 Mynd i, gweld o'r sessions ar gyfer cael ei amserion pannol. Mae'n meddwl peol, ac mae'n gilydd o'r sgwyl fan o'r cwyrddol hynny, bydd ychydig yn rwy'n mynd i ddefnyddio y fflawn aall, a'r cyflym yn cael ei bod yn gwneud yn llwydd na'r bwysig sydd. y gallwn y dynig, bydd o'r gwaith yn y cyd-reifio llunydd, yng nghymru oherwydd ac mae'r hyn yn dweud gan y cyd-reifio llunydd. A'r eu cwmhynol yn ddod i'r cyd-reifio llunydd, y cyd-reifio llunydd yn y cael ei dwyny, ac yn y cyd-reifio llunydd ar y cyd-reifio llunydd, os ydych chi'n gwneud o'r panel llunydd yw'r bobl yn gwneud. Mae'r paradoxau bod y profiwnol yn cael ei digwyddol, ac mae'r cyd-reifio llunydd eich bod yn ddiweddol. Mae'n gwybod i'r gwaith yma yn ymlaen nhw'n fynd i'w fenomin. Mae'n gweithio'n rhoi'n gwneud yma yn y panel, mae'n gweithio'n gwneud hynny o'r maen nhw, gyda Gregory Swates, yng Nghymru yw ysgrifennu'r Ffandau Rhyfledd, ac mae'n gweithio'r panell. Mae'n gweithio, wrth gwrs, Martin Wolff, yng nghymru'r gweithfyrdd gwaith cymdeithasol, mae'n gweithio'r llwyddiad. y cyfnodau cyfnodau ymwyloedd, ac ydych chi'n gweithio gydag o'i gweithio'r gwaith a chael ei nabdiad, ac mae'n gweithio'n meddwl i'r Cymru Economig 2030. Mae'n meddwl i'r Prof Davies Edgerton, Profesor o Fhysgryd yng Nghymch yn Llywodraeth, a Stephanie Flanders, Head of Economics and Politics at Bloomberg. Greif, dweud i'n gweithio'r gweithio'r gweithio'r gweithio'n gweithio'n gweithio. OK. So, thanks very much, David, and thank you all for making it this far. You know, seven hours of charts is pretty tough, but then in their hand, like at this time of the year, when can you go seven hours without once hearing Mariah Carey? I'm not going to change that now. So that was definitely some benefits. So Torston showed you a little bit of ankle earlier, didn't he, about economic change. So we talked about getting growth up. Everyone knows what that means. That doesn't mean it's easy, but everyone knows what it means. We talked about getting inequality down. Again, that's very difficult, but everyone knows what it means. Now we're going to talk about steering change. So what does steering change mean? I'm going to give you the kind of the what of economic change. Then I'm going to give you the why of economic change, and then I'm going to give you the how of economic change. So economic change is industrial sectors of the economy growing or shrinking or its firms growing or shrinking. Or its people, workers changing jobs. So you can think about it at the level of the sector, the level of the firm and the level of the worker. And the first thing we need to do now we've defined our terms is get our facts straight. People talk a lot about economic change having accelerated, but in fact, that's not what's been happening. So I'm going to show you this chart. This chart, you can see time on the x-axis and on the y-axis, is like the fraction of workers moving from one industry to another every year, roughly speaking. And you can see that however you measure industries, we're at a multi-decade low. So there's less change, not more going on in the economy. And that's the first thing we need to remember. I could also show you a chart about change at the level of firms. So I could show you that the rate at which firms are growing and shrinking has slowed down. People call that business dynamism. It's about a quarter down since the global financial crisis. And I could also show you a chart at the worker level. So I could show you that workers are switching jobs less quickly than they used to. So however you think about it, change is slowing. But why do we care about that? The reason is that change is where growth comes from by and large. Innovation, the growing of large firms, people starting new jobs, people starting new careers. That's where growth comes from. And it's good by and large. It can be traumatic, but it's good. Let me give you one example here, one piece of evidence. You can see here that lack of change is going to have real costs to people. At the bottom, you've got the average pay increase of all workers. And then you can see how much bigger your pay increase is if you change jobs. It's even bigger still if you change jobs and sectors or jobs and regions. So this is just one of several things I could show you to explain why change is important. Okay, so we've done the what and we've done the why. Now let's do the how. So the first thing we're going to need to do is reshape the industrial composition of our economy in the right direction. This chart on the x-axis, the width of the bars is how many people work in each of these sectors. And the height of the bars is how productive they are. And that tends to be where all the money is as well in terms of pay. How productive they are relative to the average. And you can see here that we've got some really brilliant manufacturing, scientific and technical, ICT sectors, financial services of course on the right hand side. And then we've got some very low productivity sectors, especially accommodation and food services on the left hand side. And the plan basically is we want to raise the average by shrinking those bars on the left and growing those