Policy paper

2010 to 2015 government policy: UK economic growth

Updated

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/achieving-strong-and-sustainable-economic-growth. Current policies can be found at the GOV.UK policies list.

Issue

To make sure the UK can succeed in the global economy, we are taking action to stimulate economic growth while supporting people who work hard and want to get on in life.

Actions

We are taking the following actions to stimulate strong and sustainable economic growth.

Investing in infrastructure

At Spending Round 2013, we committed over £100bn towards infrastructure investment. To support this, we have now set out clear and fully-funded investment plans covering:

  • £15bn investment in the road network - the largest programme of road improvements since the 1970s
  • £5.9 billion to support scientific excellence up to 2021. This is the most long-term commitment to science funding in decades
  • £2.3bn programme of 1,400 flood defence schemes

The National Infrastructure Plan 2014 sets out a coherent vision for infrastructure in the UK. It includes delivery plans until 2020 for infrastructure in key sectors (transport, energy, communications, water, waste, and science).

We have also published an infrastructure pipeline. The pipeline is over £460 billion of planned public and private investment to the end of the decade and beyond. All publicly-funded elements of the pipeline now represent a firm and specific government commitment.

We’re also taking action to support long-term infrastructure investment and drive delivery, including:

Investing in science and technology

We’ve increased capital spending on science over the course of this Parliament by £1.4 billion above the amount committed at the Spending Review 2010, enabling significant investment in projects and research facilities.

Read more about what we are doing on science and technology.

Increasing access to finance for business

We’ve set up the Funding for Lending Scheme, which gives households and businesses greater access to finance by offering strong incentives to banks and building societies to boost their lending.

We’ve also created the British Business Bank. Working with over 80 partners, it uses funds to unlock finance for thousands of small businesses in the UK.

Increasing the UK’s exports and supporting inward investment

Through UK Export Finance, we provide insurance to UK exporters and guarantees to banks to share the risks of providing export finance. Since 2010, UKEF has provided £13.9 billion of support for exports to more than 90 countries. At Budget 2014 we doubled UKEF’s direct lending scheme to £3 billion and cut typical interest rates to the lowest permitted by the OECD.

Through UK Trade and Investment (UKTI), we provide expert international trade advice and practical support to UK-based companies who want to grow their business overseas.

During this Parliament, UKTI has received more resources in India and China as well as funding at Autumn Statement 2014 to help first time exporters. UKTI has almost doubled the number of companies it supports over this Parliament, to almost 48,000 last year. This generated extra sales of £49.1 billion. UKTI is on track to support more than 50,000 businesses by 2014/15.

Read more about the work we are doing to increase UK exports and attract inward investment.

Encouraging businesses to invest

We’ve increased the Annual Investment Allowance, from £25,000 to £500,000, until 1 January 2016, encouraging small and medium-sized businesses to invest in plant and machinery.

Cutting Corporation Tax

To support businesses to invest and grow, we’ve cut the main rate of corporation tax from 28% in 2010 to 23%. In March 2013 we announced that the rate will fall further to 20% in April 2015. This will give the UK the joint lowest rate of the G20 nations, including competitors such as the US, France, and Germany.

Read more about what we’re doing to make corporate taxes more competitive.

Simplifying business regulation

In January 2013 we introduced a ‘1 in 2 out’ system - where no new regulation is introduced unless it is off-set by deregulation of twice the equivalent value. The net cost of domestic regulation on business has already fallen by around £2.2 billion per year.

The Red Tape Challenge has identified 3,200 regulations to be scrapped and improved, bringing over £1,000m in annual savings to business.

Read more about what we’re doing to reduce the impact of regulation on business.

Creating a more educated workforce

We’re continuing to roll out academies and are providing funding for up to 180 new Free Schools, 20 new Studio Schools and 20 University Technical Colleges a year. There are now more than 3,000 academies and Free Schools, as well as more than 20 University Technical Colleges and Studio Schools, with another 68 due to open from September 2013 onwards.

Read more about what we are doing to reform the curriculum and qualifications to make education more relevant to life after school, and how we are investing in skills and apprenticeships.

