Political reform alone will not be enough to create a prosperous and egalitarian society. This also demands a clear break from the neo-liberal, public-is-bad/private-is-good interpretation of neoclassical economics, which has underpinned the policies of all recent governments. But this must not mean resurrecting public-is-good/private-is-bad dogmas, which led to failure and disenchantment in the past. For the Government to function effectively, debt must be honestly defined and the budget deficit kept within limits compatible with borrowing at competitive rates, but this must be done in a way which protects all sections of society.
Fostering synergies between the public and private sectors in a predominantly market-driven economy, while ensuring prosperity is spread as widely as possible, is the best way to promote well-being for all. But this challenges basic assumptions which underpin the neo-conservative world view. A new, collaborative approach to economic leadership is needed with fair and effective taxation, reform of business governance, and skills and investment policies to drive a globally competitive, knowledge-based economy.
What Went Wrong?
New knowledge and technologies shape economic development but their impact is universal and cannot explain the dramatic increase in inequality that has occurred in the UK. The true explanation is that politicians have abandoned a mixed economy as the means, and public welfare the objective, of economic policy and have locked us into a policy straightjacket incompatible with social justice and ill-suited for addressing the challenges of global competition and the demands of the emerging knowledge economy.
In the 1950s and 1960s, both sides of the political divide agreed that the state should play a leading role in ensuring prosperity. The NHS brought improved health, slums were replaced with social housing, and full employment generated rising living standards for most people. Manufacturing played a major role, which spread prosperity between regions, and by the 1970s, the UK had become the second most equal of the major European nations. But under Thatcher and Blair, this achievement evaporated. On the widely accepted GINI index, the UK fell to 0.35 by 2013, coming 23rd out of 27 OECD countries in terms of equality, while a cluster of Nordic countries achieved ratings of around 0.27.
Defenders of the neo-conservative model assert that the negative impacts of inequality are more than balanced by faster growth, but OECD figures show the opposite. Nine of the 12 OECD nations with the greatest income equality (Iceland, Norway, Denmark, Finland, Belgium, Austria, Luxembourg, Sweden and the Netherlands) enjoy higher average incomes than the UK. IMF studies demonstrate a robust correlation between greater equality and faster and more durable economic growth, while the OECD has estimated that growth in the UK would have been a fifth higher over the period 1985-2005 had income inequality not increased.
Shocks and globalisation
Britain joined the European Economic Community to access fast growing markets. Since then, a series of shocks have shaped how we interacted with the emerging globalised world economy. North Sea oil and Mrs Thatcher’s liberalisation policies undermined manufacturing in favour of services. Supply side policies designed to promote manufacturing were replaced by inward investment promotion based on the UK’s membership of the Single Market. The boom in financial services, as banks launched into risky global speculation, made the UK increasingly dependent on a London-based sector which employed few people, was highly mobile and acutely vulnerable to abrupt changes in investor confidence, such as led to the banking crisis of 2008.
Crisis and austerity
In response to the crisis, Gordon Brown encouraged the Bank of England to pump £450 billion into the private banking system (through so called “quantitative easing”) and reduce the bank rate to 0.5%. While this helped stave off recession, it greatly increased public debt. It also inflated the price of equities and housing as private banks channelled extra liquidity into low-risk assets rather than business recovery – enriching those with property and shares at the expense of poorer people who depend on pensions and savings account interest.
From 2010, the Coalition sought to reduce the accumulated public debt by putting the emphasis on cutting public spending. Even by its own parameters, this approach clearly failed. It never achieved the predicted reduction in the deficit but hit those who depend most on public services. While employment held up, real wages, job security and productivity fell, threatening the prospects for future growth.
The Government should have reflated the economy by allowing public authorities to take advantage of very low long-term interest rates to upgrade infrastructure and build social housing. But neo-conservatives saw the crisis as an opportunity to cut public provision and the political establishment refused to challenge the dominant orthodoxy by turning to the public sector to stimulate growth. At the same time, taxes should have been increased to reduce the budget deficit (the difference between annual income and expenditure) while protecting essential public services.
Instead, the Government held down fuel tax duty, at a cost of over £40 billion between 2010 and 2018, cut Corporation Tax to almost the lowest rate in the industrial world and protected the owners of the most expensive homes from realistic levels of council tax – while doing nothing meaningful to tackle rising homelessness.
