Thread by @hselftax

And we’re off - @PJTheEconomist introducing #IFS2018

The event is being held under the Chatham House Rule, so while ideas and thoughts can be shared, they will generally not be attributed. #IFS2018

First panel is being chaired by @rhi_kw of @MacfarlanesTax (and @WomenInTax )

NB note the balanced panels throughout. That’s what happens when the organising committee has 5 women, 6 men on it. #IFS2018

The first panel is mainly non-tax people, looking at some of the fundamental issues around an industrial strategy.

Speakers from @beisgovuk, @RainNewtonSmith of the @cbi , Alex Altmann (who is German) from @BlickRothenberg and @tonydanker from Be the Business.

U.K. business investment as a % of GDP is below G7 average, per @CBItweets

(Slide is from a published paper so not breaking Chatham House Rule)

Full @CBItweets paper here

cbi.org.uk/insight-and-an…

#IFS2018

Why is U.K. productivity so much lower than Germany?

Education and training seems to be a large part. More focus on skills than theoretical degrees?

Is the status of working in industry higher in Germany, I wonder? Think how highly their engineers are regarded.

The U.K. apprenticeship scheme seems a small step in the right direction IMO.

How do we change attitudes and culture?

#IFS2018

In Germany, workers have a voice in strategic decisions (through representation on Workers’ Council).

But IMO (not something the speaker said) in the U.K., mistrust between management and unions (“them and us”) is a barrier.

Final speaker is @tonydanker who is happy for his remarks to be attributed “but is confident they won’t be”.

Challenge accepted!
#IFS2018

U.K. has a clear productivity gap between “best and rest” - much more than rest of G7.

Something was going wrong with diffusion of best practice.

@tonydanker at #IFS2018

So “Be the Business” was founded - a business-led movement, recommended by Charlie Mayfield.

Aim is to unite the business community around solving the productivity gap.

@tonydanker at #IFS2018

4 hard truths from @tonydanker :

1. Brexit - ask how Britain will compete for talent after April 2019?

Eg loss of staff in hospitality sector in Cornwall has already happened.

#IFS2018

2. Policy imperative around management and leadership of business.

McKinsey - leadership is key.

Policy community does not generally understand this (@beisgovuk is working hard on this).

Think about incentives for firms.

@tonydanker #IFS2018

Capable, confident and ambitious leaders of firms are key to improving productivity.

Cf education - the head teacher is key.

#IFS2018

3. The SME sector is key, but resources generally not directed to that sector - eg @PwC_UK , business schools etc focus on larger businesses.

R&D tax credit has almost negative incentives for SMEs

Apprenticeship levy could be used for management education?
#IFS2018

4. There is a digital divide.

Lots of work on supply side but how can demand side be switched on? Need independent, buyer-focused service.

@tonydanker #IFS2018

And now on to questions.

Is the balance of power between local/state government a positive factor in Germany? Competition between regions in Germany eg via Trade tax.

#IFS2018

Great question - “suppose there is an engineering graduate from Hull. Should she have to move away to find a job?”

Ie how do we balance London vs Regions - not about reducing London, but increasing strengths of local regions eg improving transport. #IFS2018

Transport links between major cities (eg Manchester/Leeds/Sheffield) make it easier to create a pool of talent outside London.

#IFS2018

How do we connect the education system (at a younger age, not just post 18) to the needs of industry?

Lots of effort is wasted getting kids ready for stuff which goes out of date (eg how to use Excel) - need to focus on resilience and adaptability.

#IFS2018

And make it clear that there are routes other than university - need to make it simpler for young people to make choices.

Beginning to be more discussion among kids about technical education #IFS2018

Now @tonydanker decides to be provocative. Most of 2030s workforce is already in the workforce - how do we invest in that human capital?

Current workforce and management skills more important than education system ATM. #IFS2018

How can we encourage people to stay in jobs (more stability, build experience) rather than moving around?

Invest in people so they have the skills to work anywhere, but want to stay where they are.
#IFS2018

Apprenticeship system not working yet - needs to be more flexible?

Wider point about how to engage with employees is key.

#IFS2018

Value of U.K. capital allowances is low - would it be better to raise CT rate and give more capital allowances?

U.K. headline rate is low and does play a role in attracting FDI. But perhaps need to provide more incentives for capital investment.

#IFS2018

In particular, could be better to focus on more incentives for capital rather than taking CT rate down to 17% - is it low enough already?
#IFS2018

Is Self-employment necessarily a good thing? Should the tax system be encouraging more employment by major businesses?

Interesting question! #IFS2018

“Let’s quickly take the final questions” says @rhi_kw - so inevitably the next q is a 3 minute speech, relevant to the next session not this one! #IFS2018

R&D tax credits, apprenticeship levy - do we have good policies which are not being well-implemented? A good thought to end on. #IFS2018

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