Let’s make 2017 a year that works for everyone
12 December 2016
As 2016 draws to a close, I am taking a moment, as I am sure many of you are, to reflect on a year of monumental significance for the UK government and public sector. This is a year when the public made their voice heard – and the government under Theresa May’s leadership has responded - not just to June’s referendum result but the need for more inclusive growth - to make ‘Britain a country that works for everyone’.
This is a message that really resonates with me, personally. The Autumn Statement was an opportunity to bring Theresa May’s vision to life for those ‘just about managing’ (See this Mirror article where I defined what this means in practice) and take practical steps to create opportunities for those not managing (as I explored recently in the Huffington Post).
Following the Autumn Statement there has been a flurry of exciting new research that I hope might further inform this agenda and inspire the government about ‘where next?’.
Firstly, I was interested to see the CBI’s new research setting out how we could add £208 billion to the economy by 2024, the equivalent to a 10% boost in the size of our economy by bringing the UK’s least productive areas in line with their more productive neighbours.
This chimes with emerging findings from the RSA’s Inclusive Growth Commission, which we are supporting, that found that if all our towns and cities had a GVA per capita in line with the UK national average this would add £192 billion to the economy. We also know from our own research that when it comes to ‘good growth’, where you live matters. And investing in skills, transport and housing are the levers to pull to support places to become more productive and ensure everyone feels the dividends of growth.
Secondly, the Joseph Rowntree Foundation has just published their annual State of the Nation which found there are 3.8 million workers living in poverty in the UK today, the equivalent to 12% of the workforce in 2014-15. What struck me was their message that people on low incomes will not feel the benefits boosting growth and employment will bring unless action is taken to address the cost of living.
This brings me to a more specific problem next, the Poverty Premium. The Personal Finance Research Centre at the University of Bristol has published new research into this issue, where the poorer you are, the more likely you are to pay higher costs for goods and services, for example by using higher cost credit, pre-payment meters and paying to access money.
I have highlighted the Poverty Premium to both government and industry over the past four years – finding robust ways to put a number on the premium has been a key challenge. This important research, which PwC fed into, finds the average cost of the Poverty Premium is £490 per household each year but the costs vary depending on how the problem manifests itself and where the household is based (£84 of the Premium relates to where people live).
To me, a country that works for everyone means not being penalised for being on a low income or living in a deprived area. And there’s lots that the Government can do to address the Poverty Premium, alongside employers to help citizens, staff and customers to manage their money.
We hope that by bringing together fresh thinking about how growth can be shared more widely, Britain can be, in 2017 and beyond, a country that works for everyone.
Into 2017 we are exploring practical ways of delivering inclusive growth at PwC. We are hosting both a major Joseph Rowntree Foundation conference on the role of cities in delivering inclusive growth and a series of roundtables led by the think tank Demos addressing social, political and economic exclusion, where globalisation is not seen as a positive force.