While the number of people in work rose, many faced a sharp deterioration in the quality of employment, with over a million people working but earning so little they had to depend on benefits to house and feed their families. Austerity created an economy where low wages, insecurity and one-sided, zero hours contracts encouraged employers to take on and lay off staff rather than invest in new skills and machinery. As a result, productivity scarcely increased over the following decade, while incomes fell behind the growth in GDP.
The Referendum and after
Then, in 2016, the decision to leave the EU undermined the foundation of an inward investment strategy, which had been the central plank of neo-conservative economic strategy for the past forty years and threatened our capacity to bargain with China, US and the global companies dominating the fastest growing business sectors. And it called in question the legal system underpinning many of the remaining elements of the social market, opening the door to a new wave of neo-conservative attacks on social provision.
So What’s to be Done?
Two things must be done to turn the tide. First, we must regain the capacity to protect our national interests in the evolving global economy by rejoining the European Single Market, the most powerful trading block in the World. And, second, we must work towards a strong, diversified, knowledge-based economy by building a new and constructive relationship between government and the productive sector focused not on speculation and short-term profit, but on sustainability and public needs.
Radical Reform Proposes:
- Partnership-Based Economic Leadership
- Honesty in Public Finance
- Fair and Effective Taxation
- Secure, Well Paid, Productive Work
- A Robust and Diverse Economy
- Investment in Skills and Infrastructure
Partnership-Based Economic Leadership
Experience around the world shows that a predominantly market economy with an environment that favours long term investment, learning and the deployment of resources into growth areas is the best means to generate rising living standards. To help achieve these aims we propose that an Economic Development Council be created at the national level made up of representatives of employers’ organisations, trade unions and the regions.
This should not plan but bring government and the social partners together in support of a broad-based development strategy. It should explore emerging economic opportunities by commissioning research and making recommendations to government through a statutory right to publish independent reports and meet periodically with the Prime Minister and senior ministers. Addressing the country’s serious deficits in training, Research and Development (R+D) and investment in the regions should be high priorities. The Council should also contribute to identifying priority areas for research, to help guide public funding relevant to medium and long-term business growth.
The Government should develop a strategy with a demanding timetable for reducing regional economic disparities through enhanced funding for education, training and infrastructure in disadvantaged areas. At the same time, a network of powerful Regional Development Agencies (RDAs) should be created to work under the aegis of the proposed regional tier of government to stimulate business growth and job creation in regions outside London and the South East. These should work with employers, trade unions, universities and local planning authorities to promote development across all sectors, with a special focus on skills and investment in sectors capable of generating high quality jobs and export led growth.
To support the Development Agencies, a Regional Development Bank should be created with headquarters in one of the regions to work alongside the proposed £2 billion Scottish National Investment Bank. This should provide long-term equity finance for small and medium sized businesses in poorer regions. In those with income above the national average, the bank should focus on knowledge-based start-ups and small companies with growth potential and work closely with research-strong universities and institutes. The Regional Development Bank should be required to consult with the RDAs and to take their recommendations into account in formulating its priorities.
Honesty in Public Finance
Debt should be maintained at a level which preserves the capacity to borrow, while protecting public services through careful management and balanced tax increases. The Treasury’s definition of public debt should be reformed to make it easier for government to invest in marketable assets such as power stations and energy storage and for local authorities to invest in social housing.
The practice of off-loading the obligation to repay borrowing for investment projects was developed in the 1980s by left-wing Labour controlled London boroughs to circumvent restrictions imposed by Mrs Thatcher and at that time was denounced as financial charlatanism. It was later taken up by the Blair Government in the form of the Public Finance Initiative (PFI), at a time when US and British financiers were selling off interest-yielding housing debt through so called “securitisation”. Despite the 2008 banking crisis, which resulted directly from securitisation, subsequent Coalition and Conservative governments continued to develop opaque mechanisms for shifting the obligation to repay debt from current voters onto the shoulders of future consumers.
They sold off outstanding student loans at a discount (ignoring the fact that this would eventually massively increase borrowing), imposed a fixed 60-year obligation to repay the cost of building the Hinkley C power station on consumers (whatever the future market price of electricity), and are now exploring new devices to finance the construction of nuclear power stations, despite the fact that this could be achieved transparently and at much lower cost by issuing long-term, low-interest government bonds.
