Report Back from the Economy Commission

Since the Party launched this year’s policy consultation the NPF commission on Economy, Business and Trade has continued to meet with sessions in London in March and May.

At this stage the meetings are concerned with taking evidence and so far we have had presentations from IPPR the left wing think tank, and from Graham Turner, who is advising John McDonnell on reforming the finance sector.

IPPR

Carys Roberts of IPPR focussed on the changes in the economy due to automation, “the rise of the robots”. and the emergence of the “platform economy”. In contrast to the press version where automation leads to job losses, she argued that some jobs would decline but not all and not all at once. The policy issue is how to enable the reallocation of workers to new jobs. The risk is of a split between good jobs (high skill and well paid) and lousy jobs causing a rise in inequality.

Policy-makers need to do three things:

  • manage the acceleration of automation to increase productivity
  • create national “missions “to support small firms to benefit, for example through supply chain measures;
  • improve the skill system, through apprenticeships and retraining allowances.

She also discussed the importance of ownership and advocated:

  • using the employee ownership trust model;
  • expanding the coop sector;
  • creating a collective wealth fund.

Finance Reform

Graham Turner also saw automation as necessary to boost productivity but pointed to the regional imbalance in economic growth. Most technology companies, jobs and R&D are in London or in a wider region bounded by Bath, Cambridge and London. Tech companies locate themselves near the sources of finance and hence his proposal to move part of the Bank of England to Birmingham.

The key idea is to reform the role of the Bank of England in order to change the behaviour of Britain’s banks. banks do not support enough business investment (or R&D) instead preferring to loan against property. Innovation, technology, high skills and finance need to create a virtuous cycle of investment and growth.

Submissions

Each meeting spends time examining the submissions from CLPs and members made through the Policy Forum website. www.policyforum.labour.org.uk Every day we receive an email alert listing the new submissions and members of the commission are expected to respond. At present many of the submissions concern Brexit, but we expect to hear more directly addressing the consultation paper as the deadline approaches.

There is also an opportunity for dialogue with the front bench teams at each meeting. Barry Gardiner has reported on the progress of the customs bills before parliament. Rebecca long Baily has kept us up to date on issues like the corporate governance review, the GKN take over, and the review of the gig economy.

The commission meets again in June and has a further meeting planned for July.

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