UK Day One Project

🚨 NEW BRIEFING Ahead of the autumn budget, Aveek Bhattacharya of Social Market Foundation has set out one way the Chancellor could raise money for investment while boosting public health and economic growth. All taxes are unpopular, but tobacco and alcohol taxes are the most and joint-second most popular taxes amongst the British public, while a majority believe gambling should be discouraged. Evidence shoes the "regressive effects" of these taxes are overstated. Meanwhile there are huge public health benefits from reducing alcohol and cigarette consumption, which would disproportionately benefit the most vulnerable groups in society. The new government has the opportunity to follow in the footsteps of the previous Labour administration in using alcohol and tobacco taxes to boost public finances and public health. This could free up £1.5bn per year for much needed investment in the UK. The Chancellor will deliver her first Budget on 30th October. This is a huge opportunity to boost public finances, support public health and grow the economy. Read the full briefing here: https://lnkd.in/e2rckWFM

Today we release the results of our UK Growth Survey, as exclusively covered by Archie Hall at The Economist We polled 44 pro-growth economists, think tankers and researchers to ask them what the new government should do to pursue growth. Some of the key insights include... 1) Planning reform was far and away the top priority, according to our experts. However, respondents largely insisted that the growth impact will depend on building housing and infrastructure in or near existing areas of high productivity, particularly London and the Southeast. 2) Nuclear energy came second. Energy cost is viewed by some as the main driver of Europe's economic ills vis à vis the US. Electricity supply is particularly important given rising demand for electricity arising from heat pumps, electric vehicles and AI data centres. Nuclear is favoured due to its supply of continuous baseload power, which is essential for industry. 3) However, respondents were more divided about whether the UK should increase non-nuclear renewable energy investments. The UK's 'green tech potential' was generally deemed 'highly overrated', despite the current government’s prioritisation of green jobs. 4) When it comes to UK strengths, the economic potential of London, the Southeast and the 'Golden Triangle' were generally viewed as 'underrated', whereas the university sector, creative arts and green tech were viewed as generally overrated. 5) However, nearly all of the suggested theories for UK weakness were considered to be 'overrated', in particular the idea that startups struggle to access capital, and the idea that we are too dependent on financial services. 6) Respondents favoured increasing high skilled immigration and pursuing closer alignment with the EU to boost trade. Both of these are more politically contentious than some of the other proposals, but the expert view was almost unanimous. increase non-nuclear renewable energy investments. The UK's 'green tech potential' was generally deemed 'highly overrated'. 7) When it comes to UK strengths, the economic potential of London, the Southeast and the 'Golden Triangle' were generally viewed as 'underrated', whereas the university sector, creative arts and green tech were viewed as generally overrated. Read the full thing here: https://lnkd.in/eFP4YR4z

🚨 New Briefing 🚨 Sanjush Dalmia, Arthur Baker, and Andrew Graves make the case for rethinking how government invests into R&D. There are two categories of R&D funding: push and pull mechanisms. Push Mechanisms such as tax credits and grants are designed to directly increase the supply of R&D by subsidising research activities. The UK government currently supports business R&D primarily through two push mechanisms: R&D tax credits administered by HMRC and grants issued by Innovate UK. These approaches are valuable and necessary but have limitations, and may not be the best solution for every challenge. Pull Mechanisms such as innovation inducement prizes and advance market commitments (AMCs) can be more effective in specific contexts. Innovation inducement prizes are financial incentives offered to organisations as a reward for solving a pre-defined technological challenge. AMCs are agreements for funders to subsidise the purchase of a certain quantity of a product at a certain price once it is developed, to incentivise R&D and manufacturing. Pull mechanisms offer several advantages: - They can shape markets, directing R&D towards socially beneficial outcomes. - Since payments are only made when a solution is successfully developed, the financial risk is shifted to private firms rather than the taxpayer. This incentivises firms to work on projects which they believe are more likely to be successful. - By involving end-users and customers early in the process, pull mechanisms can accelerate the uptake of new innovations in the market. - Pull mechanisms could stimulate greater private investment in both R&D and manufacturing, driving faster growth. Empirical data demonstrates that pull mechanisms, particularly innovation inducement prizes, effectively attract new private R&D investment rather than merely reallocating existing funds. The UK government estimates that for every £1 of direct public R&D spending (largely via push mechanisms), between £1.96 and £2.34 of private R&D investment is generated in the long run. By contrast, a DARPA-led innovation inducement prize in the USA generated an astounding £50 of additional private R&D investment for every £1 of public funding. However, despite these promising developments, Innovate UK lacks an explicit mandate to innovate with funding mechanisms on a larger scale. This gap in its mandate limits the frequency and scope of new funding approaches, which means that in practice, innovation with funding mechanisms is rare. We want to change this. Read our briefing here to find out more: https://lnkd.in/dGnANMKm

