Control of the Energy Sector

In its 2017 manifesto the Labour Party promised to bring energy sector back under public control through a phased approach, which is most sensible. The transition phase is likely to be challenging and will need effective management.

Public policy in the energy sector should target new capacity creation rather than taking over existing and potentially overvalued capacities. 

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Changing Occupational Pension Funds

British employees have traditionally relied on occupational pension funds in addition to Pay-As-You-Go State pensions to provide retirement income. These workplace funds are becoming less able to provide income security for all, let alone promote economic growth and financial stability. A change in state benefits must form the core of any retirement income provision system. If occupational pensions are to form a meaningful part of the change, a number of problems need to be addressed.

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Successful Macroeconomic Stimulus

Modern economies can be stimulated by macroeconomic policies that increase purchasing power. If the stimulus is deficit-financed, the resulting increase in national debt can be accommodated within broad limits. 

This policy brief looks at the conditions that allow for successful implementation of macroeconomic stimulus programmes appropriate for a progressive government.

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Replacing Universal Credit

The Conservative Government elected in 2015 declared an objective of reducing expenditure on working age claimants by £12 billion a year – that is £12 billion from the unemployed, the chronic sick and the low-paid (and their children). The then Labour leadership decided to abstain on the issue. There could be no better example of the bankruptcy of mainstream politics in Britain.

It is doubtful whether existing policies could in fact secure such a reduction in the near future. 

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Citizens’ wealth funds

Since 2008, the question of inequality has moved up the political agenda. This rising concern has yet to translate into policy action. The UK continues to sit towards the top of the global inequality league, while leading forecasters predict a deepening economic divide until 2020.

Citizens' wealth funds offer a positive opportunity to tackle the twin problems of rising inequality and under-investment.

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Price Stability

For four decades British governments have placed priority on maintaining low inflation. Under Conservative governments this functioned as the central macroeconomic policy goal. A Labour government will come under strong pressure to maintain this priority, though it is frequently in conflict with other objectives such as economic growth and full employment.  

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Monetary PolicyJohn Weeks
Innovation, Jobs & Productivity: Supporting Business R&D

Direct and indirect public support (subsidies and tax relief) for business R&D in the UK is higher than most other OECD countries, excluding the US, Korea, Canada and France. Also, the UK support regime relies on both direct grants and indirect support via tax credits with equal measures.

Nevertheless, total R&D expenditure as percentage of GDP in the UK (1.7%) is relatively low compared to OECD countries (2.43%). 

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Public InvestmentMehmet Ugur
Hurricane Irma & Tax Havens

As the National Audit Office confirmed in their last report on the British Overseas Territories, the UK has the backstop financial responsibility for ensuring that these quasi-autonomous and self-governing locations are financially solvent:

"The UK bears the ultimate risk of potential liabilities from its overseas territories.

It is important …. that the UK should reinforce its close working with Territories to manage risks in government finances, disaster and crisis management."

This has particular significance in the context of the devastating impact of Hurricane Irma.

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Publicly Funded Drug Research

It is government policy, not market processes, which cause high drug prices. Patent monopolies have the negative effects that free market oriented economists typically ascribe to government interference in the market. Altering government policy would make drugs cheaper for the NHS and thus increase provision. 

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Social PolicyDean Baker
A National Care Service

The adequate provision of social care is a major issue facing the UK. A near crisis has been triggered by the failures of privatised provision, aggravated by the austerity inflicted upon the NHS. 

However, it is not just a question of providing enough care but also about developing new and different forms of care. 

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Monetary Policy: Beyond QE

Two decades after the granting of independence to the Bank of England to determine its own monetary policy, the doctrine which formed the basis for this policy has been discredited by the financial crisis of 2007-2010 and its aftermath. This doctrine was the New Consensus on Monetary Policy, that monetary policy, principally varying the interest rate at which the central bank provides funds to the money market, can effectively regulate the rate of inflation and the business cycle.

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Monetary PolicyJan Toporowski
Public Sector Debt Management

By June 2017 despite the austerity rhetoric of the subsequent coalition and Conservative governments the debt reached £1.75 trillion. Is this level a debt a problem requiring action by an incoming Labour government?  Need the debt be reduced and is it a burden on current or future generations?

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Fiscal PolicyJohn Weeks