Only inclusive growth - RSA

Only inclusive growth can ensure the UK works for everyone

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  • Picture of Stephanie Flanders
    Stephanie Flanders
    JP Morgan Asset Management
  • Cities
  • Communities
  • Devolution

We want the freedom to do things differently in the UK. There were plenty of mixed messages in the result of the EU referendum, but that one came through loud and clear.

We do not know yet how Theresa May will translate this vote against the status quo into sensible policy. In her first speech as Prime Minister she said she wanted “to make Britain a country that works for everyone”. This could be a powerful uniting theme for policymakers in this parliament and beyond - and a great way to use this moment of radical uncertainty to start to do things differently. But if we are to take these words seriously, they must be backed by a concrete strategy for delivering inclusive growth.

The UK is far from the only country grappling with the challenge of creating a more inclusive economy. It is a nation in 2016 with a golden opportunity – in the wake of the Brexit vote – to question old assumptions and re-cast old relationships to put that challenge centre stage. The Chancellor has promised to ‘re-set' fiscal policy. That would be welcome but it needs to be part of a wider re-orientation of government to achieve not just more balanced growth, but a more inclusive kind of prosperity. This is a universal takeaway from the evidence the Commission has received, including from the deep dive research it is conducting across the UK.

Not everything needs to be re-set. Both the City Growth Commission and the decentralising policies associated with George Osborne’s ‘Northern Powerhouse’ initiative have offered encouraging – sometimes inspiring – examples of devolved policy-making which really does “work better for everyone”, including Whitehall mandarins. But we need to make sure that all parts of the country are included in this agenda for growth – and we need policy makers at all levels of government to do a better job of bringing the economic and social dimension of policy together. We do not have all the answers in this Interim Report, but I think we do offer some powerful signposts to that more inclusive nation which so many would like to see – and which Britain's bruised and disrespected establishment needs to start now to deliver. 

Our four proposals are: 

  1. A road map for inclusive devolution. There is a political head of steam behind city-regional devolution, but there is a danger that this will only be offered to – and will only benefit – those places that have the narrow characteristics of places that are already succeeding. The government needs to make sure new devolution deals have inclusive growth at their core, and should use the forthcoming Autumn Statement to channel additional resource to localities as part of the Chancellor’s ‘fiscal re-set’. 
  2. Investment in social as well as physical infrastructure. Over the longer term, we emphasise the importance of investment that builds social infrastructure as well as physical infrastructure and transport connectivity. If the government is serious about inclusive growth, it needs to invest (rather than simply accrue cost) in social infrastructure in the same way that it does now in physical infrastructure, assuming the same long-term multiplier effects about the nature and size of economic growth. It needs to redefine as investment the work we need to do to bring people and places up to the level where they can take part equally in the economy.
  3. Inclusive industrial strategies. The change of UK government in the summer of 2016 has led to a rediscovery of the importance of industrial strategies as a way of shoring up the business and economic base of the country, a policy approach about which the previous Chancellor of the Exchequer was sceptical. Combined with a continued commitment to place and the process of devolution to city regions by the new Prime Minister, there is potential for the government to drive inclusive, place-sensitive growth.
  4.  More accurate data and measurement of ‘quality GVA’.One of the most obvious reasons why inclusive growth has not been at the heart of policy making before now is that the ubiquitous GVA measures, before and after investment decisions, do not measure it. This is not a criticism of GVA, but it is a criticism of only using GVA as a basis for decisions and investment.

Read the Inclusive Growth Commission's interim report for our full recommendations (on Medium).

Download the interim report.

Find out more about the RSA Inclusive Growth Commission

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  • As Prof. Steve Keen might say, this totally ignores the role of money, banking, finance and debt. As Prof. David Harvey would say, there can be no progress without some form of redistribution.

    Prof. Kenneth Boulding said, "Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist."

    The growth model is a sop to the redistribution argument. The idea of an ever expanding pie is a joke (as Stephanie's dad might have said).

    What I'm saying is that redistribution is the key. Basic Income is the tool and Money Reform on the Positive Money model is the mechanism to make us all better off in many, many ways.

  • Re: my last I am also at a loss to understand the current funding of NHS and Education system. with particular relevance to my community again, at first I'm sure it was a great idea free education and healthcare for all but as incomes increased and now the middle classes have huge amounts of disposable income and large assets - as they 'should'- it's difficult to balance the equation that they receive free education and medical care yet use there huge incomes to engage in seriously environmentally damaging behaviours such as continual and regular holidays abroad, massive food waste, massive consuming via grandchildren, minimum two car use in two adult household, huge half empty houses, they are all obese and have associated illnesses, oh but they do recycle and when mooted about climate change they feel it is a foregone conclusion so why do anything and these are university educated, middle-class high income people whom believe that they have integrity and ethical living standards and yet do not believe in economic equality. To be fair they are also mostly politically apathetic too oh except when they tried to ruin the Labour party by joining- dya remember the scam?? They are all dyed in the wool conservatives around here who attended a meeting on house building at a rate of 100 against, I was too bothered about my already ruined reputation - feeling it would get more violent- to attend as a for but luckily some of the attending M.P's were for. How does one approach these attitudes when in a devolution they would hold even more power?

  • I love the idea of this and the opening of discussion but the research must be comprehensive. Equality is a serious issue and I am interested in the micro scale because of my personal experiences. Family divorce for all but the rich is seriously, abusively unequal and unjust - this needs serious remedy. I am not in favour of devolution as a direct result of my experiences with local government as it has taken 16yrs. for them to listen and when they are a dyed in the wool conservative, radical change will not get a fair hearing and there attitude is a punitive one if change is mooted. It will become impossible to change unfairness and yes it will happen we are only human beings after all and always evolving.

    There needs to be massive education across all levels of society about what equality and human rights means pragmatically and philosophically, currently thinking about 'Lincoln' and I love his definition: 'You have a right to expect what I expect and it's likely that our expectations are understandable by each other, and this needs embedding everywhere and continuously reinforced. You would not believe how serious this premiss is undermined, ignored or abused even by university education folks, it's horrifying.

    In order to address these concerns and others of violence towards women and children I am a fan of UBI no question. But more than that there is a great upsurge in those with power in society whom do not believe in the creative life/living and that too is scary. Also at 58 and recently diagnosed with Complex PTSD I find that I am on the 'scrapheap' with no-one really helping me ( UBI) so that my parents paid for an education that is wasted, my own efforts on self education are wasted, my skills and talents are completely wasted and the response is usually that I should accept this- a lot in part also done by gender issues and lack of justice over the stealing of my opportunities by a paternalistic society- but also because no-one seems to know what to do except me of course but heaven forbid that they give me to the tools to do it with (UBI). Yet the entire country loses and there must be millions like me. We need to ban the sex industries and open up narrative spaces to discuss all of this. The undercurrent of violence permeating society today- and it's getting worse- and not only through ignorance is a truly horrifying nightmare.

    No devolution without education. And that would mean my entire community as well as relatives. I get so angry I forget many of the articulate arguments but you get the picture.

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