bars on the right. That's going to bring the average up, right? How are we going to do that? First thing we talked about was effective large cities. So services happened in cities. Torsten told you that this morning. We need to power our cities up to get more space for this, more capacity for these bars on the right. Second thing, we need to have the right train strategy, which means finding a solution for our advanced manufacturing and then also taking the huge opportunities that we have from our services powerhouse status, world's second largest exporter of services and using that to grow our export in services. So new services trade agreements. Last but not least, we're going to need to support investment. In order to grow these sectors on the right, firms are going to have to grow, and that means investment. They're going to need to write skills and that's going to mean investment in human capital amongst other things. Okay, so I've explained where the space is going to come for from on the right hand side. How are we going to get the resources out of the lower bars on the left hand side? Not all of them, but some. There are some low paid sectors, for example, like social care, which we really don't think should shrink. They probably need to grow. So this is another chart that Torsten showed you earlier today. And what these are, each dot is a country. And then on the x-axis, you've got how expensive leisure and hospitality is in that country. And on the y-axis, you've got how much of it we buy. And you can see, we're in the top left here. But the point is, as they become more expensive, people are going to consume less of them, right? So what we're going to do is we're going to improve in the strategy, it's about improving terms and conditions, pay minima, and as a result, possibly raising the relative price of some of these sectors like leisure and hospitality. And when we've been talking about the success of the minimum wage, we've been saying, well, how much of a cost of that can we bear? But what we should do is we should not think of that as a bug, but as a feature, right? So what we're doing is we're making these things more expensive, not only to improve the conditions for the workers in those areas, but also to create capacity for the economy to grow in better sectors, more productive sectors. So making them more expensive isn't just going to make the economy bigger. We think it's going to make the economy fairer as well. So what this chart shows you is different quintiles of the income distribution. So we've got the lowest income on the left-hand side and the highest income on the right. The red bars is like how much of this stuff people spend their money on. And you can see those bars are going up. So the richer you get, the more that you spend on retail, leisure and hospitality, I'm sure that accords with everybody's conventional wisdom. And then again, the richer you are, the less you get your money from that sector. So if we make the thing more expensive, we'll be doing more for the incomes of the people on the left-hand side and that money will be coming in part from more expensive services that the people on the right-hand side buy. So not only will it be good for the economy in terms of growth, it's about sharing that growth as well. So that's sectors. Let me talk about firms. We're going to need to see faster change at the level of firms as well. What does that mean in this case? That means firms growing and shrinking, in particular productive firms growing and small firms shrinking. That's what we need to see. This chart shows you why we need to see that. This chart, the height of the bars is how productive firms are at different points in the distribution within a given sector. So I've chosen wholesale and retail trade here. So you've got very productive retailers, let's say Aldi or Asda on the right-hand side and you've got less productive retailers on the left-hand side. And we need to see the less productive ones shrink, the more productive ones grow. That means more dynamism. How are we going to get that? We need to have more competitive pressure from a more open economy. So that means lowering trade costs, especially with the European Union again and these services trade agreements. It means more investment and the business environment getting tougher for poor performers. It means planning reform so that bigger firms can grow. They've got the land as well as the labour to grow. It means halving stamp duty, not just for workers and residential stamp duty, but also for firms because stamp duty is a tax on assets changing hands and therefore it's a tax on dynamism. We don't want to tax dynamism as much. Last but not least, the mantra needs to change from supporting small firms through lower taxes, for example lower corporation taxes, lower business rates to supporting young and growing firms. So there are some small firms which are going to be great firms or really valuable ones and then there are other small firms that don't really deserve special support from the government. So we want to go young, not small. Last but certainly not least, I'm not going to show you a chart, I'm going to show