Time to invest in our future: what the Budget can do to help

As the Conservatives prepare for their first conference since the General Election, speculation is rife over the personalities in the government and its direction of travel. Beyond this, the November Budget provides an opportunity to invest in skills to tackle our long-term challenges.

Party conference season is always very exciting / exhausting for party members, journalists and political anoraks (I fear I’m in this latter category). For Labour the election defeat felt like a victory, with conference attendees celebrating a perhaps unexpectedly strong performance. For the Conservatives, being the largest party feels like a defeat given landslide expectations. So debate at conference is likely to consider which Cabinet Minister is on maneuvers to promote their chances of succeeding Theresa May, and what the various speeches mean for the debate the government is having with itself about Brexit priorities?

But within a few days the bunting will have come down and the podium packed away for another year. Attention will then start to turn to the November Budget – which now replaces the Spring Budget as the key chance for the Chancellor to set out his stall each year.

And its impacts have the potential to be much longer lasting than the average conference speech. For, regardless of Brexit, the UK faces some pretty big challenges. The biggest of these is where our future growth is going to come from. Productivity, the amount the average worker produces, has flatlined for the last decade. Our productivity is more than 25% lower than in France, Germany and the US, partly due to a poor skills base. 

This poor productivity performance is a key cause of poor growth in living standards. With prices in the shops rising more quickly than average wages, we are on track for the worst decade for living standards growth since the Napoleonic Wars.

In turn, all of this has raised concerns that young people will have poorer life chances than their parents. The calls for increased public spending to tackle the causes and symptoms of these many challenges grow louder, but we’re still borrowing around £1bn per week with deficit reduction targets pushed further and further back – ultimately, we need increased economic growth to generate revenues for public spending.

So far, so gloomy. But recognising a problem is the first step to tackling it. And at the Learning and Work Institute, we’re calling on the Chancellor to take five steps to fixing the foundations of our economy for future prosperity:

• Better offer for young people. Including a greater focus on high quality apprenticeships, and raising the repayment threshold for university tuition fees and Advanced Learner Loans

• Help with the cost of living. Including reversing cuts to Universal Credit, and reviewing its rollout to ensure people get the help they need at the time they need it
• New approaches to lifelong learning. Including a national strategy and trials of Personal Learning Accounts.
• Delivering full employment. Including a ten year plan to halve the disability employment gap and innovation to integrate services
• Investing in learning. Including the Adult Education Budget, proceeding with devolution, and a locally-based Shared Prosperity Fund to replace European Social Fund

You can read our full submission to the Chancellor here: http://www.learningandwork.org.uk/wp-content/uploads/2017/09/Budget-2017-submission.pdf

This does feel like a moment in time, rather like 1945 and 1979. Ten years after the financial crash, with Brexit on the horizon, we have some decisions to take about the kind of society we want to be and where our future prosperity is going to come from.

As a country, we have many strengths and, I believe, some great times ahead. To grasp these opportunities we need to invest in our future. That means helping people with the cost of living and giving them the skills and opportunities they need to succeed.

Stephen Evans, Chief Executive, Learning and Work Institute