Reviving Progress in the UK

Britain is now the 'stagnation nation'. We outline the ideas and ambition necessary to generate an abundance of progress in the UK.

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Jul 21, 2022

Progress in the UK has stalled. For too long, politics has been devoid of remedies. Here we set out several ideas to end stagnation and create an alternative future for people across the country. We hope to refine these ideas in the coming months, with the help of the progressive politics and policy community. Whilst this is aimed primarily at the Labour Party, many of these issues are not partisan. The only goal is progress.

A sketch of the UK’s political economy

Successive UK governments have overseen a period of ‘managed national decline’. Each week, a new statistic emerges to capture Britain’s tragically low economic growth. Sclerotic institutions leave the nation unable to anticipate crises. The inevitable crises that then ensue are poorly managed, exacerbating already enormous inequality further. In the political arena, veto-wielding boomers and a derivative commentariat snuff out any space for creative or radical policy.

The pandemic has highlighted how we are not ‘all in this together’. Crises have distributional consequences, and ensuring that we are able to anticipate and respond to unlikely-yet-high-impact events demonstrates a strong commitment to both working people today and future generations.

Yet our problems are not just future-oriented – they face us today. The UK is still rich by any meaningful international definition, but it has no natural right to remain so. As the ‘stagnation nation’, we need to build: new infrastructure, new institutions, new communities. This is part of the answer to the productivity puzzle that has long plagued the UK. Rachel Reeves is right to say the reason Britain has become a high tax society is because it has become a low growth economy. What are progressives without progress?

Political objectives

The UK’s current malaise means that economic growth must be the number one goal for any party, but especially the Labour party, going into the next election. This sits alongside several other objectives and trade-offs which are fundamental to the progressive movement:

Demonstrating economic & governing competence, but with ambition, rather than an accountant mindset
Adopting supply-side reforms that generate cheap and abundant clean energy, secure housing, education and healthcare
Modernising the state & the economy, while ensuring secure, empowered futures for the people that make it work
Growing regional economies whilst focusing on what the UK is actually good at producing today, rather than digging up old answers
Achieving climate stability while ensuring that working class communities in the UK and around the world have the opportunity to lead meaningful lives with a high standard of living

In theory, governments over the last 12 years have shared some of these goals. But for Labour to focus on wealth creation and economic growth would be refreshing on its own terms. And it can differentiate itself further by also improving state capacity: ensuring that its goals are actually achieved, rather than simply used as rhetorical fuel in a perpetual motion machine of post-material politics. Although many recent governments have made encouraging statements on technology, science and innovation, the credibility required to deliver on them has too often been lacking. Labour must be different.

An Economic Narrative for Progressives

Whilst the UK has many strengths, no political leader would choose the status quo as a starting point for quantum-leap economic growth. Recent decades are awash with missed economic opportunities large and small - now sustained marginal losses are taking its toll . To reignite economic, technological, environmental and social progress in Britain, we need a rewiring of our policy-developing institutions, an overhaul of our political parties, and a tectonic shift in our political culture.

Progressives, who champion prosperity and social justice above all, must therefore be focused on arresting the decline and course-correcting for the future. In practice, the policies which can deliver this may, traditionally, be either left- or right-coded. But the real test is whether livelihoods improve over the long term. Even if the fruits of this approach don’t emerge in a single election term, creating momentum towards growth is likely to be rewarded politically. And more importantly, acting where the impact is not only significant, but durable, is essential to put us back on the path where compounding growth is secured, rather than just assumed.

The ideas that follow are a directional sketch of what we think the UK should do. We have lives…so for now, these policies are uncosted and, given many represent significant investment commitments, are not prioritised/sequenced. We’ve also probably got things wrong! But we think there is value in shaping the high level argument first, rather than pretending false precision. And the only real budget constraint is intertemporal: while it might seem like we can’t afford some of the proposals below today, it is sound economics both to invest in economic growth and reduce the future costs of the climate crisis. We also favour higher taxes on carbon and fuel, land value, capital gains, plus a lifetime receipts tax on any inheritance over £100k and a broader VAT base.

We plan on building out these ideas further and welcome engagement on how they could be improved.