you some words. So we don't just crunch numbers at RF and on the Economy 2013 inquiry, we also listen to people and what we've heard from people, we've asked them, why aren't you changing jobs more? You know there are better jobs out there, why aren't you changing jobs more? You get different picture at different points in the labour market. So we've asked people towards the bottom of the labour market and they're really worried that if they move jobs, the capital that they have with their employer to give them a little bit of flexibility on their hours or maybe a few more hours is going to be destroyed when they move jobs. So we want to give them the courage to move, the ability to move by raising those minima. So we've done really well on the minimum wage, we need to raise the minimum of other things like sick pay and so on, right? At the top of the labour market, you get a very different story indeed because we've seen that these people tend to have more humane hours and conditions and so on. What they're really worried about is the downside. Because they're closer to the top, they're worried about how far they can fall. And so we need to have a new system of unemployment insurance in this country to give workers a larger fraction of their earnings if they become involuntarily unemployed for a bit longer than the very low replacement rates we see at the moment. And you can see here from this quote that that's what's going to be a thing that's going to get the labour market moving at the top. So different things at the bottom and different things at the top. So let me just wrap up. It's time now that we need to start worrying about there having been too little change, not too much. And I hope you know what we mean by that now. So our task is to raise the capacity for highly productivity, so fatter bars at the right-hand side alongside relative price changes that lean against lower productive sectors. So more expensive things at the bottom to create capacity at the top. We need to remove barriers to change for firms. Like I said, for example, start halving stamp duty. And then we also need more empowered workers willing and able to take risks because flexibility is not the same as dynamism. We've focused too much so far on flexibility. What we need to see is more dynamism and more change, not less. And that's all I wanted to say. Thanks very much. Thank you very much, Greg. You can see in the resolution foundation we've got a bit of a thing about the hospitality sector. Sorry about that, but it is a sector that always appears in our analysis of what change should mean. Now, we've got three fantastic panellists now to comment on this, and I'm also hoping, so do keep the questions coming to take one or two of questions from our online participants on Slido. But, Martin, let's start with you. Martin, we'll fewer observations. Okay. I've only got five minutes, and that's obviously ridiculous. And the... Terrible unfair. And the... And so I'm going to make basically two completely different points that they are related. The first... I don't want to discuss in detail the resolution foundation's basic strategy because I intend to write a couple of columns on that, but it is really important to understand what it is and how stripped down to its most basic. It is people in businesses like consulting, accountancy, financial services and so forth will expand dramatically to supply the world market and in the process supply us with all the foreign exchange we need to live off. And these will, of course, be populated and run and by entirely high-skilled graduates. They pretend they'll... Some of them will be living in Manchester and leads they won't. And these people will be taxed to the hilt and both directly by the government and indirectly by pushing up dramatically the cost of labour-intensive services will be reduced by the unskilled people who will no longer have any participation directly or indirectly in international trade. And it is actually a model of the economy that you can imagine. I personally am deeply sceptical that it works for nearly 70 million people, but that's really what I want to say on that central issue. It has one other very big problem which is those labour-intensive, high-skilled labour centers, I'm looking forward to the reply of this, have the basic characteristics they have next to no economies of scale and you don't invest much in them because the basic capital employed in these businesses is human capital. So you do invest in human capital but otherwise who the hell cares? It's not machine-intensive. Now it could become machine-intensive but then it becomes AI-driven and in that case it's a commodity and it ceases to be a relevant sector from our future. That's my first point. And the second point is when I thought about what I meant by change, not what the Resolution Foundation means by change, I mean, and now it started out well, we want faster economic growth, less inequality among households, less inequality among regions and we want a green transition and we want all these things to happen pretty damn quickly. And to do this, and this is more or less rephrasing, we promote high productivity