9 September 2020

Going for Growth: how business can power the Covid recovery

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Even before the pandemic hit, the British economy was bumping along, with sluggish growth, stagnant wages and productivity growth among the worst in the developed world. The Government had done a good job of bringing the public finances under control, only to see much of that work evaporate in the space of just a few months.

If increasing growth was a top priority before Covid struck, the record-breaking fall in output this year means it is now completely indispensable. There is no such thing as an economic panacea, but economic growth is as close as you’ll get to one: put simply most, if not all the problems the UK faces would be improved substantially if we can get growth back to normal historical levels. Fail to achieve that and our future prospects look grim.

As I’ve written before, without sustained growth the problem of intergenerational fairness will only become more acute as younger people find their pay-packets barely increasing but their taxes rising nonetheless to pay for the pensions, health and social care of a burgeoning elderly population. And you can forget about solving the housing crisis – unless wages start increasing faster than house prices, affordability is not going to improve. And what about bringing debt levels down? Since the government isn’t going to be running a surplus any time soon, the only real hope for fiscal consolidation is to expand the economy.

So, identifying the problem is simple enough – almost everyone apart from a few ‘degrowth’ cranks would agree that growth has been too low and needs to increase as a matter of urgency. Altogether harder is coming up with the solution. Although some have touted the idea of the state taking a larger role in the economy or attempting to invest in the so-called technologies of the future in order to boost growth, there’s little evidence that these work. More to the point, low growth isn’t a problem in one sector or industry that a bit of targeted public investment can fix, it’s economy-wide. Unless we put in place the correct policies to get the private sector growing at much higher rates then it doesn’t matter how much the state spends, we won’t be boosting growth anytime soon.

And that’s where we at the Centre for Policy Studies come in. We’re running a new Going for Growth programme to examine how we can ensure a business-led recovery and what reforms we need to put in place to boost growth over the long term. As part of this the Going for Growth Conference this Friday will bring together a range of leading politicians, business leaders, and experts from across policy areas and industries to discuss the key questions involving recovery and long-term growth: What role does the private sector need to play in the recovery? How can housing and planning reform help to boost growth? How much of an obstacle is regulation and what can we do to reform it? And importantly how do all of these interact with the Government’s overarching levelling up agenda?

In terms of practical policies to boost growth, who better to talk about it than a former Chancellor? Well we’ve gone one better and have two speaking at the conference: Sajid Javid, whose recent CPS paper ‘After the Virus’ is a must-read, and George Osborne, a man who knows something about steering the UK economy through years of recovery.

Alongside them, bringing their knowledge and experience of what the private sector needs to grow, are the City of London’s Catherine McGuiness, the Managing Director of Lloyds Mike Jones, former Prime Minister’s Chief Business Advisor Andrew Griffith, and the CPS’s own Chairman Michael Spencer. Other speakers include the acting director of the Joseph Rowntree Foundation, Helen Barnard, the leading economist Gerard Lyons, the FT’s economics editor Chris Giles, and the Spectator’s editor, Fraser Nelson.

It has never been more important that we boost growth in order to secure the recovery and solve many of the long-term issues that have been building up. The Going for Growth Conference offer an opportunity to bring together key policy makers and thinkers to discuss the key issues and debate the policies which will do most to help businesses recover and solve the issue of low growth.

To register free for the conference sign up here.

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Jethro Elsden is a Data Analyst at the Centre for Policy Studies.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.