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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 . 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

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  1. Client’s Logo here Inclusive Growth: How New Ambitions and New Alliances Can Rebuild the Opportunity Economy Rt Hon Liam Byrne MP June 2013

  2. Context (1): clearing up the crash High Debt-GDP ratios mean faster growth essential

  3. 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

  4. The challenge differs in different countries...

  5. And within countries... Breakdown of wage squeeze in the UK Young people are bearing the brunt of the wage squeeze

  6. But the problem is getting worse everywhere...

  7. 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

  8. So: what do we do? Supply Capital Competition policy/ New Market Entrants (aka ‘Enterprise’) Labour Demand Regional policy Fair Tax

  9. 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]

  10. 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

  11. Countries are rapidly increasing R&D spend OECD: average annual growth in science spend 2008-11

  12. 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

  13. Pro-work, pro-skill = productive workers

  14. Pro-work, pro-skill = productive workers Key Reforms to Apprenticeships in OECD

  15. Pro-work, pro-skill = higher pay Pressure for higher minimum wages is growing globally

  16. Pro-work, pro-skill = higher pay? OECD Minimum Wage ($) 22% rise in 13 years: but 0.8% since 2009

  17. Competition/ Enterprise A tiny fraction of firms... Are creating a huge proportion of jobs

  18. ‘Inclusive growth’ means no place left behind

  19. 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

  20. Fair taxes

  21. 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

  22. 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

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