UK needs a credible growth plan - Business Works
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UK needs a credible growth plan

Ian Brinkley of The Work Foundation M arket confidence in the recovery and deficit reduction plan could collapse unless the government comes up with a credible strategy for reviving the UK economy. This is according to a submission to the Autumn Statement by The Work Foundation. The submission argues that the Chancellor must reject short-term fiscal boosts and focus resources on tackling the deep, long-term imbalances within the economy.

The submission identifies the three major structural problems as:

  • chronic underinvestment by private and public sectors;
  • severe and growing imbalances between successful and struggling parts of the country; and
  • a continued over-reliance on risky, unsustainable sources of growth (such as finance and property).
Unless they are addressed, these challenges will not only drag down growth in the short-term, but will also restrict the UKs long-term prosperity.

The submission undertakes an analysis of these problems and sets out five key priorities for the Autumn Statement:

  1. Bring forward large-scale investment in transport, energy and broadband infrastructure;
  2. Vastly expand investment in innovation policies, using funds to bring together new technological developments and ideas and translate them into UK commercial successes;
  3. Maintain the UKs position as the world-leading digital economy by re-shaping IP policy and funding mechanisms to support innovation in global markets;
  4. Close the regional innovation gap by giving resources and freedom to Local Enterprise Partnerships, and introducing proper incentives to build new homes en masse;
  5. Ensure that credit easing is effective in diverting money towards innovative SMEs, by funding these firms more directly rather than relying on the banks to allocate this funding.

"While the Coalition has identified many of the right priorities on innovation and investment, it has yet to back them in a large-scale or co-ordinated fashion," said Ian Brinkley, Director of The Work Foundation. "With the UK facing one of the slowest economic recoveries on record, now is the time for the government to demonstrate its commitment to growth by moving forward in these areas on a far larger scale."

"If any short-term stimulus is required, it must be targeted at investment in areas which will also boost long-term growth, such as bringing forward more public investment projects, rather than on unsustainable tax breaks."

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