2022/2023 APPG Work Plan

APPG INCLUSIVE GROWTH

WORKPLAN FOR 2022-2023

As the UK emerges back from Covid, we face a series of interlocking challenges to building a country of more inclusive growth; the economic aftershocks of Covid, the pressure on global supply chains, the impact of conflict in Ukraine, spiking inflation and measures to exit from the fiscal and monetary expansion of the last few years, mean that living standards will remain under acute pressure for the foreseeable future.

The purpose of our workplan for 2022-23 is therefore to zero in on some of the key areas where we can make a distinctive contribution to better policy for green, inclusive growth.

We suggest three distinctive areas of work:

• Working together with our think tank partner, CPP to explore how in the fields of finance, health and place we can create better policy.
• Providing a Parliamentary sounding board for ideas emerging from the IFS Deaton Review on Inequality, which will begin reporting in earnest this year.
• Working with polling partners to establish where public support for inclusive growth measures is highest.

1. Our programme with CPP

(a) Capital for the Common Good: How can private pension investment be a driver of inclusive growth?

Over the last two years, we have run a successful programme clearing the ground for a Commission on the Purpose of Finance.

We have launched a ground-breaking series of reports, and CPP have just completed a survey on the general public’s preferences for how pension savings are invested and plans for publishing the results.

The next steps for galvanising a group of expert voices on pensions for inclusive growth through a series of roundtables.

• Our work has established a clear opportunity to use private pension fund assets to help drive economic growth and build back better. The full roll out of auto-enrolment now means that some half of trillion pounds of new equity investment will soon be available from UK pension savers.
• Last year the Prime Minister and Chancellor issued a joint call aimed at “igniting a big bang” in pension fund investment in UK assets akin to the types of investments seen in Canada and Australia. Their intention is to “unlock hundreds of billions of pounds sitting in UK institutional investors and use it to drive the UK’s recovery”.[1]
• Similarly the recent Levelling Up White Paper argued that local authority pension schemes should invest £16bn into local projects.
• While these two sets of ideas relate to different types of pension schemes, the intended direction of travel is clear – government wants pension assets to do more heavy lifting in driving the UK economy.

The push for more pension investment in UK infrastructure assets coincides with a drive for more sustainable investment globally as it becomes clear that many savers don’t want their investments to harm people or the environment. Institutional investors use the Environmental, Social and Governance criteria (ESG) to respond to these demands – with ESG labelled companies and assets supposed to be beneficial to people and planet. However, ESG is an unregulated market with no agreement about what constitutes an ESG asset and there have been numerous allegations of so called “greenwashing” – where companies pretend to be doing good for the environment when they are not.

In this context, this year’s collaboration between CPP and the APPG will explore

• the public’s willingness, knowledge and appetite for investing in assets that do good for people and planet and
• to better understand the legal, regulatory and policy changes required in order for pensions assets to work better for savers and society. It will therefore build on the CPP’s paper published in 2020 for the IMF and World Bank Parliamentary Forum.[2]

New insight: Understanding the public’s desires on pensions

The first stage of this project will focus on gaining an understanding of the public’s willingness, knowledge and appetite for investing in pension assets that do good for people and planet. The results are likely to have implications for the types of policy initiatives the government is pursuing and for the ways in which the pensions industry thinks about ESG investing.

CPP is now currently preparing a short report based on the survey results which will include high level implications for policy, regulation and industry.

We’re aiming to have a draft ready by the end of March and will reach out to expert stakeholders and journalists at that point.

Roundtable debates and policy recommendations

The second phase of the proposed project will be to host a series of parliamentary roundtables with experts on pensions and sustainable investment. It will bring together politicians, industry experts, policy makers, regulators and academics in order to draw out several recommendations for action. It will build on and extend the small stakeholder group that helped shape the design of the survey questionnaire (mentioned above) and has included: Share Action, the Green Finance Institute, Legal and General and David Pitt-Watson.

We aim to run these roundtables in early summer for 3 or so roundtables with circa 5-10 key stakeholders each. We will then develop a summary report with policy recommendations to publish in early autumn. 

Members of the APPG and/or the experts we invite to the roundtables might want to contribute blogs, articles or essays which could add weight and momentum to the overall body of work that the project will produce. And it could feed into the summary report and recs mentioned above.

This work will create the opportunity in 2023 to build on this year’s work and explore the roles of banks, building societies, credit unions and others that lend money to households and businesses. There are serious questions about whether UK businesses have adequate access to credit – particularly smaller to medium sized businesses which acts as a drag on growth. There have long been suggestions about developing regional banks similar to approaches taken in parts of Europe. On the personal financial side there are questions about whether low-income households – and particularly those on the breadline – are well served by the current banking system which can heavily penalise those in debt and encourage people to use high cost lenders.   This project would explore many of these dimensions to develop ideas for a nimbler and adaptable financial system to help foster inclusive growth.

(b) Health

Covid-19 has brought health inequalities into stark focus but most the attention will be on backlogs and waiting lists as we try and get over the pandemic. Yet this will not address the underlying causes of poor health which prevent people and places from reaching their true potential. This has economic impacts in terms of worse personal finances but also acts as a drag on the economy. The project would seek to understand how we can build prevention back into the system[3] – shifting the focus away from healthcare and towards population health within the context of the most recent legislative developments through the Health and Social Care Bill and the creation of Integrated Care Systems.

2. The Deaton Review

This project, anchored by the IFS and co-funded by the Nuffield Foundation is a big long-term study aimed at understanding inequality of income, health, wealth, political participation, and opportunity; and not just between rich and poor but by gender, ethnicity, geography, age and education.

It will examine the big forces that drive inequalities – from technological change, globalisation, labour markets and corporate behaviour to family structures and education systems.

Over the course of this year, the Review will begin to release quite a large number of reports with policy recommendations.

The IFS Director Paul Johnson, has expressed interest in working with a group of Parliamentarians to provide some sounding board feedback to the Review as this work progresses.

The opportunity for us, therefore is to assemble a small cross-party group of APPG officers to fulfil this role, and to agree formats for discussions with the IFS.

3. Exploring public attitudes to inclusive growth

As we head towards the next election, and with living standards looming large in the public debate, it is likely that the next election could provide the opportunity to persuade the public to vote for a package the measures that helps Britain become a more inclusive country. But what measures will have the best effect, and what does the public see as the most plausible steps to take?

The purpose of this worksteam is, supported by Nuffield College, to undertake the following steps to build and test an ‘expert catalogue of measures’ designed to foster more inclusive growth. The key steps are as follows;

1. Assembling a cross-political spectrum database of experts on inequality
2. Canvassing the experts to build a catalogue of measures they would recommend to tackle inequality
3. Assemble and rationalise these responses into a catalogue
4. Asking a survey group of experts about which measures in the catalogue they think would make the most difference
5. Poll the public on which measures they would find the most plausible
6. Compare and contrast the results, write a paper on it, and shoot to instant fame…

ENDS

[1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1008814/A_Challenge_Letter_from_the_Prime_Minister_and_Chancellor_to_institution__1_.pdf

[2] https://www.progressive-policy.net/downloads/files/Mobilising-pension-wealth_CPP-October-2020.pdf

[3] See previous CPP work on this here: https://www.progressive-policy.net/downloads/files/Beyond-NHS.pdf