and high productivity growth sectors, we promote high productivity and high productivity growth firms, we increase relative wages for low wage people, we increase investment very substantially, both public and private, we increase savings because at the moment we already have a massive great current account deficit and how big can it get, which means less consumption, by the way. We increase innovation within and across sectors and of course we increase the supply of skilled people and to do all that over any moderately brief time frame, which is say 10 years, we have to change almost every policy system you can imagine. That's the truth, in my view. And that then gets to the question, how do we steer this? I have absolutely no idea, but certainly not with the political and governmental system, we have. And that's where the crucial point about the policy debate. I didn't hear Mr Stammer, and this is my very last one, I didn't hear Mr Stammer, but I think I have a pretty good guess of what he said. And the one thing I can say with absolute certainty is that what will happen under him will make no appreciable difference on the many fundamental issues that I've just raised because we're not talking about small change, we're talking about really big changes and the system we run as politically in terms of government and I won't even go into the corporate sector and all the rest of it is just not capable of this and that's obvious. And if we don't recognise that reality, we're not going to get any sort of change steered or otherwise. Well, thank you very much, Martin. We look forward to the column, perhaps. I would just say it. That's a terrific analysis. By the way, the analysis is absolutely superb and that's what makes it clear how big the cliff is that we have to climb. It is a very big change. Though I have to say the analysis also tackles some of the issues you identify. I mean, if you look at what we show in our growth sectors that we do think are where we've got a comparative advantage, the evidence is that's where pay rises across the entire skills range. We've got a chart showing that. We even have a chart showing what happens to the price of hairdressing and that shows how thorough we are at Resolution Foundation. But if you go to Figure 58, you'll find some of parts of the answer that Martin's very telling challenges. Now, we're going to hear from... Is it because these people buy all those services? Yeah, indeed, indeed. Yeah, absolutely. Now, we're going to hear from Professor Edgerton. Of course, David has written the rise and fall of the British nation. Before that, he's written on, I think, an incredibly astute analysis of the changing shape of the British state, the warfare state from 1920 to 1970, and perhaps most relevant to our theme today a book with a brilliant title, The Shock of the Old, reminding us how much some of these old structures and arrangements hang around. So, David, we're very interested in your observations. Well, thank you very much. Let me start by saying that I agree with Martin that the changes that are implied are really radical. But those changes sometimes do happen, even in British history. And it particularly happened in the years 1945 to the mid-1970s, years which conventionally regarded as years of poor performance, even of decline. But these are the years of the highest ever rates of economic growth in British history, the highest ever rates of productivity growth in British history. They are years of increasing equality between incomes, between levels of wealth and between regions. It's an extraordinary success story. Perhaps we should think about emulating that success. We also had higher R&D spent. We had an extraordinary successful energy transition as well. What's not to like? Well, we don't like it at all. These are the years of stupa. We heard yesterday. These are the years when the Labour Party was in office for a long time. And supposedly this Labour Party was interested in taxing and spending. Well, actually the Labour Party was a productivist party. It liked nothing better than transforming the supply side of the economy. And in fact it finds echoes in what we've heard today. In the 1960s, there was something called a selective employment tax, which was about taking people out of low productivity services and encouraging their deployment in high productivity manufacturing. There was also great interest in making changes between jobs easier, redundancy payments out in 1965. Hardly anyone knows about this, but extremely important. So these years were years of real change. And Gregory showed us the structural change data. Extraordinary structural change between the 30s and 1950. Reasonably strong in the 50s and 60s, the 1970s. That decade we all love to hate. Extraordinary rates of structural change. Long before Margaret Thatcher. So, back to the future, perhaps. Back to taking our past a little more seriously. What are the implications of that point? Well, I think we need a richer, more honest conversation to quote somebody from earlier today about what has happened since. And what has happened since is a decrease in all the things that we want to increase, including