💡 Could a next-gen geothermal solve the UK's clean energy needs? 💡 The case for next-gen geothermal by Tim Lines, Daniel Merino-Garcia, Drew Nelson, and Keegan Harkavy. Traditionally, geothermal energy was limited to a few geological locations where heat naturally rises to the surface. But recent advancements have expanded the potential for geothermal power. These innovations may now enable next-gen geothermal energy in places like the UK. The UK boasts a diverse range of geothermal resources, from direct heating applications to power generation. There is particular potential in places like the South-West, North-East, and Northern Ireland. Next-generation geothermal energy is likely currently undervalued and underfunded, despite its significant potential. As of 2019, global investment in geothermal energy amounted to ~$1.5 billion, making it the least funded of all traditional renewable energy sources. An opportunity is clearly being missed. With current technology, about 20% of the UK’s energy needs could be provided by next-generation geothermal. This scale of geothermal build-out could directly replace over 45% of the UK's current fossil power generation. Next-generation geothermal power offers multiple advantages: it is clean, has a small surface footprint, can be built rapidly, offers always-available power, load-following capabilities, and can scale from single MW installations to dozens of GWs across a grid. Because it is constructed by the existing oil and gas drilling workforce, it can be scaled up without building new factories or creating new supply chains. In addition to clean electricity and heat, it produces hot water as a byproduct, which is ideal for district heating networks. Importantly, next-generation geothermal can be built fast, which makes it helpful for the UK’s 2030 and 2050 net-zero goals. Currently, Fervo Energy can drill a new geothermal well in as little as 21 days. Current challenges—primarily cost and awareness—can be swiftly addressed through targeted government intervention. To prioritise next-generation geothermal energy, the UK should: 1️⃣ Raise awareness of geothermal as a renewable firm power and heat solution Unlock specific regulatory and legal bottlenecks that currently obstruct development 2️⃣ Make sure geothermal can fully benefit from Contracts for Difference incentive mechanisms 3️⃣ Issue a policy statement promoting enhanced geothermal expansion 4️⃣ Allocate new funds for active government initiatives to facilitate  geothermal development. Full briefing here: https://lnkd.in/dnGVknZc

🚀 NEW BRIEFING 🚀 The Government could save £30m, boost scientific progress and economic productivity by reforming academic publishing. In our latest briefing, Sanjush Dalmia and Jonny Coates argue for publishing taxpayer-funded research before going to journals. The UK's current academic publishing system slows down innovation and growth, and existing government intervention upholds the status quo. Reforms could enable significant cost-savings and accelerate scientific progress. There is a huge opportunity for the new Department for Science, Innovation and Technology Secretary to change this by implementing “Plan U”, mandating the publication of all taxpayer-funded research as “preprints” before they are submitted to academic journals. Thanks Research Professional news and Times Higher Education for covering the proposal! https://lnkd.in/ejR_3ufP You can read the full briefing on our website: https://lnkd.in/epjCADk3

🚀 NEW BRIEFING 🐖 UK Pensions could unlock £ billions for UK R&D, supercharging UK growth, argues Zachary Spiro The UK lags the US for overall VC funding, even when scaled for GDP. Only 10% of UK VC funding comes from pensions, compared to 72%. This implies that UK pension funds are signficantly underinvesting. This means that UK firms are losing out on a critical source of capital. It also means that pensioners don’t benefit from the enormous growth achieved when businesses scale successfully. This is lose-lose. If you are Brit with a pension pot, you make less money. If you are a UK start-up, you get less finance. Returns for Canadian, US and Australian pensions outstrip those in the UK. To address this, the new Government should change pension regulations by: 1) Independent benchmarking, to force fund managers to compete with global funds 2) Require pension trustees to consider fees in the context of net returns, rather than fees alone These changes would lead to new investment structures to unlock venture capital, but can be done with existing ministerial powers. Read the full briefing and recommendations here: https://lnkd.in/eSFw9cgZ