To limit the scope for cushioning current expenditure at the expense of future taxpayers and consumers, the Office of Budget Responsibility should be charged with ensuring transparency by identifying off-budget spending initiatives where the government in reality remains ultimately liable. The Office of National Statistics should be reformed to prevent a repetition of the scandal of its having failed for years to highlight the obvious fact that sums paid to universities out of student loans but never repaid would eventually have to be reflected in the public accounts.
Fair and Effective Taxation
Calls for changes in the tax system to create a fairer distribution of income and wealth are regularly met with assertions that the UK is over-taxed and that higher taxes would inevitably lead to lower economic growth. But OECD figures do not support this conclusion: government revenue as a share of GDP among 35 OECD member countries averages 45%, with the UK, at 38%, being the fifteenth lowest. Corporation Tax, at 19% (compared with an average of 24% across the OECD), is already the lowest among comparable OECD member states, apart from Ireland at 19%, and is set to fall to 17% in 2020 at a cost to the Exchequer of £12 billion over the following two years, according to HMRC.
At the same time, the UK’s main top rate of tax, at 45%, is lower than the rates in Austria (59%), Australia (55%), Denmark (56%), Finland (55%), and Germany (55%), all of which have higher income per head than the UK. Experience in these countries belies the claim that modest increases in tax on higher incomes would lead to an exodus of capital and skills, as they are all magnets for investment and skilled workers from around the world.
To achieve an appropriate balance between spending and revenue, increases should be made in both direct and indirect taxation, with the focus on taxes which are progressive and difficult to avoid. We accept that it it will be necessary and prudent, to increase taxes in a balanced and reasonable manner to rebuild essential public services and ensure that the foundation exists for future economic growth. Corporation Tax should be increased to bring it into line with those of our main trading partners and a carbon tax phased in, with transitional arrangements for sectors which are carbon-dependent and exposed to international competition.
Increasing compliance and tackling exemptions
All things being equal, a lower rate of tax with a higher level of compliance is far preferable to the opposite. To achieve this, the resources available to HMRC should be increased, a measure which would more than pay for itself through improved compliance. A determined campaign is needed to reduce avoidance, with the Government estimating that some £30 billion of tax due is never collected and that the black economy costs society a further £60 billion of lost revenue. Immediate steps are needed to ensure that existing legislation works as Parliament intended by closing loopholes, stepping up efforts to ensure transparency and tackling tax minimisation through devices such as trusts.
Public revenue could be substantially increased by curtailing tax exemptions to provide extra funding for priority policies and lead to greater transparency, equality and fairness. A stringent review should be carried out of all individual and corporate tax exemptions to ensure they meet public interest criteria and are equitable. The yield from income tax was £182.1 billion in 2017/18 with exemptions (excluding those directly designed to protect people on low incomes) costing the Exchequer over £200 billion a year. Inheritance tax exemptions should be reformed to raise revenue, ensure that large estates pay their fair share and encourage inherited wealth to be spread more widely.
Allowances on pension contributions cost the Treasury £23 billion in 2016/17. The Centre for Policy Studies has described this system as: “crude and mis-directed” and as doing: “little to encourage a savings culture amongst younger workers” – with 68% of relief going to higher and additional rate tax payers. Tax relief on pension contributions should ensure that pensioners have financial security and independence in old age, not create an avenue for tax minimisation for those who are already well-off. To that end, higher rate tax relief on contributions should be removed, saving some £7 billion a year, and the ceiling on the maximum tax-exempt pension fund reduced from the current limit of £1.03 million to £800,000 (which would currently support a pension, with the basic state pension, of about £40,000 a year).
ISAs, at an annual cost of £2.75 billion, should be reformed as should exemptions for donations to registered charities, which cost the Treasury £1.9 billion a year and are based upon a system which is among the most lax in the developed world. According to the Financial Times, a gift to a charity of £1 million by an additional rate tax payer actually costs the donor £435,000, with the balance of £565,000 coming from public resources. Research in the UK and the US indicates that tax exemptions have little effect on the level of charitable giving, while often directing resources to causes which are of little or no value to society.
While the UK itself has a fairly transparent tax system, the ability of financial institutions to outsource secrecy to Crown Dependencies and British Overseas Territories puts it at the centre of “the largest tax secrecy network in the world”. A determined drive to tackle tax evasion embracing all British territories should be carried out as part of an international effort to curtail tax havens. At the same time, measures should be adopted to prevent foreign-based companies which are active in the UK transferring profits to low tax locations abroad.
