inclusive growth

Growth = wealth? Not for everyone.

Yesterday the Chancellor of the Exchequer will stood at the dispatch box and argued that his plan is the one that will set this country on the path to prosperity for all. He’s not the first. He almost definitely won’t be the last. And yet here we are.

The climate emergency, austerity, growing inequality and political inertia mean that across the UK and beyond, many people and their families are struggling to make ends meet.  These are not new crises. And yet, for decades Chancellors have set out the ways in which they will deregulate, bulldoze, build, cut through regulation and overturn every conceivable stone in the pursuit of growth. Few are bothered about the quality of the economy they are nurturing, merely the upward trajectory. Often the most important question is missed: who benefits?

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We need a society which is on the up

The Social Mobility Commission has confirmed what many have long known – governments have failed to significantly reduce inequalities. The Brexit vote and the subsequent soul searching has finally brought many of these issues to the fore. The growing sense of disenfranchisement in the country and increasing gap between “haves and have nots” is now penetrating mainstream discourse, prompting a political rhetoric of an ‘economy that works for all’ where the benefits of growth are shared among the ‘many, not the few’.

What we have been doing has clearly not worked

The UK economy has not worked for all for a long time. Indeed our economic models for decades have tolerated, and been somewhat unconcerned, by high levels of socio-economic inequality. What we have been doing collectively to address challenges of poverty and inequality over the past two decades have clearly not worked. In its report Social mobility policies between 1997 and 2017: time for change, the Commission argues that successive governments have failed to make social mobility the cornerstone of domestic policy, and that long-term progress has too often been sacrificed to short-term change. A piecemeal approach has bought some advances, but a failure to develop a holistic policy approach has meant that gains have been lost as efforts have waxed and waned.

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  • RESEARCH

    Planning for social good 

    25th May 2017
    664.9kB     .pdf
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    • Metro mayors: three ways to reset local strategy

    Next week, on May 5th, newly elected metro mayors in six combined authorities begin their first day in office. This is an historic opportunity to reset policy and address longstanding economic and social issues, as Neil McInroy and Victoria Bettany outline below.

    To date, policy opinion and mayoral manifestos have offered a laudable, but often limited, set of tactical policy innovations, including cheaper transport for sections of the population, actions around a living wage, housing affordability and tackling youth unemployment. Given the scale of the challenge, these may not be enough to successfully reset strategic policy. Rather, three key things need to happen.

    1. Re-organise the economics of devolution

    Financial investment and return has dominated the economics of devolution, hence the focus on property development and land value appreciation in city centres and other hotspots. Indeed, this focus has been over-egged in devolution deals through economic agglomeration and ‘earnback’ on growth. If this trickle-down approach is retained, we can expect the deepening of geographic divides across the combined authorities, with little significant increase in new or decent jobs. Of course, a focus on financial return is a universal component to city success but it should only be a part of the mix, and not take undue precedence over other forms of economic development and social investment.

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    Inclusive growth: Making an economy work for a few more?

    The report from the RSA inclusive Growth Commission has now been launched – ‘Making our economy work for everyone’. Chaired by Stephanie Flanders, of JP Morgan Asset Management, this work sought to identify practical ways to make local economies across the UK more economically inclusive and prosperous. However, it is arguable that the ideas are limited in terms of wider social justice and economic resilience. Instead of making an economy work for everyone, it’s more likely that it will merely make our economy work for just a few more.

    For many years, economic development has been a thin gruel for social inclusion; based overly on economic growth (sometimes at all costs), trickle down and spatial agglomeration. So, it is heartening that the commission seems to have partly picked up on the ideas of CLES and others (you can read our RSA submission here). This includes the understanding (if not a truism) that investment in social institutions and people is as important as investment in economic infrastructure; or, how the spheres of the economic and the social are not separate, but linked. They also highlight the excellent practical work CLES are engaged in: Community Wealth Building and Anchor Institutions.

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    Inclusive growth is radical – here’s why 

    CLES chief executive Neil McInroy published a blog last week reviewing the Inclusive Growth Commission’s final report. He recognised the value that the Commission has added to policy and public debate about these issues, but also asked some important questions. This post is my rebuttal to some of the challenges posed, having worked as lead researcher on the Commission (I am not representing the Commission’s ‘official’ voice here – just my own). The thrust of my argument is that the Commission has offered a strong alternative to the economic orthodoxies of the past, and has advocated a set of reforms that would be genuinely transformative.

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  • CLES submission to RSA Inclusive Growth Commission

    23 Feb. 2017
  • RESEARCH

    CLES submission to RSA Inclusive Growth Commission

    23rd February 2017
    368.5kB     .pdf
    Inclusive growth has grabbed the attention of all those who wish to build an economy for all. This is our submission to the RSA In...

    • The social city

    ‘The only thing that trickles downward is the lives of people, not the wealth’. 

    So said Oriol Estela-Barnet the Director of PEMB Barcelona during my visit to Barcelona. In this, I was reminded of the work of the British Geographer, David Harvey  – who wrote in the Limits to Capital that ‘The accumulation of capital and misery go hand in hand, concentrated in space.’

    For 30 years, cities have ridden a wave of global economic buoyancy. This prompted a ‘good times’ urbanism which has worked for a few, but not the many – with inequality, poverty and misery now on the rise in many cities around the world. We need a new urban response. We need to build a more social city.

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  • Interview: From 'boomgoggling' to inclusive growth

    14 Oct. 2016

    • Solving poverty: the promise of inclusive growth?

    In her conference speech, Theresa May committed her government to achieving ‘an economy that works for everyone’. In this, she is touching on a point that many of us have known, and sought to respond to, for decades – that poverty and inequality persist, that this is unacceptable and that the prevailing economic model leaves too many people behind. The question is, how far is the government prepared to go in solving systemic poverty and inequality?

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    Post-Brexit we need to build an economy for the many

    Framed by austerity, the economic reality behind many voters choosing Brexit was a future of little promise – insecure jobs, insecure public provision, insecure futures. As a result, many leave voters felt that they had little or nothing to lose. On the back of an economic recession eight years ago, insecurity and a social recession has been built.

    The EU referendum has shone a light on the failure of the treasury’s local economic and devolution model. The ‘devolution revolution’ may have beguiled some, but it has passed many by. The promised ‘northern powerhouse’ was a canny brand which few saw any tangible outcome from. Indeed, I know of many economic development practitioners who felt that austerity framed devolution and its bullish treasury-backed city agglomeration ‘growth at all costs’ approach was flawed. However, they rightly got on with it, longing for it to be just a start, and something to grapple, amend and make progressive.

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  • RESEARCH

    CLES is 30

    23rd June 2016
    153.0kB     .pdf
    The Centre for Local Economic Strategies (CLES) has been at the forefront of undertaking incisive policy research and analysis for...

    • The case for an inclusive state

    Inclusive growth could help the poorest benefit more from economic expansion. This will require a state that invests in new infrastructure and backs local initiatives to support communities Inclusive growth is the new concept in town. The RSA have recently announced their Inclusive Growth Commission. They seek to identify practical ways to make the UK more economically prosperous and inclusive.

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    An economy for the many, not the few: the focus for inclusive growth?

    In recent months, there has been a global recognition that we must make growth more ‘inclusive’. In the UK, this has culminated in the RSA announcing an inclusive growth commission.

    This is welcome. There is no doubt that in recent years we have neglected what we have known for decades – namely that economic growth does not guarantee poverty reduction and that inequality hampers growth. Indeed, high levels of welfare and low levels of spending power is a shaky basis to a local economy. An inclusive local economy needs the poor to not be poor.

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