Inauguration: #CPC17, Productivity, and UC
The Conservative Party Conference took place in Manchester this week and marked the end of our productivity research programme and official birth of the CSJ Work and Welfare Unit. The CSJ launched our most recent major publication, The Great British Breakthrough: Driving Productivity Growth in the UK on Sunday night with our Chairman Iain Duncan Smith hosting the Chancellor of the Exchequer Phillip Hammond, working group member Dr Gerard Lyons, Ronan Harris of Google and Katherine Chapman of the Living Wage Foundation.
There is little doubt that productivity remains one of the most perplexing problems facing our economy. However, a few takeaways from the event and talking to various attendees; the onus is on business, it’s time they started investing in both modern technologies and in their staff. Analysis by Grant Thornton in 2016 found that UK corporates have seen increased revenue, cash and corporate debt growth in recent years. They estimate UK companies are sitting on £244 billion. This statistic concurs with US corporates that have a record $1.9 trillion sitting on their balance sheets.
In a period when capitalism and business has endured criticism over their social value and public debt levels have restricted the scope for Government grant funding, we believe it is fair and practical to place responsibility for both investment in physical and human capital on business. What do they need to do; provide better terms of employment for staff, increase in work training, improve take-up of new technologies like digital networking, big data, AI and nanotechnology.
The report’s message is clear, and was generally well received, the British economy must do more to invest in practices and appliances that grow our economy. Most important though is ensuring workers do not get stuck in low pay and low skilled jobs. Wage mobility and occupational progression is very low in the UK. As we encourage the Government to invest in better vocational education, in-work training as well as re-training for the unemployed, it is important we see an improvement in both wage and occupational mobility.
In other news, the Work and Welfare Unit held an event with the Secretary of State for Work and Pensions to talk about the future of welfare reform. The discussion ranged from Universal Credit, to working with claimants with complex problems, financial education and managing an economy with increasing levels of automation putting many jobs at risk.
Universal Credit remains a huge topic within the welfare lexicon at the moment. It is crucial for the CSJ to highlight how optimistic we are that UC can help huge numbers back into work (provided it is implemented properly). I recommend reading CSJ Managing Director Ed Boyd’s article for Conservative Home, here. One of the other subjects that was raised over the week was around advances. The Secretary of State announced at Conference that advance payments would be made by the DWP to claimants over 5 days and also on the same day as applications. This is game changing as it targets the most disadvantaged in society who are most at risk of problem debt and going without the basic necessities like food. However, it is essential that claimants know these advance payments are available to them if they need them. Transitioning from one benefit to another is always stressful, it is important that JCP work coaches, housing associations and claimants to work with each other and find payment solutions that are in the best interest of everyone.
Going forward the Work and Welfare Unit will be doing more on UC, more on barriers to employment and finally continuing our work on skills across our workforce.
