Revamped Growth Review important for meaningful policy reform

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I mentioned on Friday that EEF has been calling for a programme of growth-enhancing policy reforms since Budget 2010.

The government's response, at least for now, would be that such a programme already exists; it's called the Growth Review.

The Growth Review is in reality a series of smaller reviews of policy areas or segments of the economy where the government sets out to find reforms to boost growth.

After a promising start, the Growth Review is in our view starting to peter out and could do with refocusing.

At the outset there was a welcome determination from Ministers and departments to work across Whitehall identifying the biggest barriers to growth in the review area in question.

So for example, the Advanced Manufacturing strand of the Growth Review, despite being led by the Business Department, was able to look at issues of taxation, usually the exclusive preserve of HM Treasury.

This may sound modest but it was refreshing compared with too often in the past when Whitehall departments have retrenched into their respective policy silos.

But unfortunately as Budget 2011 came and went we seem to have lost focus.

We are not sticking with the most important areas for growth and relentlessly pushing for progress. For example access to finance was one of the first strands of the Growth Review but now seems to have been put to the side after only minor reforms.

We now seem to be in a world where ever more new strands are added to the Growth Review. Past strands are accounted for in terms of numbers of actions (usually 100+) rather than any discussion of the outcomes that will be changed as a result.

So in our submission to the government ahead of the Autumn Statement, we set out some key suggested changes for making a refocused Growth Review more effective:

1. Focus on the areas that matter most for growth

Very little fiscal headroom and limited reform capacity means focusing resources on changes that will make the biggest difference for growth

Progress trumps proliferation in terms of number of reforms;

EEF prioritises improving access to finance and the supply of skills and decreasing the burden of taxation and regulation.

2. Take a Parliament-long focus with an ambition of transformative change

A consistent focus on the areas that matter most can add up to meaningful change over the course of the Parliament.

Reforms should be informed by a vision of transformative change in the business environment.

3. Set meaningful benchmarks both to measure progress and define success

Government's Plan for Growth set some measures but needs realism e.g. great to have most competitive tax regime in G20 as an ambition – but we need to measure success by more than the corporate tax rate.

Benchmarks are important to demonstrate progress year-on-year as well as describing successful outcome we're ultimately aiming for.

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