Secure, Well Paid, Productive Work
The labour market has changed enormously since 1979 because of legislation promoting flexibility, globalisation and new technologies and work organisation. Trade union membership has halved and lifelong employment has been replaced by self-employment, short-term contracts and part-time work. Flexibility can be beneficial, helping resources to flow into fast growing areas of the economy and giving individuals wider choice. But in the absence of proper regulation it encourages exploitation and impedes productivity growth, the key to future prosperity.
Ending low pay
Low pay blights lives and hinders productivity. The minimum wage should be raised progressively to the Living Wage Foundation’s Living Wage and legislation enforced with far greater vigour in cafes, clothing workshops, car washes and nail bars, which often employ vulnerable people. HMRC has the central role in enforcing the minimum wage, but agencies such as local authorities, which have regular contact with places of employment, should also play an important role in identifying exploited workers.
The minimum wage must be treated as a stepping stone to better remuneration and not as a ceiling. Trade unions should be given special rights to contact and recruit employees in organisations which fail to demonstrate they are paying all their staff the Living Wage.
A Robust and Diverse Economy
Privatisation and de-mutualisation under Conservative and Labour Governments has reduced pluralism and left large businesses over-dependent on mobile equity capital. This contrasts with the situation elsewhere in Europe, where family, mutual, municipal, investment bank, state ownership and stakeholder-based company governance systems foster long-term planning, research and workforce engagement.
Over-dependence on mobile capital has had far-reaching consequences for the British economy. The tolerance of extreme risk-taking nurtured by shareholder-value ideology, highly levered bonuses and weak governance led directly to the banking crisis of 2008. It has also caused the loss of headquarters functions and skilled employment as companies, many developed on the back of publicly funded research, have been bought up by foreign-based rivals.
Radical Reform stands for responsible economic management based on a vigorous, efficient, knowledge-based market economy with a plurality of forms of ownership, including private, equity, mutual and (where investment returns are long-term or strategic interests are involved) public ownership. A sustained effort is needed to re-balance the economy focusing on measures to address issues of governance, ownership and diversity.
The first step should be to reform company governance by amending the Companies Act of 2006 to give directors a clear responsibility for ensuring long-term sustainability. All companies should be required to spell out, and take account of, stakeholder interests in major decisions affecting employees, host communities, customers and intellectual property.
Companies should not be obliged to include employee representatives on Boards, which can lead to conflicts of interest and impinge on the proper role of trade unions. Rather, large utility and essential service companies (in sectors such as transport) should be required to establish multi-stakeholder supervisory boards, with clearly defined responsibilities where strategic issues are concerned. All other large companies should face the same requirement unless they can demonstrate alternative mechanisms for embracing the interests of their major stakeholders.
Reflecting the government’s free market ideology, the UK has seen more of its major companies taken over by foreign buyers than comparable countries. While in some cases this has bought investment, new skills and access to wider markets, in others it has led to highly skilled jobs being exported, headquarters functions going abroad, and increased vulnerability to exchange rate changes. The neo-conservative dogma that “ownership doesn’t matter” is hard to reconcile with the precipitous decline that manufacturing has undergone in the UK since 1979. To address this problem, the remit of the Competition and Markets Authority should be strengthened to take account of the long-term impact of very large or strategically significant mergers and takeovers on employment, regional development and skills and technology.
Promoting a plural economy
The privatisation of building societies and insurance and pension providers such as Northern Rock, Standard Life and Abbey National, helped trigger the 2008 banking crisis and removed the opportunity for lay people to influence decisions. Though pioneered in the UK, co-operatives now play a smaller role in Britain than they do in most OECD countries – despite clear evidence that they have a higher chance of survival than other start-ups, lower staff turnover and more equal pay structures.
There is much that government can do to encourage a more plural, flexible, sustainable and democratic economy. As a first step, regulations should be introduced to protect the use of the term co-operative and Treasury procedures clarified to remove ambiguities over the right of co-operatives to use member share capital for investment. A 110% inheritance tax concession should be introduced for owners who follow John Lewis’s example and provide for their enterprises to become viable worker-owned businesses. Thought should also be given given to how public procurement could be used to encourage greater diversity in business ownership.