🚀 NEW BRIEFING 🚀 Anthony Finkelstein, former Chief Scientific Adviser for National Security and president of City, University of London and Laura Lungu of University of Cambridge set out a plan to bring S&T talent into government. The new government needs a Civil Service that is better equipped to deliver its missions. A key part of this is talent: we need channels to bring S&T expertise and capacity into different parts of government. We set out a 10 point plan for bringing S&T talent into government, including: 1. Making policymakers good 'customers' through S&T literacy 2. Enhanced engagement with national academies 3. A single cross-government 'fast-response advice' scheme 4. Power-up existing UKRI fellowship schemes 5. Industry & university secondments 6. Expand S&T fast stream beyond STEM degrees 7. Establish 'innovation placements' from start-ups 8. Develop 'shadow' Science Advisory Committees 9. Review grading structures for S&T roles 10. Commission review of UK science capacity in strategic/security areas Read the full briefing here: https://lnkd.in/eArTPHQP

Have you heard of Tempsford? At the junction of the East Coast Mainline and the planned East-West Rail line, Tempsford could be the perfect place for one of the new government's New Towns. Kane Emerson and Samuel Hughes make the case in our latest briefing. The new Labour government has committed to delivering 1.5 million new homes and a generation of new towns across the country. This means we need to get building, quickly. But we also need to build where there is the most pressure on demand - not least to reduce homelessness. Not all new towns are equally successful. Proximity and transport links to areas of high economic activity is key. Edinburgh New Town (pictured) is a great example. So where should this government build new towns? A good starting place is existing rail links, particularly where there are opportunities for value uplift - such as the Digswell Viaduct bottleneck, which requires significant investment. To address the housing crisis, this government will need to build several new towns. Tempsford offers a great place to start: it is connected to the north, south, east and west, and close to London and the Oxford-Cambridge arc. The government will need to act fast. With focus, a hybrid bill could be passed this year. New towns not only house people, but show us what is possible: we can once again be a country that build things. Read the full briefing: https://lnkd.in/eZ3W_QUm

This week Ed Miliband, the new Secretary of State for the Department for Energy Security and Net Zero, announced this government's priorities on energy and climate. In our latest briefing, Tone Langengen of Tony Blair Institute for Global Change and Rian Whitton of Bismarck Analysis outline a firm power strategy for the UK. What does this mean? Firm power refers to capacity energy capacity that is reliable and available at all times. This is particularly important for manufacturing but also the industries of the future - like AI data centres. The UK's growing dependence on wind and solar, decommissioning of nuclear power stations, and expected growing electricity demand, means that there is an urgent need for reliable and affordable electricity supply. We cannot affordably hit net-zero without firm power. The solution? The new government needs to hit the ground running on nuclear. This means learning from best practice in South Korea and fast-tracking approvals of reactors. It also means empowering GB Nuclear and reforming planning. Up until now, the UK has been decarbonising on easy mode. With EVs, heat pumps and AI data centres, electricity demand is set to soar. Nuclear power requires upfront investment but it opens up fresh options for industrial policy. Read the full briefing: https://lnkd.in/esQYrN8m

The new Chancellor could boost UK GDP by 4.4% with this one simple trick... In our latest briefing, Lucia Coulter, Lee Crawfurd & Tammy Tan highlight the economic and social cost of childhood lead poisoning, a hidden epidemic which costs the UK 4.4% of annual GDP. The UK’s passive surveillance system fails to detect 99.9% of lead poisoning cases, leaving children to continue to be poisoned and failing to prevent future cases. The new government has a huge opportunity to protect children's health, boost growth and reduce strain on the NHS. The new health secretary Wes Streeting should increase blood lead surveillance, mandate reporting and develop a data repository. And the government should amend the proposed Renters Reform Bill to require landlords to test for and report the presence of lead paint to renters. Thanks to Center for Global Development and Lead Exposure Elimination Project for lending us their expertise to support the new UK government. Read the full briefing here: https://lnkd.in/e8ZizxxM