A country that works for everyone? Only with inclusive growth - RSA

A country that works for everyone? Only with inclusive growth

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  • Picture of Stephanie Flanders
    Stephanie Flanders
    JP Morgan Asset Management
  • Cities
  • Devolution
  • Public services

Without inclusive growth the country will become more divided outside the EU than it ever was within it.

Britain’s vote to leave the EU has forced into the open a fundamental and increasingly urgent debate about the country’s future. Should we pursue a more Singaporean model of economic growth, with low taxes and tariffs to attract investment and trade? Or should we seek to ‘regain control’ of our borders and our society – whatever the short and long-term economic cost?

These are false choices. Singapore is not a practical model for the UK. We have a better chance of raising our productivity and doing better in world markets if we invest more effectively in our people and places and, yes, give them a greater sense of ownership and control. But turning our back on our past strengths is not a sensible option either. We will not have the resources to build a more balanced and inclusive society if we cause wanton damage to our economy now by shutting our borders and cutting off old ties.

Another false choice is the choice is between devolution and central control. Government in the UK has traditionally been too centralised and the Northern Powerhouse initiative and city deals are recent and encouraging steps to nudge power in the other direction. But they also show the limits of binary approaches, focussed only on our major cities. Simply leaving local policy makers to fend for themselves, in a country with deep-seated regional inequalities, risks making those disparities even worse and leaving large parts of the country feeling even more excluded.

The good news is that Prime Minister Theresa May has publicly recognised the need for a more inclusive approach to growth that is also more sensitive to the way the economy looks and feels to people in different parts of the country. But the gap between aspiration and reality is very large indeed, and made worse by the depressing lack of statistical tools to compare the economic performance of different localities, or the lived experience of different kinds of economic growth. Voters can often feel the difference between good growth and bad growth. Our official statistics usually cannot.

If we are really going to build a nation that “works for everyone, not just the privileged few”, we need to do a better job of measuring what counts. We need to understand that modern capitalism is messy and does not produce predictable winners and losers - and that drawing a strict line between economic and social policy is increasingly counterproductive. Above all, we need a national strategy for inclusive growth, agreed and supported by the centre but devised and implemented by local actors with a keen sense of place.

We are not alone in facing these challenges. But the Brexit vote has made the stakes for Britain especially high. If we cannot deliver a more inclusive vision of prosperity there is a real risk that the country will become more divided outside the EU than it ever was within it.

Stephanie Flanders is Chair of the Inclusive Growth Commission

Download the final report from the Inclusive Growth Commission

Read the report online 'Making our economy work for everyone'

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  • Perhaps we need to pay far more attention to the messiness of it all, to identify some of the far more deeply rooted patterns at play which need to be addressed, instead of trying to find linear or even systemic approaches to sustain growth. Complexity thinking and economics, deep reflection, spontaneous creativity...might offer a much more expansive, wider view.  

  • Concluding his first presentation to the Economics for Ecology conference at Sumy in 2009, my late colleague said:

    "The question at hand is what to do next, and how to do it.  We all get to invent whatever new economics system that comes next, because we must. "

    In reality, those talking Inclusion seem inclined toward closed organisations like Inclusive Capitalism.

    As I reminded the City of London Mayor, they won't be doing it by shutting out the activist she borrows from and the children he put his life on the line for.


  • If Local Authorities are able to engage in business activities, including around Housing, Transport, recycling etc, might this be a route to empowering local economies?

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