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The Aldersgate Group, an alliance of businesses that aims to deliver a ‘sustainable economy’, has released a new report outlining a framework for policymakers that can help deliver ‘sustainable growth for the UK economy’.

Released yesterday (7 May), ‘An Economy that Works’ argues that a healthy economy not only relies on job creation and productivity, but also resource security, productivity, ‘sustainable growth and trade’ and an increase in ‘social cohesion and citizens’ wellbeing’.

It sets out a range of recommendations for government to take to help fill the ‘policy vacuum’ before the next general election (May 2015).

Report details

Developed through ‘acombination of literature research and direct engagement with key business and thought leaders’, the report was commissioned by the alliance to demonstrate how the UK can move to a ‘smart, low carbon and resource efficient’ economy that, it claims, can ‘enable the UK to take a lead in the global race’.

Indeed, it warns that if the UK ‘fails to adapt to a changing world, [it] will be forced to play catch up while [its economic] competitors reap the rewards of their own economic transition’.

The report reads: ‘The transition to a smart, low carbon and resource efficient economy is inevitable. It is only a question of timing and the course that will take us there. If we fail to act now, the transition will be largely outside our control. We will be on a rudderless ship that moves from climate crisis, to resource crisis to financial crisis and back again. In other words, things are likely to get a lot worse before they get any better…

‘We advocate a different course, one where we navigate the waters ahead with the skills, knowledge and leadership that will ensure a flourishing transition. The result will create jobs, improve competitiveness and increase prosperity across the whole of the UK. Above all it will work at all levels – environmentally, socially and economically.’

Specifically, the Aldersgate Group set out what it believes are the‘six core characteristics that define success in an economy’: high employment; equality of opportunity; wellbeing at the core; low carbon; zero waste; and enhancing nature.

These could be delivered through the following actions:

High employment

• investing in job generation schemes;
• promoting skills development by providing ‘strategic leadership and long-term direction’, for instance through investment in training;
• using tax policies to make it easier for employers to hire or train additional staff;
• promoting flexible/part-time work to increase the number of jobs available;
• continuing investing in education to help school leavers acquire the qualifications they need to find work.

Equality of opportunity

• promoting equal access to education and increasing graduation rates from secondary and tertiary education;
• reducing income tax and/or national insurance contributions to reduce the cost of employment (while offsetting the loss of government income by increasing taxes on ‘high-carbon’ and ‘scarce’ natural resources);
• maximising government revenue through ‘enhanced collection and enforcement of UK tax receipts’;
• examining living wage levels to help all those in employment to cover basic costs; and
• addressing forms of ‘exclusion’ such as ‘lack of access to capital, resources and services’.

Wellbeing at the core

• integrating wellbeing considerations into all aspects of policy making;
• measuring wellbeing in a ‘consistent way’ to know ‘what is important and how to influence it’;
• developing an integrated wellbeing indicator to provide a regular snapshot of how the UK is performing;
• strengthening civil society and active citizenship, participation and engagement; and
• focusing the health sector on ‘complete health’, including a stronger focus on mental illness and longevity.

Low carbon

• implementing an ‘effective carbon pricing’ scheme to ‘reduce emissions and raise revenues’. This could be provided through either a trading scheme and/or adopting a simple carbon tax;
• promoting low-carbon technologies and innovation by: focusing research and development policies on rewarding low-carbon innovation (via research grants, innovation prizes, patents and tax credits); boosting feed-in tariffs or renewables certificate systems for low-carbon projects; developing carbon capture and storage; supporting community energy projects; and encouraging a shift to low-carbon transport technologies and models;
• removing barriers to low-carbon behaviour and investment by: introducing long-term policy security to support long-term investment decisions; shifting government subsidies away from fossil fuels and towards low-carbon alternatives; and introducing ‘ambitious low carbon and energy efficiency requirements in infrastructure projects’.

Zero waste

• conducting a study into exposure to material insecurity (starting with sectors identified by the industrial strategy as those most able to contribute to growth);
• requiring environmental product declarations (EPDs) based on a ‘unified methodology’ across the EU;
• creating sector-specific road maps using the industrial strategy model for government and industry collaboration;
• implementing stricter individual producer responsibility;
• setting reuse, recycling, collection and disassembly requirements;
• using landfill bans as ‘the intervention of last resort for high volume, low value materials’;
• setting green public procurement rules specifying more ‘circular’ products; and promoting design that enhances repairability, recyclability and disassembly.

Enhancing nature

• developing a long-term ecosystems recovery plan that ‘values, protects and enhances natural capital’;
• making no net loss of biodiversity an ‘explicit policy target’, and aiming for net gains in biodiversity and protection of threatened ecosystems;
• identifying and avoiding thresholds beyond which biodiversity ‘cannot be restored and/or its contribution to ecosystem services is significantly diminished’ (such as wild fish stock collapse), through the ‘targeted use’ of markets, standards, subsidies, taxes and protected zones;
• ensuring government procurement promotes the protection of nature; and
• including the economic value of natural capital in the national accounts, with a natural capital budget presented by the Chancellor of the Exchequer alongside the fiscal budget.

‘A wake up call for politicians from all parties’

Speaking of the report, its author and Group Director of the Aldersgate Group, Oliver Dudok van Heel, said: “The most recent growth figures are welcome news for the UK economy, but the government needs to ensure that growth is equitable as well as financially and environmentally sustainable. ‘An Economy that Works’ provides some clear policy guidance to achieve good growth.”

Andrew Raingold, Executive Director of the Aldersgate Group, added: “This report is a wake-up call for politicians from all parties. There is a risk that the general public further disengages from politics if the election campaign is all about debt and marginal GDP figures. The next election should be about whether Britain is going harness its innate strengths to become a highly productive, knowledge-based economy over the next Parliament that is the envy of the world. It needs to inspire and empower.

“With ‘An Economy that Works’, the UK can have a growth strategy that is resilient to systemic risk and creates prosperity by delivering solutions to major global challenges.”

Find out more about ‘An Economy that Works’.