As the politics of the ‘left behind’ continues to cause seismic shifts in UK and international politics, the most urgent and important question facing leaders from May to Corbyn, and Trump to Merkel is how we – governments, business, civil society, households and communities – can create inclusive growth. Next week the RSA Inclusive Growth Commission sets out how in its final report, published on Tuesday 7th March.
Inclusive growth is about how, in the words of Theresa May, we can ‘make the country work for everyone’. For too long our economy has created division and inequality – where some people gain handsomely while others struggle to get by. 55 percent of people living in poverty are in households in work.
The divide between the ‘haves and the have nots’ was an issue long before Brexit, but the referendum exposed the depth of the problem in the UK. And it’s only going to get worse – with a further squeeze on living standards expected as welfare cuts and higher prices bite, and automation threatens ever more jobs. As post-Brexit Britain seeks to redefine its place in the world, what kind of economy do we want to create?
Over the last 12 months the Inclusive Growth Commission has explored this question, searching for practical ways to enable as many people as possible to contribute to, and benefit from, a new kind of inclusive economic growth. The Commission, chaired by Stephanie Flanders, former BBC economics editor, launched in April 2016.
In many ways the Commission sought to pick up where the previous RSA City Growth Commission had left. Having inspired the Northern Powerhouse and catalysed the city-region devolution agenda, the challenge was to build on this largely economic initiative by looking at the social dimensions that underpin much of our productivity and growth. Chair of the City Growth Commission, Lord Jim O’Neill, was still leading the charge of implementation for George Osborne in the Treasury. At the launch of the Inclusive Growth Commission, Lord O’Neill handed the baton to Stephanie Flanders to continue to drive the research agenda.
But just eight weeks later, the result of the EU referendum brought a sudden halt to ‘business as usual’ politics and propelled inclusive growth to the fore. The decision to leave, for the UK to “take back control”, exposed the central problem that had sparked our inquiry; too many families, communities and places were being left behind by our economy. As we heard from one Councillor in Sheffield at our first evidence hearing within days of the referendum result, “We could’ve told you our communities would’ve voted leave before Christmas.”
The Commission undertook a comprehensive programme of activity and engagement to understand the challenges of inclusive growth and how best to respond to them. It drew in evidence from across the UK, including evidence hearings in Sheffield, Plymouth, Nottingham and the London Borough of Barking and Dagenham; deep dive case studies in Bradford, Glasgow, Cardiff and Newcastle; seminars in London and Edinburgh; visits to Bristol, Belfast, Manchester, Birmingham and a range of other engagement activity with civil society organisations, business and citizens (including through two citizens juries events, organised by our private sector sponsor, PwC). Our topic was inclusive growth and our process had to be inclusive too.
One of the recurring themes of our engagement was the issue of language. From the start we had grappled with the question of what to call our inquiry, considering ideas of economic inclusion, shared prosperity, inclusive productivity and a range of other similar concepts. We settled on inclusive growth, which has had increasing traction globally (including via the World Bank, World Economic Forum and the OECD), and the Commission has gone onto mainstream this term in UK public policy debate.
While ‘inclusive growth’ might not be a household phrase, it encompasses a range of complex themes, issues and dilemmas facing policy makers, employers and local residents across the country. Should I take a zero hour contract job, or hold out for something more secure? Will a new grammar school really increase the chances of young people in my community getting ahead? Is it fair or sustainable that the gap between top pay and that received by the average worker has roughly tripled since the 1990s? Is globalisation a threat to inclusive growth or the best means of poverty reduction we have available?
In only a few weeks six new metro mayors will be in post in England, with more expected to follow suit. The Commission has argued that sub-regional devolution can be part of the solution to inclusive growth, and welcomes the commitment of the mayoral candidates and other leaders in our cities and towns across the UK (such as Glasgow, West Yorkshire and Bristol) to finding ways to make inclusive growth a reality.
Whilst government prepares to trigger Article 50, it cannot afford to be distracted by the process of Brexit at the expense of tackling the underlying causes of the Leave vote. Wednesday’s Budget will be the UK government’s first opportunity to respond to the Commission’s recommendations and make good the vision that all sides can, and must, subscribe to; a fairer, more productive, more inclusive economy.
The Inclusive Growth Commission launches in Bradford on 6th March and London on 7th March. Follow us for more information at @incgrowth.
Without inclusive growth the country will become more divided outside the EU than it ever was within it, argues Stephanie Flanders.