The government may hope Britain’s ailing economy simply needs a few nudges forward.
But a panel of top economists and leading civil society figures thinks it needs of a complete change in direction to address poverty, inequality and sluggish productivity.
The IPPR’s Commission on Economic Justice – a group that includes Sir Charlie Mayfield of John Lewis and the Archbishop of Canterbury – has warned that the economy is suffering from “deep and longstanding weaknesses.”
The commission’s “Time for Change” report makes for grim but necessary reading, with the experts describing the UK “unfit to face the challenges of the 2020s.”
Our economic model is broken
It finds that UK is the most geographically unbalanced economy in Europe. It also finds that the UK’s productivity levels are among the lowest of advanced economies, and remains one of the most unequal countries in terms of wealth distribution in the western world.
Although the unemployment rate remains low, the labour market has become increasingly insecure and casualised, and the share of national income in wages has been in decline ever since 1970s.
“Our economic model is broken,” said the Archbishop of Canterbury Justin Welby. “Britain stands at a watershed moment where we need to make fundamental choices about the sort of economy we need.
“We are failing those who will grow up into a world where the gap between the richest and poorest parts of the country is significant and destabilising,” he added.
Although the study is only an interim report, and the panel will make full recommendations next year, the IPPR’s assembled experts believe the government must draw a line under the “muddling through” that has since held since the banking crisis of 2008.
A radical new approach is now needed
They have called on policymakers to consider a new industrial strategy, reform of the banking sector and corporate governance, and new measures to spread wealth more fairly.
“The persistent economic problems we have experienced since the 2008 financial crash won’t be fixed with a bit of tinkering,” said Tom Kibasi, the IPPR director and chair of the commission.
“There is a growing consensus across business, trade unions and civil society that a radical new approach is now needed.”