The inclusive growth test – how do the manifestos measure up?
Annabel Smith, Director of Place and Practice, writes for CPP on how the two main parties' election manifestos square up to delivering inclusive growth
Annabel Smith
Director of Place and Practice at the Centre for Progressive Policy
Annabel Smith
Director of Place and Practice at the Centre for Progressive Policy
It’s hard not to feel the urgency of the political moment. Floundering growth, ailing public services and, according to the Joseph Rowntree Foundation’s latest cost of living tracker, the scandal of 7 million low-income families going without daily essentials like food, adequate clothing and hot showers. Despite this, the mood music of this election campaign has felt oddly disjointed from these stakes, the solutions failing to match up to the diagnosis and lived experiences of communities.
Both main parties are hitching their wagons to growth, but CPP has long argued that the grow now, redistribute later model has not only left too many shut out of having a stake in growth, but has been at the root of our economic stagnation. Instead, the conditions for inclusive growth need to be created through active industrial strategy, meaningfully empowering places with both reform and investment, and building further foundations for our public services. With the main parties’ manifestos now published, do they contain a plan to make inclusive growth a reality?
In the absence of action to close the £142bn spending gap through tax changes or reform to the fiscal framework, devolution and reform are doing much of the heavy lifting in Labour’s manifesto. Clear recognition of English devolution’s potential role as a lever to unlock economic growth across the country offers transformative potential. Statutory local growth plans led by areas partnered with a national sector-based industrial strategy from an enabling, mission driven government is all substantive and sensible. As are national reforms like the New Deal for Working People, which will have the biggest impact in more deprived areas. The details will matter, and many are still to be worked through. These include resourcing and relationships with local authorities, as well as how devolved power can unlock community power and support communities to play a leading role in shaping the economy.
While committing to the continued rollout of Mayoral Combined Authorities, the Conservatives’ offering leaves any semblance to levelling up dead in the water, by depriving local government of the resource capabilities to make good on delivery. Nowhere is this most symbolic than in the pledge to extend the Shared Prosperity Fund – which stood at the heart of the levelling up agenda – for three years before scrapping it entirely to fund national service. Meanwhile, the Liberal Democrats seem to suggest there may be disquiet in the happy family of devolution consensus, with a pledge to ‘end the top-down reorganisation of councils and the imposition of elected mayors on communities who do not want them’. This could add some degree of challenge to a Labour government’s plan for all regions to move towards having one.
Childcare is another enabler of inclusive growth that is receiving major attention. Although Labour are not making significant commitments beyond current government plans, they are matching these and adding a pledge for 3,000 nurseries in school classrooms. This shows recognition of childcare and early education as a force for growth in both the short and long term, through improving labour market participation and as a driver of education and long-term life and social mobility outcomes. There are serious gains to be made here, with CPP’s own analysis showing that accessible childcare could result in an extra £38bn per year, equivalent to 1% of GDP.
The Liberal Democrats’ manifesto goes further, committing to a review of rates providers receive for ‘funded’ hours to ensure the amount they receive covers their actual costs, develop a career strategy for nursery staff, and give more hours to children from disadvantaged families. Primed to take seats from rural and home counties Conservatives, they will be an important opposition voice in ensuring childcare retains momentum on the policy agenda. Right now, just 20% of the poorest third of families are eligible for the existing 30-hour offer for three- and four-year-olds, so to be effective in fostering fair growth, the offer needs to extend to the children whose parents aren’t already in work. This will enable them to fulfil the twin goal of 1) enabling more parents back into work who are currently locked out due to high costs, and 2) narrowing the wide educational attainment gap between children from deprived and prosperous families.
On public services more widely, the Conservative manifesto frames migration as the greatest challenge facing them. By contrast, the Liberal Democrats place a welcome focus on social care and supporting the workforce and supporting the wider working environment to be more flexible to caring responsibilities. While Labour offers limited detail on the role of public services in economic performance, there is cause for hope in its emphasis on embedding a greater focus on prevention to support healthy life expectancy – arguably the most fundamental marker of inclusive growth – something CPP has long been calling for, not least for its positive impacts on GDP. And, as we have argued, opportunities to improve prevention through the better alignment of services afforded by devolution and integrated care partnerships must be seized.
There is no getting around the fact that the next government is going to face an uphill struggle. But with a clear-eyed focus on a type of growth that rekindles economic productivity by maximising the potential of all our communities, it is possible to begin the long journey of building firmer foundations.
Originally posted on the Centre for Progressive Policy website.
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