Three steps for the new prime minister in the first 100 days to drive forward inclusive growth

23 July 2019

By CPP

Upon entering Downing Street, the new prime minister will face the same core issue as his predecessor, one that speaks to the disaffection demonstrated by Brexit and is being grappled with by countries across the world: the need for inclusive growth.

Inclusive growth seeks to tackle inequality and poverty by design and is an integral part of achieving sustainable, quality growth. It enables as many people as possible to benefit from and contribute to growth.

This parliament is an opportunity, and the right time, for political leaders to place inclusive growth at the front and centre of policy making.

Whilst the implementation of inclusive growth requires long term commitment, there are some initial steps that our new prime minister could take in the next 100 days.

1. Introduce measures of inclusive growth at local and national level to assess economic progress

The focus on GDP statistics as a barometer of economic performance is not a true measurement of how people experience economic growth. It prioritises quantity over quality and is a barrier to broad-based economic prosperity, by ignoring the distribution of growth.

Inclusive growth, in contrast, assesses how the ability to contribute to and benefit from growth is socially and spatially distributed.

Following in the footsteps of New Zealand, we need to embed such alternative measures into the nation’s psyche to fundamentally change the economic paradigm to the benefit of society as a whole. This needs to be consistent through local to national government.

As recently highlighted in our report The good life, measures that combine data on consumption, inequality, unemployment, leisure and life expectancy could be a way of rising to the challenge, using regularly reported and robust data to provide a fuller picture of how people are really experiencing the economy.

We are calling on the new prime minister to move the debate about economic growth beyond GDP to enable us to change how we measure and define economic success.


2. Implement the Augar Review on post-18 education and funding

The FE sector is critically underfunded and participation in adult learning at levels 2 and 3 has been falling in recent years, at significant cost to social mobility. CPP’s recent report Skills for inclusive growth highlights the importance of adult learning to earnings progression, showing that the likelihood of an individual escaping low pay increases substantially as workers gain higher levels of qualification.

The recently published Augar Review touches upon this issue and aims for parity of esteem between HE and FE education. Of particular note, the review recommends that full funding should be available for an individual’s first level 2 or level 3 qualification, the funding rule book should be simplified and that government should commit to providing a 3 year indicative Adult Education Budget to allow FE colleges to plan with greater certainty over a longer period.

Whilst of course there is far more to do on skills, the recommendations of this landmark report present an opportunity for the new prime minister to revitalise FE, help address both progression and pay for adults, and as a result, drive inclusive growth.


3. Embed the assessment of health outcomes in public policy making at local and national level

CPP argues that the greatest socioeconomic challenges of our time are also our greatest health challenges. In our recent report, Beyond the NHS, we estimated that 80m life years (1.5 years per person) and 170m years of healthy life years (3.2 years per person) are lost due to socioeconomic inequality, including poor-quality housing, knife crime, skills deprivation to in-work poverty and homelessness.

These figures provide compelling evidence that radical actions are needed. Framed within the context of rising healthcare demand, a stretched NHS and social care system, our new prime minister needs to place the social determinants of health at the centre of the prevention agenda. Government's recent consultation on prevention shows promising signs that progress will be made.

To do this, we recommend that the prime minister strengthens the role of the Chief Medical Officer by expanding their remit to explicitly include social determinants of health and that government departments at national and local level assess health impacts when developing and evaluating all public policy.