Think tank urges government to ‘boost it like Biden’ with £47bn investment in economy

A new report has called for £47 billion investment across the economy to boost post-pandemic growth.

The report released today by progressive think tank the Institute for Public Policy Research says the government must ‘boost it like Biden’ by implementing large-scale investment across the economy, including £30 billion for green projects and £17 billion in social infrastructure, such as health and care.

Earlier this year US President Joe Biden approved a £1.4 trillion economic relief bill aimed to help Americans recover from the impact of the pandemic via a one-off direct welfare payment to the majority of households.

The report laments that the “wealthiest have grown even wealthier” during the pandemic through the rising prices of their property and financial investments, while two in five workers have had real terms pay cut since 2009.

It argues that, as in the US, such policies will push the economy toward full employment, so that companies “compete for workers rather than workers competing for jobs”, and that earnings and working conditions will consequently improve across the UK.

It proposes funding these investment measures via a one-off windfall tax on firms that made “excessive” profits during the pandemic.

Since the pandemic began, six tech firms have seen their profits triple, adding more than $4 trillion to their combined market value. Many pharmaceuticals, healthcare and gaming companies also made significant gains, while most small businesses are more likely to have closed or to have relied on government loans during lockdown.

The report also recommends the creation of a “citizens’ wealth fund” from tax revenue would help “rebalance power” and “spread prosperity” through “strategic” investment.

It also said the UK’s failure to respond to local needs was highlighted by tensions between devolved leaders and Whitehall during the pandemic, and that the stark regional inequalities must be resolved through equal access to investment and decision-making.

Carys Roberts, IPPR executive director, said:

“The UK suffers from concentrations and imbalances of power that are both a cause of some of our economy’s problems, and a barrier to solving them. The pandemic must mark the end of this era of growing inequality and the beginning of a new one, in which sharing opportunity across people and places is a core objective of economic and social policy.

George Dibb, head of the IPPR Centre for Economic Justice, said:

“During the pandemic, we clapped for key workers, but our report shows that even before Covid-19 two in five of those in work had seen a fall in pay. The UK must target full employment, where instead of workers competing for jobs, employers fight to attract workers.