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  Economy And Finance

This policy theme includes our work on macro-economics, trade, tax and finance. Our work in this area has looked at the relationship between fairness and a strong economy. 

Project partners include:
Professor Jagdish Bhagwati, Dr Irwin Stelzer, Sir John Sunderland, Baroness Ashton, Sir Samuel Brittan, Larry Summers, Professor Frank Trentmann, John Monks, Robert Chote, Prudential, Trades Union Congress, Institute for Fiscal Studies, City of London Corporation.

Local Authority Pension Funds – Investing for Growth

The recession and persistent credit squeeze has prompted a fundamental rethink about what we should be investing in and where new sources of finance might come from. Pension funds, including those of local authorities, have become an important item on this new agenda, with much talk in Whitehall and town halls about directing pension fund investment towards upgrading the nation’s infrastructure and kick-starting major capital projects. Local authority pension funds, which hold investments and assets of more than £120 billion, already make substantial investment in the UK. But in this time of fiscal austerity and uncertainty, can they do more to invest for wider economic and social benefit? This unique and extremely timely study tests out what the demand and scope for such investment might be; takes an impassioned look at what has been achieved and can be achieved; highlights the key opportunities and barriers to change; and makes some practical recommendations to government, local authority pension funds and their partners. The study calls for government and local government to do more to promote pension fund investment in projects which provide wider socio-economic benefits: blending and pooling funds and setting up a new independent clearing house for alternative investments.

Give them some credit! A survey of the barriers to funding the UK’s automotive supply chain
This timely and important report is based around a unique in-depth survey of 82 automotive firms operating at all levels in the UK supply chain and employing 18,500 workers. It shows that despite the economic gloom, there is a prodigious ‘window of opportunity’ to create thousands of new jobs in the fast growing automotive supply sector. Expanding the sector will not only support further development of the UK’s multi-billion pound motor industry, but also make a significant contribution to re-balancing the national economy and boosting growth in under-performing regions. However, as this report makes clear, that potential is currently being thwarted by a serious lack of finance, notably from the banks who on the whole have a poor understanding of the sector. The survey, interviews, company profiles and case studies offer a unique insight into what is holding back the sector and provide an evidence base for a more positive dialogue between the automotive supply chain, vehicle manufacturers, the financial community and government. In light of the report’s findings, the author offers a package of practical recommendations, including proposals to enable more finance for tooling, better training, and improvements to government backed schemes.

A nation living on the never-never: policy solutions to reduce Britain’s personal debt mountain
UK personal debt has doubled over the past decade to £1.6 trillion, and is forecast to rise to £2.1 trillion by 2015 (taking the average household debt to £84,365). Total lending is now more than the country’s total output, with “stressed” unsecured borrowing reaching record highs. Do such high levels of indebtedness matter? Which groups are most at risk? How serious will the problem get? Do we have the right regulatory systems and agencies in place to cope with a personal debt crisis? And what alternative policies are on offer to deal with the wider impacts of the UK’s debt legacy? The contributors to this report expertly grapple with these questions and offer new thinking on debt advice and credit management. 

Is Free Trade Fair Trade? New perspectives on the world trading system
This collection of essays argued that protectionism and tariff wars will have serious social and economic effects, especially in developing countries where free and fair trade is often a critical feature of combating poverty and maintaining political stability. The authors looked at what we have learned from the history of trade liberalisation and address what could be done today to ensure that trade policy remains a force for prosperity and social justice. Includes chapters by Professor Jagdish Bhagwati, Professor Frank Trentmann, Professor Alan Winters, Ed Mayo, and Harriet Lamb. 

Fair Tax: Towards a Modern Tax System
The issue of fairness in the tax system is complex, with many competing voices and interests. In a global age where capital is highly mobile, Britain has to ensure that it attracts inward investment and that its tax system does not act as a disincentive to risk taking and hard work. Balanced against this is the attractiveness of Britain because of the amount of revenue raised and invested in human capital and infrastructure. The authors in this collection debate the strengths and weaknesses of the present British tax system and offer their thoughts on how Britain can have a fairer, more modern tax system. Includes chapters by Robert Chote, Dr Irwin Steltzer, Philip Broadley, and Chris Wales.  

Financing the Future
A collection of essays by key experts in the field of developing, financing and planning large scale public infrastructure projects. The contributions offer close analysis of the strengths and weaknesses of a range of different methods of financing sustainable communities; provide a valuable appraisal of specific policy instruments from the perspective of those most closely involved in their use; and draw on international comparisons in order to identify the ways in which such tools can be used more efficiently, effectively and flexibly. Includes chapters by John Healey MP, David Higgins, Dr John Bridge, Gideon Amos, Ray Mills, and Jay Walder. 

Click here for all our publications on economy and finance

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