Gavin Kelly argues, that just as the economic crisis has turned conventional thinking on macro policy upside down, the same may have to go for other elements of our policy discourse, if we are to navigate our way through what could be a stagnant post crisis decade whilst minimising the social fall out.
High unemployment and falling living standards may well remain a feature of life in the UK under prolonged slow economic growth. At the same time, further dramatic public spending cuts due to be rolled out after the general election inevitably mean ever starker choices about public service provision and welfare entitlements.
Plan C challenges policy makers, opinions formers and ordinary citizens to examine how we might best respond to this new reality. Does slow growth require a more profound shift in policy, expectations and culture? Might it even be possible for some things about our economy, society and culture to improve despite slow growth?
To begin to tackle these questions, there must first be clarity on what it is that the state should be doing and what role individuals have, as well as the degree of redistribution we want through public spending, welfare and taxation. Higher priority will need to be given to public spending that increases growth potential. Crucial long-term investments such as early years education to big infrastructure investment must be sustained in order to raise our productive potential.
In Slow Growth and Living Standards, Resolution Foundation director Gavin Kelly discusses the link between economic growth and rising prosperity.
With the economy in recession the RSA has commissioned a series of radical papers to discuss – how can we cope with significant long term slow growth?
This report follows warnings by economists that the UK economy may face a ‘decade of Japanese style stagnation’, with growth of less than 2 percent for the foreseeable future.