Tackling barriers to economic growth

25 September 2011, Labour Party conference

Chair: Tim Finch, IPPR, director of communications

Panel:

John Denham MP, shadow business secretary

Vicky Pryce, FTI consulting

Will Morris, General Electric

Tony Dolphin, IPPR, senior encomomist

The panel discussion opened with Tony Dolphin highlighting the risks and concerns for the future of economic growth. He highlighted the following:

  • The period after recession tends to see growth weaken
  • Weak demand over time sees less business investment
  • Unemployment and a lack of investment in human capital will see a deterioration in skills and some dropping out of the labour market altogether
  • Growth had slowed before many realised due to artificial growth in short-term sectors. With hindsight the end of the boom wasn’t real sustainable growth

He then went on to discuss how we boost growth with a focus on the importance of investing in human capital. He stated that many companies need to improve their investment and part of this is raising the status of vocational and technical training. Part of this would include an improved apprenticeships system. Lifelong learning and literacy and numeracy rates should also be improved, he said.

Investment in infrastructure from both the public and private sector were also important. He highlighted the need for new approaches from business in supporting new industries and from government in providing funding and infrastructure.

Will Morris, as director of European tax policy at General Electric, focused on tax and where tax benefits could support economic growth.

On apprenticeships he said that there were huge opportunities and a change in mind set is required for many in their attitude towards their value.  

He stated that tax is crucial and all as it always affects the bottom line. He believes that businesses are looking for sustainability, certainty and accountability. He felt that a greater “political risk” is required from government to encourage investment.

Shadow business secretary John Denham started by stating that the future level of growth of the local and international economies cannot be separated. Rebalancing the economy is about the private sector but also has to deliver in the labour market, he stressed.

He highlighted the issue of under-employment which affects many in their current role and also limits opportunities for others.

He cited three areas that needed to be considered:

  1. Confidence in government policy of ‘active intelligent government’ working with a range of sectors/markets
  2. Understand that markets are here to stay – public policy influences the type of businesses that thrive and their practice
  3. Certainty from government which would require them to look at the machinery of government.

Vicky Pryce, former joint head of the government's economic service, talked about her experiences working with the former government. She highlighted the importance of business structures working with government, skills and interventionist policy.