Alongside the Budget last week, the government published the Plan for Growth.
The Plan prioritises four key ambitions for the UK:
- To create the most competitive tax system in the G20;
- To make the UK one of the best places to start, finance, and grow a business;
- Encourage investments and exports;
- Create a more educated, flexible workforce.
Furthermore, each of these ambitions is backed by ‘measurable benchmarks'. For example under tax a benchmark is to have the lowest corporate tax rate in the G7.
The coalition makes clear that the focus on growth begun with the Growth Review will continue over the whole parliament.
Now compare this with the recommendation in our Budget Submission where we called for a Growth Mandate, featuring:
- Prioritisation of four key areas;
- Measurable indicators of success;
- A parliament-long focus on growth.
That's a pretty good correlation. But before we award the Chancellor and Business Secretary an A+ there are a couple of reasons to pause for thought.
We called for a Growth Mandate and we chose that name deliberately. We wanted the Growth Mandate to match the Fiscal Mandate with its clarity, predominance in the setting of the budget, and currency in the media.
It might seem a subtle point but by publishing the Plan for Growth as a separate 126 page document, co-authored by HMT and BIS, the government has risked the Plan succumbing to the fate of so many other such documents in the past.
In the past, such documents seemed to be de rigueur for a budget. Endless publishing of strategies seemed to overtake and blur each other, making the direction of travel less clear, not more.
Now, that's not happened yet. But the challenge for the government is to give the Plan for Growth the necessary backing to give it ongoing relevance.
Secondly, we need to see real prioritisation. We suggested focusing on tax, finance, skills, and regulation – the top four concerns our members have with the UK business environment.
The Plan for Growth is a little patchy here. The tax and skills ambitions are good. But making the UK a great place to start, finance, and grow a business is a bit loose. It could potentially cover all manner of government actions to support growth.
And while there are multiple worthy areas where the government could make progress, the point of prioritising, particularly in an era of such limited resources, is to focus on the most important issues.
The final area to watch is the measurable benchmarks. It is good that the government has shown willingness to be held to account.
However the choice of some indicators is not exactly stretching (home to most top universities outside U.S. - already the case) and some are not within the government's ability to directly influence (increase in exports to key target markets). The number of them looks on the high side too – giving it a ‘scorecard' feel rather than creating an expectation for concrete progress on each indicator.
Despite these cautions the Plan for Growth has the potential to be very positive. The real test will not be in its writing but in its delivery. We'll be doing our part by watching carefully on how the government follows through.