Beyond boosterism

Think tank: Resolution Foundation

Author(s): Various Authors

June 22, 2023

This report from UK think tank the Resolution Foundation looks at realigning the policy ecosystem to unleash private investment for sustainable growth.

The UK is a low investment nation. Low business investment is a big driver of this. Low investment is one reason behind the UK’s weak productivity growth, which in turn is the main reason behind the stagnation in UK living standards. Policy makers understand this and have made attempts to fix it. This paper, part of the Economy 2030 Inquiry, explains why this matters, why recent attempted fixes won’t cut it, and what to do about it, as part of a broader economic strategy for the UK. This report finds that corporation tax cuts and a return to policy stability, while important, will not be sufficient to bring about the new investment ecosystem that the UK badly needs. Instead, wide-ranging reforms to the pension system and corporate governance are needed to focus firms’ managers on long-term value, boosting their willingness to invest. Fundamental changes to the UK’s restrictive planning regime are needed to improve firms’ ability to execute these new investment plans. Meanwhile, unlisted high-growth businesses should get more backing from the newly restructured pensions industry, a powered-up British Business Bank, and evidence-based business support policies.