Recession assessed and route to recovery detailed

Tue, 15 Dec 2009

The Work Foundation, an independent authority on work and its future, has published a paper analysing how far the UK is from recovery and what policies are required to bring it about.

Recession and Recovery examines if we have yet reached the economic turning point in the recession and assesses how long it might take to reach pre-recession levels of output and employment. It charts which jobs and industries have suffered the most and demonstrates where the new jobs will emerge between now and 2020.

The study, by associate director Ian Brinkley, is part of a two-year programme of detailed research to identify what is required to create a thriving and sustainable economy by 2020. Reviewing the UK’s current situation, he outlines the likely factors that will determine growth over the next decade.

He argues that the labour market recovery is likely to be faster than the recovery following previous downturns, citing three reasons:

• the massive government fiscal and monetary stimulus combined with direct intervention in the banking sector

• welfare reforms along with effective national and local labour market interventions introduced by successive governments since the last recession

• more flexibility around pay and hours with a greater willingness to engage actively in addressing long-term worklessness.

In what he describes as “industrial activism”, Brinkley outlines the top priorities that should help shape recovery in the 2020 economy: “First, the finance sector should never again be able to threaten destabilisation of the whole economy and risk a second Great Depression.

“It should be capable of supplying long-term capital at competitive prices to the expanding knowledge based industries and enterprises of the future. If existing institutions are judged incapable of doing so, we must think about whether new ones are needed to fill the gap.”

The report, Recession and Recovery, is available at www.theworkfoundation.com