Today, the unclear prospects of Brexit loom large over our economy and our politics. The vote to leave was, by definition, a vote against the status quo. A majority of British people felt they had little to lose and perhaps something to gain from a radical shake-up of the economy. “Take back control” resonated because it was an expression of a feeling of powerlessness in the globalised economy.
The general election that was ostensibly called on the question of Brexit rapidly focused on the state of the country at home – schools funding, NHS deficits, public sector pay, reductions in police numbers. And the increase in voting by people in their 20s and 30s revealed the depth of frustration among younger generations, so many of whom are unable to access decent housing and are weighed down by mounting student debt. This generation expect that they will be poorer than their parents because they will be.
The blaze that engulfed Grenfell Tower shortly after the election ended, upended and ruined lives. Its blackened concrete shell now stands as a boundary stone marking the tear in the fabric of British society. Grotesque inequalities of wealth and power were exposed in the most terrible way imaginable.
The pressure has been building for the best part of a decade. Since the financial crisis of 2008, the British economy has been performing neither normally nor well. Outside London and the south-east, no part of the UK has yet seen a full recovery. Many have suffered from deteriorating public services and welfare protections as a result of the programme of austerity that has failed to reduce public debt.
What’s more, real incomes are falling again; their decline in the UK since 2008 has been the largest of all developed countries apart from Greece, Mexico and Portugal and we are in the middle of the longest stagnation of earnings since the 1860s. The economy feels unfair because it is unfair.
The political upheavals of recent years have prompted many to ask questions about the root causes. But alongside asking why this has happened, we need to address a more profound question: why is it so hard to see things getting better? The reason is that politically led policymaking focuses, understandably, on solving the problems that are felt in the present and might be expressed at the ballot box. It is much less concerned with the near-term future and not at all concerned with the long term. It is this absence of either a long-term vision or a long-term plan that makes it impossible to see a better future ahead of us.
Successful change demands a destination to guide its direction and to bring the country together in common purpose. In 1942, William Beveridge’s vision of “full employment in a free society” gave much-needed direction for the postwar government that created a new economic and social settlement for Britain. We need a comparable vision today.
That’s why shortly after the referendum last year, the IPPR Commission on Economic Justice was established. It brings together a broad cross-section of British business, trade unions, civil society and academia. Its members range from the archbishop of Canterbury to local community organisers to leaders in the City of London; half of the commissioners are women; a quarter are from ethnic minorities. It reflects 21st-century Britain.
Later this week, the commission’s interim report will set out a fresh vision for the British economy, an economy that joins prosperity with justice and builds the common good.
Most people in Britain want the same things from the economy. They want an economy that creates broadly shared prosperity, that is balanced across households and regions and that is environmentally sustainable. They want an economy that works for everyone, not just a minority who are already better off; that not only improves individual living standards and wellbeing but strengthens the public goods we share in common; that safeguards the future as well as enriching the present.
Vision without action is merely delusion, as a proverb goes. That’s why now is the moment for major reforms to Britain’s economy to be proposed, dissected and debated – and, most importantly, adopted. For ordinary households, the task of fundamentally changing the economy is urgent as well as important.
After all, the real lesson of these turbulent political times is that the economy does not belong exclusively to those at the top of it, whether in business, government or society. It belongs to us all. The economy should serve society, not the other way round. If we don’t like the way it is working, we need to assert our collective power to change it.