Our Budget submission urged the Chancellor to set out a bold statement of where he saw our economy in 2015 – an economic strategy of ‘more than just cuts’ as I think some in the Coalition wanted.
The Chancellor has not taken our suggestion to set out four ambitions for the economy of 2015, which we proposed as:
• More companies bringing new goods and services to market;
• More globally-focused companies choosing to invest and grow in the UK;
• A lower cost of doing business in the UK;
• A more flexible and productive labour force.
But had he used these ambitions to set a stronger, clearer plan for growth, we would then have suggested that the measurable indicators underneath each of these ambitions should form the basis of annual report by the NAO.
The NAO would take responsibility for compiling the report and perhaps making a judgement, as the OBR is required to, as to whether the government had a greater than 50% likelihood of fulfilling its economic strategy.
Despite the government’s current position, we intend to watch these indicators anyway because we see progress in these areas as important for our members – and the wider economy.
So here is a rough schedule of when the indicators we set out for each ambition will next be updated:
1. More companies bringing new products and services to market
• Real business enterprise sector investment by businesses of all sizes in R&D returned to pre-recession peak (ONS – November 2012 for 2011 year)
• 60% increase in the take-up of the SME R&D tax credit (HMRC and ONS, 26 October 2012, for the 2010/11 year)
2. More globally-focused companies choosing to expand in the UK
• A higher proportion of companies exporting more than 25% of their turnover; (UKTI’s Barriers to Internationalisation survey, November 2012)
• A 2 percentage points increase in the share of private sector turnover accounted for by Mid-Sized Businesses. (Business Structure Database, around September 2012 for the 2011/12 tax year)
3. A lower cost of doing business
• Below average EU industrial electricity prices (DECC’s Quarterly Energy Prices ‘EU-27 median including taxes’, March 2013 for the 2012 year)
• A reduction of 10% in the time and money spent complying with domestic regulation (BIS's report of the net cost of new regulations reported six-monthly, next report Autumn 2012)
• The most competitive tax system in the G20 on a range of measures beyond the headline rate of corporation tax (comparison of UK tax system on a number of key variables for the coming tax year, Budget 2013 for the 2013/14 tax year)
4. A more productive and more flexible labour force
• An increase of 25% in the number of STEM apprenticeships at Level 3 (or above) (The Data Service, February 2013 for the 2011/12 year)
• A reduction in the proportion of hard-to-fill vacancies (UKCES, National Employers’ Skills Survey, Spring 2012 for 2011 year)
• 65% of people who take GCSEs achieve 5 A*-C grades including English and Maths (Department for Education, February 2013 for the 2011/12 year)
Watch this space for the results and our reaction around these dates.