on planning, regulatory and energy reform.
2. What should Britain’s priorities be over the next year? The most popular options were further planning reform, building Oxford-Cambridge and speeding up new nuclear energy projects.
3. Where should the Government spend more money? The most popular options with the experts we polled were all utilities: nuclear energy, grid infrastructure, water & rail. The least popular were social welfare, state pension and industrial subsidies.
4. Which taxes hurt growth least? The UK faces a £20-40bn fiscal gap. Filling this means raising taxes, but not all taxes hit growth the same. Our experts favoured consumption taxes (esp. “sin taxes”, fuel & aviation, VAT). They said to reduce stamp duties & NICs to help growth
5. Britain’s strengths: We asked which of Britain’s strengths are most under or overrated. London & SE, Golden Triangle & English language were considered most underrated. While green tech potential and soft power are overrated.
6. Britain’s weaknesses: similarly, we asked which are under or overrated. Energy cost, planning system and civil service ineffectiveness were seen as underrated. Experts thought the need for industrial strategy is overrated.
7. Housing - how can planning reform help boost productivity? The experts we asked we all pro planning reform and said that densification of existing urban areas, particularly in London & the Southeast, would have the biggest impact on productivity.
8. Will the UK achieve its Clean Power 2030 goal, defined as 95% of its electricity production coming from clean fuel sources? Most thought… no.
9. Interestingly, most responders thought the UK should expand North Sea oil & gas exploration (though several also noted that they expected this would have minimal impact on energy prices)
10. Will AI revolutionise UK productivity? Most responders were bullish: a majority thought that, by 2030, AI would increase productivity by at least 1 percentage point each year, plenty thought it would be even more.
So, what can we learn from these results? Conclusion 1: to quote Housing Secretary @stevereedmp, 🏗️ BUILD BABY BUILD. The UK struggles to build the housing, energy & transport we need. This can be done without spending more, but by reforming our broken planning system. But...
…Conclusion 2: Building will look different in different places. This is a tale of two countries: London and the Southeast desperately need more homes. Other towns & cities lack good transport, and industrial heartlands depend more on energy. (graph from @jburnmurdoch)
Conclusion 3: Energy prices matter. The UK has some of the highest electricity prices in the world. This squeezes household budgets, hampers industry & depresses investment. There are few levers to fix bills immediately, but this should not stop nuclear regulatory + grid reform
4: Fiscal constraints are real, but we have options. Vast majority of experts say we don’t need more spending to get growth. But smarter taxation is key, from replacing stamp duty with a property tax, to removing the £100k cliff edge. Prof Muellbauer & @timleunig say the same.
5: There are free lunches! To end on a positive note, our results show experts see free (or at least very cheap) lunches out there, from planning reform to high skilled migration. This means we can get growth with minimal political cost. Pic: the PM enjoying a free school meal
Huge thanks to @pdmsero, @freddie_poser, Matthew Stubbs & the @britishprogress team for pulling this survey together! Read the full results to find out more about these free lunches, and how we went about the survey. 👇 https://britishprogress.org/re...
And thanks again to @TomHCalver @thetimes for covering it! You can read the article here: https://www.thetimes.com/comme...
@dc_lawrence @BritishProgress Growth? What a joke. As someone involved in trying to guide businesses through the planning system, I can tell you that it's so turgid that many are discouraged from investing here before they even get permission. Others take the multi-year process as a warning and then
@GarethOrganic @BritishProgress this is precisely what our responders said – our planning system is the biggest barrier to growth. Always happy to discuss further!
@dc_lawrence @jburnmurdoch @BritishProgress Depressingly everyone thinks to grow the economy we need to do more in London and the south east. Is this because most respondents are based there?
@dc_lawrence @BritishProgress 🇬🇧 productivity was never higher, when factoring in credit creation, yet purchasing power to bottom 90% (labour) never lower as share of output. This financialization and redistribution of unearned income to capital class, the crux. To 🇬🇧, as 🇺🇲. https://wid.world/country/unit...
@dc_lawrence @BritishProgress Really enjoyed working on this project!
@dc_lawrence @BritishProgress Kind of a bit annoying that people keep asking this, keep getting the same answers, and then nothing ever happens.
@dc_lawrence @BritishProgress Didn't ask me...