Unlocking Britain: Recovery and renewal after COVID-19 is a report produced by Bim Afolami MP with contributions from the Unlock Britain Commission and published by the Social Market Foundation, looking at ways in which Britain’s economy can recover after the COVID-19 Pandemic.
This report is about delivering transformative growth after COVID-19 to recover from the economic shock and build a greener and more equal economy that improves the country we love. Britain needs to be fairer and more resilient. The changes in this paper are designed to be put in place after the immediate health crisis has passed, and the virus is fully under control.
We can recover and rebuild. Yet this recovery will only come if we can persuade business leaders to create the high quality jobs we need. We need entrepreneurs to start new businesses again, investors to raise and deploy funds again, and consumers to buy things again. Put simply, this will require a resurgence in the nation’s confidence. Part of this is a rhetorical exercise, and the Prime Minister has immense skills in engendering the can-do spirit amongst the British people. But that rhetoric must be reinforced with a bold programme of supply-side economic reforms to turn hopeful optimism into real confidence in the long-term future.
We can use this crisis to tackle the areas where the economy has been weak and build an economy that is more resilient to the challenges of the coming decade. The policies outlined here complement the Government’s pre-crisis agenda of levelling up the economy and delivering net zero carbon growth by 2050.
At the beginning of May, I put together a group of businesspeople, entrepreneurs and economists to help me devise an economic programme that can set out structural changes required for Britain to flourish economically after the immediate crisis caused by COVID-19 has abated. This paper is the result.
What COVID-19 has manifested
This crisis has shown one fundamental thing. That Britain needs to be more resilient. Resilience is the capacity to recover from difficulties, and more generally to adapt to change.
First, the nation needs to be more resilient economically. It has demonstrated the weaknesses of 21st century globalisation, with a vulnerable service sector, and not enough self-sufficiency in industry and manufacturing, with our capacity to manufacture many goods (like aspects of PPE, or medical testing chemicals) being weak or non–existent. This may not have always mattered in a world where global supply chains are working smoothly, but in a more fragmented world this may matter more. In addition to this, our businesses in every sector have record levels of debt, and we will need to find a way of reducing that debt, nursing them through recovery and then growth, and do so in a way that enables the British people to share in their eventual success.
Secondly, the British people need to be better equipped in the modern knowledge economy. We need much more radical action to equip our people with the right skills to flourish in an increasingly agile and STEM driven economy.
Thirdly, our public sector will need to become more resilient, at every level. Too many levels of local government, together with a Byzantine planning system, make delivery of economically critical housing and infrastructure slow and expensive. Quangos are still ubiquitous. People and businesses find themselves frustrated by unaccountable yet ineffectively dispersed regulations and officialdom.
Principles for the programme of recovery
This programme of recovery has three principles:
1. The divide is not between state or private sector; it is between the institutions with purpose which support people, and the institutions which leave people behind.
2. Power needs to be returned to the people, away from the distant and unaccountable.
3. Freedom is hollow without giving people the means to benefit from it.
Summary – 10 ways to achieve transformative growth for the British economy
- Create a Recovery Fund to provide capital to British SMEs – and once recovery is complete, the fund should be floated on the London Stock Exchange. We should issue shares in the Fund, at a heavy discount, to frontline NHS workers and people aged 18–30, in both respects targeted to those who earn less than £30,000.
- Make it easier for people to invest their savings into businesses – this can inject £6 billion into British SMEs without raising new money from public or private sector.
- The Bank of England should set a nominal GDP level target.
- Remove one tier from local government, and rank local authorities according to key metrics – if a local authority consistently fails, MHCLG may put the local authority into special measures.
- Use a streamlined planning process for a much greater range, and size, of infrastructure. This will make the majority of infrastructure built in the UK much faster, cheaper and easier to build. This will help the “levelling up” agenda be delivered quickly.
- High Streets and urban housing: introduce a “Future Town Centre” council of specialist advisers to assist any town centres in their restructuring, introduce transparency on market rents in town centres, and align business rates to those on a yearly basis. On urban housing, allow “street votes” – proposal to allow individual streets to vote to change planning controls.
- Opportunity Zones for manufacturing centred around our research hubs, building on the freeport agenda already being developed by government.
- Opening up the economy by reducing barriers to innovation and industry presented by anti-competitive legislation. This would mean embedding a pro-competitive agenda into the regulatory framework by requiring a competition review by the Competition and Markets Authority (CMA) into key industries in the UK economy.
- Student debt on high quality STEM degrees should be written off if graduates spend five years working in STEM occupations (i) of high demand or (ii) in new Freeports or Opportunity Zones. STEM apprentices to be better funded and further financial incentives given to employers to take on more apprentices into full employment.
- Digital skills: private schools and universities should provide all their digital courses to state schools free of charge, which would enable us to equalise opportunities and widen digital skillsets in young people before they enter higher education and the workplace.