rates of economic growth. And I think we need to take that very seriously. Now, it's not the case that we simply in a changed overall world. The UK's position in productivity relative to France and Germany as a wonderful chart shows, if I've read it or eyeballed it correctly. If you take the worst years of the 1970s, not the best one, the worst years in terms of relatively low British productivity, essentially the story has remained the same in terms of comparative productivity to this day with the exception of a period in the early noughties, which I think was a bit exceptional. In other words, there is absolutely no reversal of the British decline compared to France and Germany. And of course, there was never going to be any chance of reversing the decline compared to China and India indeed to the rest of the world. So we need to understand what has happened to the British economy. Now, a very common way of thinking about what has happened is to say short-termism, sticking plaster politics. But I think this is very inadequate. It's true that, well, it is certainly the case that in the years, 1945 to the 70s, there was a lot of long-termism building new coal mines, motorways, railways, electricity generation systems, and so on. But since 1979, we've also had an extraordinary long-termist set of programs. It's just that many people, and perhaps the majority in this room, didn't like them. But we've had the deliberate pushing down of the replacement ratios of unemployment benefits. It didn't happen by accident or by people with short terms. They said, no, no, we're going to take it down from 30 to 15%. There's been a deliberate pushing down of public investment. Again, it didn't, there's a bit of volatility recently, but the trend is very clear. And that was a long, long-term program. And Brexit, that wasn't a quick fix for anything. That was a very long-term program, which people devoted many, many years of their lives to and are pushing through. So what we've got to think about is the actual policies and how they've impacted over time. And to stop thinking in cliches. Now, one, this is a wonderful report, both for what is in it and what is not in it. And I'll end on this point. It's so pleasing to see a report that doesn't go on and on about manufacturing, that it doesn't go on and on about the UK being an innovation science superpower, that we need more small businesses, that we need AI, that we really are going to be the innovation hub of the world. Fantastic, fantastic. There's a real recognition here that the UK is not a superpower by any measure at all, except perhaps legal services, liable services perhaps. It represents 2% of world R&D, very roughly, 2% of manufacturing. That's not insignificant, but it's not superpower stuff. There's a wonderful recognition, therefore. That's not the way forward. And I think that is a major change from the discourse both of the Labour Party and indeed of the Conservative Party. And there's a very welcome emphasis on effectively imitation on catch-up. It's an invitation, which I think we should all take up wholeheartedly for modesty, for recognizing that the great number of our fellow citizens are having a miserable time and that we need a politics of improvement rather than a politics of grandeur. So I'll leave it that. Thank you. Thank you. Thank you very much indeed, David. And that's a very interesting contrast, a reminder that indeed it is about catching up with some comparator countries. Now, Stephanie Flanders' head of economics and government at Bloomberg has been a shrewd observer of this changing scene for a long time, including when she was at the BBC. Stephanie, your take on all this. Well, I was kind of struck. I thought this panel was a really good idea because you've had all of these kind of highfalutin theory about how to make things, how to make change, you know, what needs to happen. And then there was going to be the nuts and bolts of forcing change on the ground with no disrespect to my colleagues from two economic commentators and a historian. So I'm not sure whether, as Martin said, I'm not sure we really know how to force change on the ground, but I share, obviously, Martin's, since I have been around for so long, as David points out, I share that, I share the sort of deep understanding of the path dependence of these things. And it is also interesting to remember the 70s. And I was quite struck, actually, at the investment summit. Rishi Sunak's very much talked about for at least half an hour, investment summit last week. You had what you did have, global business leaders, a very high calibre, all in London, all praising the UK all day. But I promise you, all they praised all day were the same three things, the time zone, the language, and English common law. So those are still the things that we've got. And thank goodness, they are still massive advantages. We still have a lot of people wanting to come to Britain, but that is path dependency for you. I mean, we've had those for quite a long time. And even you could say that the rule of law has been a little bit challenged at various times recently. And we spent all day talking about investment. How do