The Archbishop of Canterbury has warned the UK’s economic model is “broken” and has called for fundamental reform as Britons face the longest period of wage stagnation for 150 years.
The Rt Rev Justin Welby said Britain was at a “watershed moment” and joined fellow members of the IPPR Commission on Economic Justice in proposing a sweeping overhaul on a par with the Attlee reforms of the 1940s and Thatcher revolution of the 1980s.
In its interim report, the commission has cautioned that gains from economic growth are now going largely into profits and that wages are stagnating.
(PA Graphic)
It wants an “urgent public debate” on issues including taxation, the role of the financial sector, the power of trade unions and the market dominance of internet giants such as Amazon, Facebook and Google.
Rev Welby said: “Our economic model is broken. Britain stands at a watershed moment where we need to make fundamental choices about the sort of economy we need.
“We are failing those who will grow up into a world where the gap between the richest and poorest parts of the country is significant and destabilising.”
The Archbishop of Canterbury Justin Welby (Danny Lawson/PA)
The report from the Institute for Public Policy Research (IPPR) commission found that while gross domestic product per head has risen by 12% since 2010, average earnings per employee have fallen by 6%.
The wage share of national income has also fallen to its lowest since the Second World War, with the proportion going to earnings declining from 80% to 73% since the 1970s, while the profit share has increased, according to the report.
Britain’s economy is no longer raising living standards for most of the population, the commission said, which it warned sees the country break its “economic promise” that has underpinned public life since the Second World War.
It added the “economy’s deep weaknesses make it unfit to face the challenges of the 2020s”.
(Nick Ansell/PA)
It is calling for a raft of reforms, which would see a shake-up on a scale comparable with those led by former prime minister Clement Attlee, whose Labour government created the National Health Service and nationalised major industries and public utilities.
Labour leader Jeremy Corbyn’s radical ideas have drawn many modern parallels with Attlee in recent months.
A Treasury spokesman said: “Employment is at a record high, the deficit is down and inequality is at a 30-year low.
“We are proud of this record but there is more to be done.
“That is why we are investing £23 billion in infrastructure, R&D and housing while also reforming technical education to prepare for the high-paid, high-skilled jobs of the future.”