The new government’s focus on economic growth might not seem significantly different from the previous government, but its focus on ‘inclusive growth’ is an important distinction.
The government argues that previous periods of strong economic growth have disproportionately benefitted certain parts of society, creating deep structural inequalities. Its commitment to ‘inclusive’ growth reflects an ambition to ensure that the benefits of economic progress are shared across often marginalised groups, whether defined by class, race, gender, or geography.
This philosophy explains the new government’s priorities as set out in their manifesto and the King’s Speech.
- Investment in public services: The government is committed to investing more funds into the NHS, schools and the police. They suggest that problems such as long waiting lists, poor educational attainment and court backlogs hinder economic growth by keeping people out of the workforce or limiting them to lower paid jobs.
- Employment law reform: As part of their election pledge to “make work pay”, the government intends to reform employment laws. They suggest that increasing wages at the lower end of the income scale will stimulate spending and drive growth. A happier, better paid workforce will be more productive and make a great contribution to the UK economy.
- Regional development: The government is focused on regional development through further devolution and infrastructure investment. Their prioritisation of planning reform is aimed at spurring economic growth outside of London and the South East, spreading economic benefits across the UK.
- Net-zero transition: By accelerating this transition, the government aims to create new and well-paid jobs in the green industry, lower bills, and increase the spending power of those who currently devote a significant portion of their income towards heating.
The financial and related professional services industry is well positioned to contribute to the inclusive growth agenda. Our industry not only provides well-paid jobs and higher productivity than the national average, it also plays a critical role in supporting regional development and the net-zero transition by providing capital, investment, professional services and insurance. It also has a significant presence – and makes a major contribution to the economies – in cities such as Manchester, Bristol, Leeds, Cardiff and Edinburgh are thriving financial.
A strong partnership between government and our industry is essential to support businesses to thrive and contribute even more to inclusive growth. You can read more about how we will continue to take this forward as well as our recommendations for the government to boost inclusive growth here. You can also keep up to date with our activity by signing up for our newsletter.