you force investment? You know, I think we've got some quite practical ideas about that. I like just in passing an idea about protecting investment, the way you protect the NHS. And I think that speaks to sort of having a conversation and having some slogans around investment. But I do think you also, we would then have to be honest about what most of that investment is. It's maintenance. It's not actually exciting investment in new things, public investment, it's stopping things from falling down and getting rid of holes in things. And I think that actually might concentrate minds and make people support it a bit more. The focus on dynamism and the lack of it is obviously really important. And within that, certainly what's come through in a lot of productivity research, as we know in the UK, is this lack of diffusion. And you see it a lot in the report, the wide range, you know, just getting people even not necessarily even to best practice, but just halfway to best practice could have this enormous difference. I'm not sure we have even the distinguished people in the audience, I'm not sure that we've got that many great examples of increasing diffusion when you've kind of set out to do it. But I think probably just reducing barriers to dynamism. If you can't change what Britain is and you can't really change the whole structure of government, just reducing what's holding people back is probably a good start and I would certainly endorse many of the things in the report, sort of basic things, that I thought I feel like I would learn when I was at the Institute for Physical Studies many years ago in 1992 that was that long ago, something like that. You know, you don't want to have a tax code that actually encourages small, not very successful businesses to remain unsuccessful and small and yet we're still sort of doing that and choosing to do that a lot, so I think that's an important point around that. Another big obstacle post Brexit is Brexit for a lot of these businesses and I enjoyed the sort of just Zanni's question to the leader of the opposition about seizing the opportunities of Brexit. Of course, one opportunity you have after you've left the EU that you didn't have before is to really bring quite a lot of advantages to the economy by getting a much better deal with Europe than you had before and I sort of, I don't think you have to read very far between the lines in this report to see a sort of Theresa May's backstop, anyone, that the Labour Party didn't vote for for probably lots of good reasons but that's kind of what you're talking about when you talk about a much closer arrangement that effectively gives up some sovereignty with the good sector but reduces some of those obstacles and it's interesting that that wouldn't violate any of the promises not to go into a customs union and not to go into a single market. Look, it's not technically violate those things. And finally, and the thing that I do know a bit about having worked with some city leaders on these issues is, you know, I think one, one way to sort of feel our way on some of this, whether it's about spreading innovation or just being more dynamic, helping change happen, is by being really serious about that place-based strategy and the city's sort of mission for cities and that isn't just about sort of focusing on the mayors or having Andy Burnham on the today programme more often. I actually, I sort of basically agree with Tom Rodden who was speaking in the earlier panel who said, you know, this can't be done from Whitehall. I think the only amendment I can say to that is you can't be done without Whitehall. You know, this can't be about just decentralising a bit of discrete power to cities. It's about what Jim O'Neill used to talk about many years ago, sort of having Team Birmingham, Team Manchester, sitting in Whitehall. I don't even agree with Andy Halday that it should be in Darlington. I think you need a much closer, and I don't know what that would look like. I don't think it's necessarily a separate minister or a separate ministry, but having teams in Whitehall who are working with cities, their own city, thinking about getting to know what's going on in that city and thinking about what the kind of unexpected obstacles are that come from lots of different policies operating together. And it may not even be the sort of traditional growth policies that they don't have very much control over. You know, the 70 funding streams that actually are operating in relation to growth policies in, say, Manchester or Birmingham. I was talking to the leader of a northern, one of the larger northern councils the other day, and discovered something I didn't know, which they increasingly get a lot of very troubled children sent to them from the southeast who cost upwards of £1 million to look after. And they're sent up from London because obviously they don't have the resources or it's too expensive to have this very labour-intensive support for these individuals. This is not disabled children. This is children who need constant safeguarding and mental support and other things. They sometimes have a team of four or five people working for them almost round