OECD economic surveys. United Kingdom.

Description

This 2005 survey of the United Kingdom'seconomy examines the key challenges for translating resilient economic performance into faster growth in living standards. In particular, it looks at housing supply, public services and infrastructure, pensions, childcare, the disability system, and raising skills. The special chapter covers raising innovation performance. Cover -- Table of contents -- Basic statistics of the United Kingdom (2004) -- Executive summary -- Impressive macroeconomic stability but structural performance can be further improved -- Assessment and recommendations -- Chapter 1. Key challenges: translating a resilient macroeconomic performance into faster growth in living standards -- Introduction -- Box 1.1. The fiscal and monetary policy framework -- Recent macroeconomic performance and outlook -- Some slowdown in growth is welcome to contain inflationary pressures -- Risks are mainly to the downside -- Fiscal policy -- Fiscal policy has been important in supporting demand -- 8230 but keeping to the fiscal rules may require adjustments to current plans -- The long-term fiscal challenges -- Impressive macroeconomic performance also reflects flexibility in labour and product markets -- Figure 1.7. Changes in unemployment and manufacturing employment -- Figure 1.8. Growth in knowledge intensive services -- Figure 1.9. Command GDP adjustment to annual average GDP growth rate -- The major challenge is to close the productivity gap -- Figure 1.10. The sources of income differences -- Table 1.3. Productivity growth -- 8230 by improving skills -- 8230 by raising innovation performance -- 8230 by improving infrastructure -- 8230 and by liberalising planning laws -- Reducing large numbers on disability-related benefits is the key to raise labour utilisation -- Figure 1.11. Unemployment and inactivity rates -- Notes -- Bibliography -- Annex 1.A1. Differences between the OECD and 2005 budget projections -- Table 1.A1.1. Difference between OECD and budget 2005 fiscal projections -- Chapter 2. Housing: raising responsiveness of supply -- Assessing the risk in the current cycle -- Figure 2.1. Monetary tightening usually precedes house price falls -- Figure 2.2. Household debt servicing burden -- Figure 2.3. The correlation between consumption and house prices -- Policy measures to increase supply -- Figure 2.4. Projected growth in households and current housing completions -- Box 2.1. Is there room for more housing? -- Policy measures acting on demand -- Box 2.2. Recommendations to improve the responsiveness of housing supply -- Notes -- Bibliography -- Chapter 3. Public services and infrastructure: tracking the improvements -- Figure 3.1. Public spending is still growing fast but should tail off after 2007 -- Spending on health and education can still be made more efficient -- Figure 3.2. Spending and outcomes in health and education -- Box 3.1. The Atkinson review of national account measures of government output and productivity -- The focus is now on administrative efficiency and contestability -- Graduate contributions for universities -- Transport infrastructure -- Under-investment has led to poor quality transport infrastructure -- Capital spending on transport is being increased -- Congestion charging will be part of the solution -- 8230 but local authorities tend to resist its introduction -- 8230 and further growth in public transport is needed -- Notes -- Bibliography -- Chapter 4. Pensions: options for reform -- The current system -- Table 4.1. Pension net replacement rates -- Figure 4.1. The growing importance of the pension credit -- Figure 4.2. The fiscal cost of subsidising private pensions -- Options for reform -- Box 4.1. Mortgage equity release -- Box 4.2. Pensions: policy recommendations -- Notes.