BRITISH SOCIETY DESERVES AN ECONOMY ROOTED IN THE COMMON GOOD / THE FINANCIAL TIMES

British society deserves an economy rooted in the common good

The UK has to make generation-defining choices about its path beyond Brexit

by: Justin Welby
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The Archibishop of Canterbury, Justin Welby, says that inequality must be redressed as the poor live in the shadow of London's wealthiest companies © FT montage; Tolga Akmen; Getty Images



Britain stands at a moment of significant economic uncertainty; a watershed moment where we need to make fundamental choices about the sort of economy we need for the way we want to live.

I am convinced that most people in Britain want the same things from the economy: a system in the service of human flourishing and the common good, where all are valued and all have a stake, regardless of their perceived economic worth and ability. That is the heritage of our culture, the outcome of our great historic values, and emerges for me from the teaching of Jesus Christ.

So why are we hearing so many questions about the economic settlement that older generations are soon to bestow upon the country? Questions like, “Why are so many people so poor when others are so rich?” and “Why are young people going to be poorer than their parents?”

Our economic model is broken and 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. Half of all households have seen no meaningful improvement in their incomes for more than a decade.

Thirty years ago, when I worked in business, company chief executives were paid on average around 20 times the salary of the average worker — and people were worrying about the gap.

CEO pay in the FTSE is now more than 150 times average salary.

Between 2010 and 2015 alone, while many workers were seeing their pay fall in real terms, the median pay for directors in FTSE 100 companies rose 47 per cent. The seemingly runaway nature of high pay among the richest and most powerful bears little relation to the experience of the majority of people.

The deeper question this raises is: whose economy is it? Some have argued that the results both of the EU referendum in 2016 and the general election of 2017 were in some way an expression of this question. The fundamental problem is simple: headline performance numbers do not reflect many people’s experience of the economy. Our economy is no longer working for everyone, if indeed it ever has.

And for some groups of people and some parts of the country, it doesn’t seem to be working at all. In communities where I have worked in Liverpool and the north-east of England, living standards have actually fallen. What we are seeing is a profound state of economic injustice.

So what are the building blocks that we need to put in place now if, by 2030, we want those young people to experience an economy that is wired for both success and justice?

First, we need an education and skills system that equips people for a tumultuous job market dominated by technology, and employers who are prepared to develop the skills of their employees.

Second, we need a fairer tax system where those who benefit most from the economy — whether through income, wealth or investment — pay their fair share.

Third, a way of using growth to decarbonise the economy, significantly reducing its dependence on fossil fuels, and look after citizens in old age.

Fourth, new ways to improve pay in both the public and private sectors; and fifth, a programme that expands the housing stock at price levels that are genuinely affordable and builds genuine, sustainable community.

I believe that the country must renew its values so as to face up to the problems honestly, find the courage to confront them boldly, and act with vision and determination effectively to seize the opportunities that lie ahead.

We can shape our economy through the active choices we make as a society. The incremental effect of wise and good small decisions can transform us. The next generation deserves an economy where abundance and prosperity are joined with justice. We all have a part to play, and an interest in delivering it.


The writer is Archbishop of Canterbury and a member of the IPPR’s Commission on Economic Justice, whose interim report is published today