Economics

POLICY PLEDGES:

• We shall maintain a commitment to strong public finances by setting a target for average public sector deficits across the cycle of 2.5% to 3% of GDP. This will ensure that public sector debt falls back gradually as a percentage of the overall economy, given trend growth in nominal GDP.
• We shall ensure that there is a sustained increase in both public and private sector investment, so that economic imbalances causing low economic growth are corrected.
• We shall adopt a modern industrial strategy that increases public sector investment as a percentage of GDP with a particular focus on improvements in housing, public transport and vocational training.
• We shall target further increases in the National Living Wage so that it exceeds the OECD definition of low pay (two thirds of median income) within a single parliamentary cycle.
• We shall maintain public expenditure at the affordable level of approximately 41% of GDP, investing strategically across the cycle in frontline public services. We shall avoid unsustainable increases above this level, which would result in yet another cycle of unaffordable spending followed by austerity.
• Since the government is the largest single domestic purchaser in the UK, we shall use the increased flexibility of leaving the European Union to have a government ‘Buy British’ policy where there are credible British suppliers.
• A UK Sovereign Wealth fund will be established making investments of £1-2bn annually on behalf of the British people. Investments will be made in the quoted equity of suitable businesses with at least half the fund being invested in businesses with UK operations, which generate a significant proportion of their sales overseas. Growth in the value of the fund will provide a store of value for future generations.