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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

A New Direction for Britain's Economy

Thursday, 13 September 2018

Britain’s economy isn’t delivering for the majority of people in the country, and a radical overhaul unlike anything we’ve seen in our lifetimes is the only way to fix it.

Perhaps a few years ago that would have been a highly controversial statement, but in 2018 it’s clear to me that it’s what a growing number of people are thinking. Now the Institute for Public Policy Research, one of the largest and most influential think-tanks in the country, is starting to say the same thing. Since 2016, their Commission on Economic Justice has been working on a report that looks at almost every part of the contemporary British economy. To make sure that they got as rounded a picture as possible, they have sought the views of academics, the heads of major trade unions, leaders from some of the biggest businesses in the country, and even the Archbishop of Canterbury.

Their conclusion is stark; the 21st century British economy in its current form “delivers neither prosperity nor justice”. The report acknowledges some areas of strength; employment remains high and many sectors, such as finance, manufacturing and life sciences, can hold their own at a global level. However, the many problems are becoming impossible to ignore. The last time wage growth was as low in Britain as it has been in the 2010s, Napoleon and the Duke of Wellington were fighting at Waterloo. Two-fifths of the proceeds of income growth since the 1980s have gone into the pockets of the richest 10%, while only 10% has found its way to the poorest 50%. The growth of insecure, low-paid employment and the explosion in house prices means that for many, especially young people, finding a stable job that pays the bills and getting a foot on the property ladder have become increasingly distant dreams. As a nation, Britain is by a large margin Europe’s most geographically unbalanced economy, with investment and prosperity clustered around a few select areas while other once-thriving places are left to decline. British performance in investment, research and development, trade and productivity also continues to lag far behind our neighbours.

The IPPR make it clear that these are not problems that will be solved by tinkering around the edges. They argue, and I agree with them, that making their recommendations a reality would be the biggest change of direction for Britain’s economy since the 1980s, and possibly even the 1940s. Much of what they suggest has been brought up elsewhere; raising levels of investment, an Industrial Strategy worthy of the name, greater control over the financial system, higher minimum wages and stronger powers of worker representation and collective bargaining. In other areas they bring some completely new thinking to the table. I was particularly interested by two of their suggestions. On devolution, they propose a new “economic constitution” for the UK, devolving more powers from Whitehall to the regional level, backed up by £10 billion of funding over five years to narrow inequalities between different parts of the country. On the environment they advocate turning sustainability from a “nice to have” into a “must have” by introducing a new Sustainable Economy Act that would, among other things, require the government and businesses to set legally-binding plans to reduce pollutants and greenhouse gas emissions across every sector of the economy.

If you have any interest in what’s gone wrong with Britain’s economy, and what we need to do to fix it, I would absolutely encourage you to read the report (or the shorter Executive Summary) for yourself here. If the government truly cares about building a country that works for everyone, they should start by thinking about how they can turn the IPPR’s recommendations from words into action.

 

Posted by: Executive Leader


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