The Government should support the creation of co-operative development agencies at the regional level to help increase the number of consumer and employee-owned co-operatives substantially from the current total of about 6,000. The possibility of promoting co-operative ownership in parts of the rail transport system, where the current privatised system is failing to deliver and where customers (such as commuters) have a long-term stake in the service, should be actively explored.
Dogmatic adherence to the goal of privatisation, which has led to repeated scandals and under-performance, should be replaced by a pragmatic, evidence-based, approach to public ownership, to allow for learning from experience in other advanced economies. The problem with the post-war UK model was not fundamentally to do with ownership but that it produced monopolies that were protected from competition in their own sectors, prevented by law from exploiting opportunities in new areas, and constrained in rationalising their use of resources by a confrontational system of industrial relations.
But social market countries that were free from the dogma of nationalisation as an end in itself have had a very different experience of public ownership. The French state-owned railways put Britain’s privatised network to shame; the regional government stake in Volkswagen has anchored investment in German plants; while the Parador chain has served as model of Spanish hospitality and cuisine for over ninety years, protected from asset-stripping or takeover by anonymous global hotel chains.
We believe, therefore, that public sector equity should play a role in a robust and market economy future for our economy – in sectors such as power generation where returns are too long-term for private investors; to bridge the funding gap for new-technology start-ups; and where strategically important knowledge, skills and capabilities are concerned. Public dissatisfaction with state monopolies in customer-fronting sectors, such as public transport, set the scene for the Mrs Thatcher’s neo-conservative revolution, but replacing one dogma by another is not a sensible response.
Manufacturing’s share in the economy has undergone a catastrophic decline. After leading the world in the industrial revolution, British manufacturing fell from 20th to 188th place on this measure between 1970 and 2015, according to the House of Commons Library. In terms of output, it fell from 6th to 9th place between 2004 and 2015, to end up with the smallest manufacturing sector in relation to its size of any of the major OECD economies.
Apologists for neo-conservatism claim this decline is part of a natural process, as services replace manufacturing, but comparisons show this to be ill-founded. While manufacturing’s share of output fell in Germany from 29% in 1980 to 23% in 2015, in Japan from 27% to 19%, and in Switzerland from 24% to 18%, in the UK, it dropped from 23% to 10%. This in turn has depressed productivity growth as the UK has missed out on advances in technology, which have enabled output per head to rise more rapidly in manufacturing than in other sectors.
The decline of manufacturing has contributed to a huge trade deficit, has exacerbated the imbalance in employment and income between the South East and the rest of the country, has eroded the number of secure well-paid jobs and has increased our vulnerability to external shocks, such as the crisis of 2008. It has also greatly increased the threat from Brexit as financial services, which can readily be moved from one country to another, have replaced manufacturing, which depends on accumulated investment in buildings and plant.
Various reasons have been put forward for this decline, but Belgium, Germany, the Netherlands, Sweden and South Korea, with labour markets similar to our own, have thriving manufacturing sectors and large positive trade balances. An important factor in the UK was the rise in the value of the pound which resulted from Mrs Thatcher’s disastrous decision to use North Sea oil revenues to buy popularity through cut taxes rather than invest for the future (as oil rich Norway has done). More recently, capital inflows resulting from London’s role in the international financial system have inflated the value of the pound, impeding the sale of British goods at home and abroad.
Investment in Skills and Infrastructure
Investment is crucial for growth and the Government plays a key role in creating an environment which promotes it. The UK has failed to keep up with other advanced economies in this respect, coming, according to the OECD, 33rd out of 35 member countries, with investment accounting for 17% of GDP, compared with an overall average of 20%.
Successive governments have responded by seeking to attract companies from outside the EU wishing to sell into the Single Market, a policy which has helped turn the UK into the leading location for foreign investment, boosting jobs, growth and the balance of payments. Opposition to Single Market membership by the Conservatives and Labour threatens these benefits and increases the urgency of finding alternative means of addressing the UK’s long-term investment problem.
Increased resources are needed for training, which attracts mobile investment, with a large-scale drive to improve literacy and numeracy. In April 2018, the Government launched a new levy-based apprenticeship scheme. The record so far has been mixed, as employers appear to be using the scheme primarily to upgrade the skills of existing employees rather than to train up a new generation of qualified recruits. As a result, while expensive high-quality courses are attracting strong interest, the overall number of people taking up apprenticeships has been disappointing and funding for the scheme as a whole is proving inadequate.