Making the planning system work more efficiently and effectively

We’re reforming the planning system. This includes publishing the National Planning Policy Framework in March 2012 and cutting over 1,000 pages of planning policy to just 50.

Dealing with long-term problems in the housing market

We’re taking decisive action to revive the housing market, boost construction and support families, developers and institutions to invest in new homes. Building on an existing commitment of £11 billion housing investment in Spending Review 2010, Budget 2013 announced a housing package totalling £5.4 billion, including Help to Buy, which offers 2 schemes aimed at helping those who want to get on, or move up, the housing ladder.

Supporting local growth

We’re bringing the resources under the strategic influence of business led Local Enterprise Partnerships (LEPs) to at least £20 billion in the years to 2021.

We’ve established 24 Enterprise Zones creating around 12,500 new jobs and securing almost £2.1 billion in private sector investment.

We’ve concluded the first wave of City Deals with Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. It is estimated that these will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.

We have so far allocated £2.85 billion through the Regional Growth Fund to help local businesses grow and take on more staff across England. The total investment of private sector support is expected to be £16 billion. Over 100,000 jobs have already been created and a further 480,000 are expected by the mid-2020s.

Read more about how we are rebalancing the economy.

Working with international institutions

We work with a number of international institutions, to help deliver the UK’s economic and financial goals.

Background

We published the ‘Plan for growth’ in 2011. It set out a broad programme of reforms designed to remove barriers to growth across a range of areas. It explained the government’s 4 ambitions, to:

  1. create the most competitive tax system in the G20
  2. make the UK the best place in Europe to start, finance and grow a business
  3. encourage investment and exports as a route to a more balanced economy
  4. create a more educated workforce that is the most flexible in Europe

Read about how we are implementing the ‘Plan for growth’.

Read more about how we are reducing the deficit and rebalancing the UK economy.

Appendix 1: who we are working with

This was a supporting detail page of the main policy document.

We work with a number of international institutions, to help deliver the UK’s economic and financial goals, including the International Monetary Fund( IMF), World Bank, G7, G20, Organisation for Economic Cooperation and Development (OECD), and the Paris Club.

International Monetary Fund (IMF)

The IMF,is governed by its 188 member countries and works to foster international monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The Chancellor is the UK Governor of the IMF and HM Treasury leads the UK’s engagement with, and policy towards, the IMF. The UK has a resident delegation to the IMF, and has an Executive Director who represents the UK at meetings of the IMF’s Executive Board.

World Bank

The UK is a member of the World Bank, which acts as a lender of financial and technical assistance to developing countries around the world.

G20

The UK is a member of the G20, an informal group of 19 countries, plus the EU and international financial institutions. The G20 meets regularly and aims to promote the financial stability of the world and to achieve sustainable economic growth and development.

Each country takes a turn to hold the presidency of the G20, with Russia hosting the presidency in 2013, Australia in 2014 and Turkey in 2015.

The Prime Minister leads the UK representation at the G20, supported at the Leaders’ Summits by the Chancellor. The Chancellor also attends meetings of G20 Finance Ministers and Central Bank Governors.

G7

The G7 is an informal group of Finance Ministers and Central Bank Governors from 7 industrialised nations: Canada, France, Germany, Italy, Japan, the UK and the USA. Representatives from the EU and international financial institutions also regularly attend. The group meets regularly and has informal and formal meetings, depending on economic circumstances. The Chancellor leads HM Treasury’s representation at the G7.

Organisation for Economic Cooperation and Development (OECD)

The OECDworks to improve the economic and social well-being of people globally. Representatives from HM Treasury sit on a number of OECD committees that analyse economic and public policy, including taxation.

We also work to ensure standards on taxation are implemented through an OECD satellite organisation, the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Paris Club

The UK is a member of the Paris Club, an informal group of 19 nations, who are owed money by other countries around the world. The Paris Club attempts to ease the payment difficulties of the countries that owe money, so that they do not default and are able to repay the creditor nations. The Club meets around 10 times a year in Paris.