Britain’s economic model is “broken” and widespread inequality in the UK is growing, the Archbishop of Canterbury has warned in a report backed by business leaders.
This is a watershed moment where there needs to be a “fundamental reform” of the economy, Justin Welby said. “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.”
His comments came in a report by a commission set up by the centre-left Institute for Public Policy Research (IPPR) that includes senior business, trades union and other public figures alongside the archbishop. The ‘Commission on Economic Justice’ says the “economy is unfit to face the challenges of the 2020s, adding that “for too many people and parts of the country, the ‘economic promise’ of rising living standards has been broken.”
A new approach is necessary, the IPPR argues, which is on the scale of the “Attlee reforms of the 1940s and the Thatcher revolution of the 1980s.” For the majority of the population now, the reality is that their earnings are no longer rising, while young people today are set to be poorer than their parents, according to the report.
“I am convinced that most people in Britain want the same things from the economy: a system in the service of human flourishing and the common good, where all are valued and all have a stake, regardless of their perceived economic worth and ability,” Archbishop Welby wrote in the Financial Times.
The deeper question this raises, is whose economy is it? he added. “Our economy is no longer working for everyone, if indeed it ever has. And for some groups of people and some parts of the country, it doesn’t seem to be working at all.”
The archbishop said that what we are seeing is a “profound state of economic injustice” and he called for a fairer tax system, new education and skills programmes and new ways to improve pay in both the public and private sectors to tackle the inequalities.
The Commission’s analysis finds that, overall, the UK economy is no longer raising living standards for the majority of the population. It says that the UK is the most unequal country in western Europe with nearly a third of children living in poverty and more of the poor now living in working households (54 per cent) than in non-working households (46 per cent).
The Government said that inequality is at a 30-year-low and employment is at a record high.
“We don’t have a British economic model. We have an economic muddle,” according to Tom Kibasi, the Chair of the Commission. What is needed is a new vision for the economy, he said. “There is a growing consensus across business, trade unions and civil society that a radical new approach is now needed.”