the clock. And there's a lot of incentive incentives that have encouraged that to happen. And they're putting an enormous burden on those councils. And I don't think anyone in Whitehall quite realise as it's happening, and it's taking up a lot of their mental capacity as well. And I just think it's a sort of random example, but something like that, which doesn't even necessarily affect growth, is affecting the ability of those people in that council to focus on helping businesses, helping workers. So whatever we can do, I thought I cooked up with Tom Rowland earlier, we could maybe, I think one of the things you could do is have much more interplay. None of us could think of a senior local government official who was now working in Whitehall, someone who's had a senior job running a city, actually maybe forcing them to then spend a year in Whitehall. There's my little plan, a little, you know, I'm sorry, Tom, you want to stop being chief executive of Leeds, you're going to have to spend a year in Westminster or at least have a sort of mentor schemes. But something along those lines to just begin on that road that Martin talked about, of like changing the way we think about policy. Thank you very much. Thank you. And I must say, alongside all the wonderful resolution analysis we've had during the conference today, Tom's point that he needed to get Whitehall clearance to build a roundabout was, I thought, one of the most vivid facts that brought home some of the problems we face. And look, we have been trying in our report to be absolutely realistic. We're analysing revealed comparative advantage. We're not inventing things we think we're good at. We're trying to discern from all the evidence what the evidence suggests we're already good at and your points about the English language and time zones and everything, absolutely time with that. So I think, I've just been looking at the slide-out questions and there's a slide-out question that has come up at several points during the day which is about exactly where the climate emergency and green growth fits into this. It was a point on which, of course, Keir Starmer was challenged because of the 28 billion. But there are some people who are putting in questions just saying, how does this tie in with the overwhelming challenge of the state of the environment? So I don't know whether, Greg, you want to make a comment on how that ties in with our analysis, please. I think net zero runs throughout the report and what we're saying on net zero is that it's a necessary thing, but it's not going to be a drag on the economy. On the contrary, it should help, but nor will it be transformatively good for the economy. Where it fits into change is that I don't expect it outside of a few sectors to make sectors grow or shrink a great deal. What will happen is that some firms will grow and others will shrink. If you think about car mechanics, for example, so electric cars just go, they don't break as much as petrol cars, so we're going to need to have fewer car mechanics and their training is going to have to be different. In terms of construction, of course, people are going to have to learn to use new materials and techniques, but I don't expect it to lead to transformative change beyond those sectors, however necessary it is. There may be also some changes in economic geography, so if we have a better offshore wind industry than we do now, perhaps a more domestic one, there are some places in the country that can benefit from that. Martin? I largely agree with that from my reading on this, something I followed quite closely, but there is one pretty important caveat which is going to take a hell of a lot of investment in the medium term. Just to give one example, which is a pretty obvious one which we have tried not to think about, is the retrofitting of our entire housing stock with a different heating system. This will be disruptive and expensive, so the way to think about it is I think that whatever its long-term growth effects will be, I suspect, pretty close to zero over a long term from what I've seen, it's going to require very substantial long-term increases in investment over something like a decade at the least. First of all, it's going to be fantastically unpopular. We haven't even begun to think how unpopular it will be. I've been thinking about what it will mean for my own home and trying to persuade my beloved wife to accept the complete destruction of the interior decoration to allow it. But the more important point is we are a... I've made the one thing we don't want to... We are a colossally saving short economy. Average savings rate is 13% of GDP. We have a structural current account deficit of about 4%, 5% of GDP. If we're going to raise investment rates, let's say just by one or two percentage points of GDP, that increases the external deficit by 50%. Where are we? How are we going to fund this? And this basic refusal in any of our discussions to face absolutely binding macroeconomic constraints, or at least I think they're binding, is very dispiriting, and it applies here too. We are going to have to pay for this in the medium term. It is absolutely a high investment