With the outflow of non-nationals following the Brexit referendum, it is crucial that everything possible is done to ensure that the needs of sectors facing critical of skills shortage are met, both in terms of numbers and of the quality of the training provided. The failure of British manufacturing to grow as fast as its rivals also reflects cultural factors, including the low uptake of science, mathematics and technology. This demands a long-term partnership approach informed by a thorough understanding of successful experience from around the world.
A public transport system which is comprehensive, reliable, affordable and capable of moving people and goods efficiently is crucial for growth, for tackling climate change and for creating an inclusive society. Rail privatisation failed to deliver the promises made for it as weaknesses in franchising and funding hindered improvements in infrastructure and services. Congestion on our roads also imposes an enormous burden on individuals and society, with traffic data analyst Inrix estimating that it costs drivers an average of £1,168 in 2017 and that it will cost the UK economy £300 billion at 2013 prices in the period to 2030.
Public investment in infrastructure should be stepped up, taking advantage of low cost of government debt, with priority for extending high capacity broadband to all parts of the country. Mega-projects, such as HS2, are promoted by the construction industry but devastate the environment and almost inevitably over-run their budgets. Instead, wherever possible, investment should focus on upgrading existing assets, tackling bottlenecks and introducing improvements, such as in-cab railway signalling technology, to allow more trains to run on the existing tracks.
SUMMARY OF PROPOSALS
Partnership-Based Economic Leadership
- establish a national, multi-stakeholder Consultative Council to explore emerging economic opportunities;
- create similar structures at the regional level, supported by regional development agencies;
- open a regional development bank to invest in SME businesses in low income regions and knowledge-based start-ups elsewhere.
Managing Public Debt
- maintain debt at a level which preserves the capacity to borrow, while protecting public services through careful management and balanced tax increases;
- clarify the Treasury’s definition of public debt to facilitate public investment in power generation and social housing;
- end the use of devices which massage the Public Sector Borrowing Requirement at the expense of future taxpayers and consumers;
- reform and strengthen the National Office of Statistics to ensure all current and future public borrowing is fully accounted for.
Fair and Effective Spend and Revenue
- increase progressive direct and indirect taxes to fund measures to address inequality and boost investment in education and economic development;
- raise Corporation Tax from its current low level, while maintaining business taxation broadly in line with our main trading partners, and introduce a carbon tax;
- remove the ceiling on council tax on expensive properties and explore tax systems which better capture the market value of land;
- carry out a stringent review of all individual and corporate tax exemptions and allowances to ensure they are fair and cost effective in terms of revenue foregone;
- increase the resources for HMRC, reform the law relating to trusts to prevent them being used to minimise tax and promote international efforts to curtail tax havens;
- increase fuel tax annually (taking account of the proposed carbon tax) to reflect inflation plus an escalator factor;
- reform inheritance tax to limit exemptions and encourage wealth to be spread more widely.
Secure, Well Paid, Productive Work
- raise the Minimum Wage to the level of the Living Wage Foundation’s Living Wage and tackle the escalation of top salaries through tighter governance standards;
- introduce a kite mark for best practice in equal opportunities and make this a requirement for public sector contracts;
- give trade unions enhanced rights of access to organisations which do not pay all staff at least the Living Wage.
A Robust and Diverse Economy
- reform company governance to tackle short-termism and ensure boards pursue sustainability;
- require public service companies to establish supervisory boards and in all other large companies, effective mechanisms to represent stakeholder interests;
- promote exchange rate, investment and training policies which encourage the rebuilding of manufacturing;
- reverse the decline in private, mutual and public ownership to create a broader-based and more diverse business environment;
- create regional co-operative development agencies, incentivise proprietors to convert their enterprises to employee-owned businesses, and protect the use of the word co-operative as a business name.
Investing in Skills and Infrastructure
- give the regions new powers to promote investment and entrepreneurship;
- improve access to affordable capital and increase spending on regional transport, education and recreation to attract investment;
- increase resources for education, careers guidance and technical training in communities that have fallen behind;
- increase public sector funding for investment projects whose time horizon is too long for equity finance;
- increase investment in transport and broadband infrastructure;
- expand rail capacity by tackling bottlenecks and promoting in-cab signalling technology;
- tackle congestion through improved public transport, smart road pricing and congestion charging.