Energy & Climate

Build 2 new nuclear plants by 2035 to secure a clean energy baseload
Increase energy capacity from solar and wind to 200GW by 2035, two thirds more than current targets
Operation Warp Speed 2.0.: Establish an advanced market commitment for any carbon removal technology with a negativity ratio <1 that can remove at least 0.5 gigatons of carbon per year at <£80 per tonne
Reorient farming subsidies towards precision agriculture & alternative proteins with a goal of reducing animal agriculture emissions 50% by 2035
Phase in a carbon tax of £100 per tonne by 2030, coupled with carbon dividends to ensure that low-income households are not made worse-off

Health

Massively scale up research funding to identify biomarkers of pre-symptomatic illness
Accelerate moves to a more decentralised & personalised delivery model for healthcare, using wearable and home devices, telemedicine, and decentralised treatments to treat people much earlier and more cheaply
NHS becomes a ‘buyer of first resort’ for life-changing technologies
Increase mandatory sick pay from 19% of worker’s salary to 70%
Accelerate a new regulatory framework for software-based medical devices, removing the bias against iteration and improvement inherent to the existing regime designed for one-off hardware devices

Education & Childcare

Free universal childcare for all
Provide universities with targets to maximise the number of spinouts that come from academic research, with success reflected in future research funding
Set a 5% cap on any equity stake held by universities for spinouts
Build Fraunhofer-style institutes at regional universities, specialising in services, advanced manufacturing and emerging technologies
Open source degree accreditation standards to allow alternative educational models that would anyone to gain a degree from free, online resources alone

Talent & Innovation

Extend the High Potential Visa to graduates from any UK university and the world’s top universities according to post-graduation earnings, not only those that feature on standard ranking tables
ARIA funds a £50m a year program in which philanthropically-matched grants fund a portfolio of independent focused research organisations, rather than funding specific research initiatives
Cut the time researchers spend applying for grants in Innovate UK by rolling out ‘fast grants’
Pay much better wages & improve working conditions in public services with talent shortages and high turnover – e.g. junior doctors, teachers, police. A junior doctor couple should be able to match their shifts!

Housing

Reform planning rules, including by allowing street votes on buildings’ design and density
Build 250k more social housing units per year by the end of the next parliament
Replace council tax with a land value tax
Require solar panels to be installed with every newly built home
Fund 50% of home insulation costs for any households with combined income over £60k, 75% for any above £50k, and 100% for any below this

Transport

Build HS2 in full, including the eastern leg to Leeds
Build HS3 / Northern Powerhouse Rail: new high-speed lines across the North, and electrifying existing ones, between Liverpool, Manchester, Sheffield and Leeds
Build a mass transit system (tram or underground) in every city with over 500,000 inhabitants by 2035
Build Crossrail 2
Accelerate completion of East-West Rail between Oxford and Cambridge, electrified and in full, by 2030
Accelerate regulatory pathway to enable drones to fly beyond visual line of sight (BVLOS) by 2024

State infrastructure

Split up the Treasury into a budget office headed by the PM, while moving growth levers to BEIS. This would signal Labour’s economic competence, and focus on growth, just as Bank of England independence did in 1997.
Create new government technology platforms for data, identity and payments, decoupled from service delivery
Provide an API for every data register (unless nationally sensitive) on which companies and nonprofits alike can build new methods of service delivery
Require every credential (e.g. passport, driving licence) to be issued digitally
Increase the time horizon of the national risk register from two years to 15 years
Expand the civil contingencies secretariat and increase resources of the Resilience Capabilities Programme by 5x

Regulation, Investment & Business Environment

Create a universal sandbox & auto-enrol every start-up, with insurance offered by regulators
Fund every regulator so they can provide innovative companies with novel solutions with effective dialogue and guidance throughout the regulatory journey, to avoid the black box of authorisation applications in sectors such as health or food
Establish a permanent, 100% tax deduction for capital spending to follow the super-deduction, which ends in March 2023
Reform the pension fee charge cap and Solvency II rules to unlock more institutional financing into UK venture capital
Allow ISA savings to be invested in VC funds-of-funds, a more diversified approach than investing in funds or companies directly

Politics

Move Parliament to Manchester
Create a new department for future generations with a minister for existential risk
Move to a federal system, with most domestic policy devolved to city regions with appointed mayors
Replace the Lords with a second chamber of mayors and city-region representatives
Reverse the decision to hold mayoral elections under the first past the post system, and in time move towards proportional representation

Conclusion

Progress is a political choice. Compound growth cannot do its magic amid major stagnation. Without a clear vision and plan to push forward the UK’s economic and social frontier, the rot will only set in further. Progressives must replace slogans on regional economic development with success stories. We must help talented people in this country build viable, alternative platforms that deliver for communities. To create an abundance of progress we need an abundance of aspiration. Time for a progress manifesto.

Tom Westgarth is an AI Policy Consultant at Oxford Insights (Twitter:@Tom_Westgarth15)

Andrew Bennett is a Policy Principal at Form Ventures (Twitter: andrewjb_)