IPPR - Firms providing ‘good jobs’ should get tax cut

30 Nov 2017 09:00 AM

Government’s Industrial Strategy ‘in danger of missing the point’ in productivity push

Small and medium sized businesses which are certified as ‘good jobs employers’ should get a 1% cut in their corporation tax, argues a new report on industrial strategy by the progressive think tank the IPPR today. Citing academic evidence that better job design is the key to raising productivity and wages, the report calls for the creation of a ‘good jobs standard’ under which firms would be accredited for providing jobs with decent pay and conditions, including opportunities for training, career progression and employee involvement in decision making.

As well as the tax cut, firms would be incentivised to achieve the standard by making it a condition for those bidding for public procurement contracts. The report suggests that one of the assessment tests could be a survey of employees on whether the standard had been achieved.

The report argues that the Government’s White Paper on Industrial Strategy, must focus on what it calls the ‘everyday economy’ of ordinary firms where productivity and wages are low. (Government unveils Industrial Strategy to boost productivity and earning power of people across the UK)

The report argues for the creation of a new body, Productivity UK, to drive productivity improvement in the ‘everyday economy’. This would work with sector bodies and Local Enterprise Partnerships to provide training, advice, guidance and grants to businesses to help them adopt new digital technologies and better management practices. It would work with and scale up the new ‘Be the Business’ initiative of the Productivity Leadership Group.

To improve the nation’s skills base, the report calls for the current Apprenticeship Levy to be converted into a ‘Productivity and Skills Levy’ which could be used for wider range of skills training and job redesign aimed at raising productivity.

Michael Jacobs, Director of the IPPR Commission on Economic Justice and co-author of the report, said:

“The Government is in danger of missing the point in its industrial strategy. Its focus so far has been on sectors engaged in technological innovation, like automotive and pharmaceuticals. But productivity in these sectors is already high. The UK’s productivity problem lies in the vast majority of ordinary firms, in sectors such as retail, light manufacturing, tourism, hospitality and social care. Unless the White Paper includes a plan to raise productivity in these sectors, it will simply not be addressing the real issue.”

The report urges the government to make ‘good jobs’ a national goal of the industrial strategy.

Michael Jacobs added:

“Good employers - of whom there are many - know that high quality job design not only improves job satisfaction. It raises productivity and thereby enables higher wages. We need a national campaign to get firms focused on how they can help themselves become more competitive in this way.”

The wide-ranging report, Industrial Strategy: Steering Structural Change in the UK Economy, is being published for the IPPR Commission on Economic Justice. It also recommends:


Sofie Jenkinson, 07981023031, s.jenkinson@ippr.org

Michael Jacobs 07795 333473 m.jacobs@ippr.org

Notes to Editors

The report, Industrial Strategy: Steering Structural Change in the UK Economy is available at https://ippr.org/research/publications/industrial-strategy-steering-structural-change-in-the-uk-economy

The report is being produced for the IPPR Commission on Economic Justice, which brings together leading figures from across society to examine the challenges facing the UK economy and make recommendations for reform. The Commission’s Interim Report, Time for Change: A New Vision for the British Economy, was published in September.

IPPR is an independent registered charity and Britain’s leading progressive think tank. It is dedicated to the better country that Britain can be. With nearly 40 staff across four offices throughout the UK, IPPR is Britain’s only national think tank with a truly national presence. Our independent research covers the economy, work, housing, education, health, migration, energy, transport, devolution and democracy among other areas. www.ippr.org