and also high savings strategy. And I don't know if Stephanie wants to comment, and then David, Stephanie. I mean, Martin's made the right points. I think it's... But there is a bit of a debate about this, about the politics of it, that in these kind of circles, we tend to say, you know, you have to make clear it's not about you're going to increase investment and that means reduced consumption. You shouldn't sort of kid people that there's going to be lots of growth coming out of this. I sort of wonder, you probably do need to kid people a bit on that run. And actually that's why it's really important, this thing about it's about jobs. I mean, Ed Miliband has actually focused on this in a good way. The proportion of jobs in our renewable sector that are actually all just people making wind farms abroad, and then you have a few people who ferry them out, and then there's a very nice, you know, has produced a lot of jobs, the servicing of the offshore things. I've met some of those people, but, you know, I think that is what... If you're going to have that slight deceit, or at least, you know, being economical with that aspect of, like, we're going to shift from a really high consumption to a much less consumption, which I think is fine not to talk about that much. You have to at least be making sure that there are domestic jobs, and that's where you get into the retrofitting again. And David, do you want to comment on this? Because of course it was interesting with your historical perspective that the three leaders that Keir Starmer was citing, Atley and Margaret Thatcher, certainly both of them got elected, and for the first few years of Margaret Thatcher, and a lot of Clement Atley's time, on a message about sacrifice, pain necessary to go through this in order to achieve something better, and you've just been talking about previous long-term patient strategies. Do you think they are possible? Oh, yes. But the question is sacrifice for whom? And those two leaders had very different groups in mind, and they also both had a message, not just about who they were in favour of, who they were against. I mean, Atley was very much against selfish individualism, for example, and for the national interest. But these changes are possible. But the thing I doubt what's being said about climate change is that it's not just a question of money, it's also a question of planning and political consent. And local authorities and central government will have to have a serious plan, and we're a long way from thinking about that. And as a substitute for that, we have this sense that what needs to be done is to create a new manufacturing industry and new innovations. The reality is that we're going to be insulating houses with very old technology, will be installing heat pumps, which have been themselves around for a very long time, we are not going to be generating huge quantities of carbon-neutral jet fuel, nor are we going to be generating lots of nuclear electricity. And we're certainly not going to be building many British wind turbines between now and 2030. So the focus needs to be on the domestic, on services of one sort or the other, and just getting basic things done properly. And I do fear that, as has been the case for a long time, an emphasis on innovation is an excuse actually for doing nothing. Thank you very much indeed. I'm now just going to end this panel session with what may be the final resolution foundation chart of the day. And this I think is why the strategy is credible. You've heard already, we're not trying to invent a different world, we're trying to understand what Britain is good at. We're also trying to shape a catch-up strategy. And what this slide is about is just what it would mean if we caught up with Australia, Canada, France, Germany, the Netherlands. First of all, if we just matched their economic performance in terms of achieving their levels of growth. Secondly, if we matched their pattern of income distribution, which would show then a group of losers at the high-end of the income scale in the UK. And I sometimes think one reason why this radical debate doesn't quite happen as a way that our panace of call for is that when the top 10 or 20 percent of your income range are protected from the consequences of being an underperforming economy by enjoying living standards that match those of France and Germany. And all the adjustment born by the less affluent half, that does also skew your political debate as well. So the middle part of the slide is about what happened if you just shifted to the kind of income distribution they have. And the third part is what happens if you achieve both. So we are simply saying imagine that we achieve the economic performance and the pattern of income distribution of those countries. And it shows that there are significant gains, obviously above all for the less affluent half of the population, but actually for all of us by a pure catch-up strategy. Simply saying we've got to match what other countries we're very familiar with achieve already. So I'm very grateful to our panel for their wise observations and we all look forward to Martin's columns. Thank you very much.