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Client’s Logo here. Inclusive Growth: How New Ambitions and New Alliances Can Rebuild the Opportunity Economy. Rt Hon Liam Byrne MP. June 2013. Context (1): clearing up the crash . High Debt-GDP ratios mean faster growth essential . Context (2): the price and prize of globalisation .

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inclusive growth how new ambitions and new alliances can rebuild the opportunity economy

Client’s Logo here

Inclusive Growth: How New Ambitions and New Alliances Can Rebuild the Opportunity Economy

Rt Hon Liam Byrne MP

June 2013

context 1 clearing up the crash
Context (1): clearing up the crash

High Debt-GDP ratios mean faster growth essential

context 2 the price and prize of globalisation
Context (2): the price and prize of globalisation

Workers’ share of earnings is collapsing

In swathes of the west, the majority of wealth goes to the minority of people

and within countries
And within countries...

Breakdown of wage squeeze in the UK

Young people are bearing the brunt of the wage squeeze

productivity gains are no longer fairly shared
Productivity gains are no longer fairly shared

In the UK productivity and pay link broke down in 90s

And living standards are likely to remain flat for a long time

so what do we do
So: what do we do?

Supply

Capital

Competition policy/ New Market Entrants (aka ‘Enterprise’)

Labour

Demand

Regional policy

Fair Tax

demand side we need a bigger market
Demand side: we need a bigger market

“A potential TTIP is estimated to yield an increase in UK national income of between £4-10 billion annually, or up to £100 billion over a ten-year period (which corresponds to a 0.14-0.35 per cent increase in GDP levels.)” Centre for Economic Policy Research, March 2013 , page 6

EU-China: “Such a deal would deliver a sizeable economic prize with initial economic analysis suggesting it could be worth up to £1.8 billion every year to the UK economy alone”.

PM champions EU free trade deal with China, 2 December 2013

“a TPP agreement provides global income benefits of an estimated $223 billion per year, by 2025. Real income benefits to the United States are an estimated $77 billion per year. The TPP could generate an estimated $305 billion in additional world exports per year, by 2025, including an additional $123.5 billion in U.S. exports.” – Petersen Institute1]

supply side we need better science and innovation
Supply side: we need better science and innovation

Put science and innovation at the heart if a strategy for long-term economic growth;

Prioritise investment in excellent people;

Strengthen Government’s use of science;

Reinforce the UK’s position as a hub for global science and innovation;

Better align science and innovation with global challenges;

Revitalise science and mathematics education.

10

countries are rapidly increasing r d spend
Countries are rapidly increasing R&D spend

OECD: average annual growth in science spend 2008-11

patient capital
Patient capital

"The idea that the smartest, richest elites of society find this an acceptable activity. This predatory activity.“ M Lewis

“A crucial breakthrough would occur if the major players in the market, particularly the big asset owners, joined the fight—something we believe is in the best interests of their constituents”. 

Focusing Capital on the Long Term

by Dominic Barton and Mark Wiseman

pro work pro skill productive workers1
Pro-work, pro-skill = productive workers

Key Reforms to Apprenticeships in OECD

pro work pro skill higher pay
Pro-work, pro-skill = higher pay

Pressure for higher minimum wages is growing globally

pro work pro skill higher pay1
Pro-work, pro-skill = higher pay?

OECD Minimum Wage ($)

22% rise in 13 years: but 0.8% since 2009

competition enterprise
Competition/ Enterprise

A tiny fraction of firms...

Are creating a huge proportion of jobs

fair taxes
Fair taxes

Amazon UK paid £2.4m tax last year, despite £4bn sales – BBC, 16/5/14

Starbucks pays UK corporation tax for first time since 2009 – BBC, 24/6/13

‘Companies have to pay their share. Tax is a moral issue’ – Rt Hon Margaret Hodge MP, Chair Public Accounts Committee

fair taxes2
Fair taxes

Question #1: Do you consider the amount of Federal Income Tax you have to pay is too high, about right, or too low? 

Gallup 2014, quoted,  http://globaleconomicanalysis.blogspot.com/2014/04/52-say-taxes-too-high-54-say-taxes-fair.html#u0OBf7JPy7Hs6oHG.99

where are the win wins and who are they with
Where are the win-wins? And who are they with?

A bigger market-place + better infrastructure

Strong science and innovation policy

Patient capital to encourage long-termism

Good HE + better vocational education the key to unlock better pay

Fair competition and enterprise as basis for market regulation

Regional policy that supports local clusters

Fair taxes connected to business needs