Breaking the cycle on inequalities
In my working life, it has often seemed that the UK is going to hell in a handcart, and in the last 20 years the economy has been hit by austerity, recession, Brexit and Covid.
I write today in the context of increasing strike actions, inflation, soaring energy prices, persistent labour and supply chain shortages, forecasts of a stagnating or recessionary economy, decades of public under-investment and low productivity. All in the knowledge of the undeniable fact that we are one of the world's most centralised and most unequal economies, and that these inequalities are getting worse.
I am sure that many of those who struggle daily to put food on the table in grotty accommodation in dead-end places with no opportunities and no hope might think we have already arrived at that hot destination. In such times, facing such challenges, we turn to our leadership for a clear, long-term vision to take the country to a better place. An agreed destination. In the last election, Brexit and its aftermath-led swathes of voters in our decimated, post-industrial heartlands (the ‘Red Wall’ as it was termed) made an unprecedented leap of faith in order to believe that there could be a better future.
But we do not have a compelling, long-term vision, with the necessary focus to turn the dial. Nor do we have a collectively agreed destination. And from my perspective, these are the two over-arching priorities that we face as a country.
The government’s long-awaited answer to the first was revealed with the release of the Levelling Up White Paper. It is so deep and dense it takes time to absorb, understand, reflect, and then step back and look at it from a distance. The picture painted is of the UK being an unparalleled success story, which also has place-based inequality of opportunity for people to flourish and enjoy a long, healthy and fulfilling life.
Those in relatively privileged positions, whether through birth, inheritance, hard work or just pure luck, may not have a clue about what place-based inequality in our country means. However, we need to look to, and face the facts.
Over four million children live in families earning 60% of the median UK income – and more than two thirds of those children are in working families. The poorest 20% of households earn less than 7% of total income – and if you are in low-paid work, you have an 80% chance of still being low paid 10 years later. In Torfaen in South Wales, one in 44 under-18s are in care, in Blackpool it is one in 50. If you are born in East Dunbartonshire, you are likely to live 28 years longer than a birth in Calton. The difference in healthy life expectancy within the North East is almost as large as it is between the North East and Surrey.
From a wider business economic perspective, two thirds of the UK workforce is employed in businesses with productivity below the industry average, regardless of sector or size of business. At city level, our businesses lag well behind the EU, with Munich and Frankfurt 80% more productive. GDP per capita is 16% lower than the OECD best performers, productivity 10% lower despite our working some of the longest hours in Europe, and GDP in London and the South East effectively counterbalances the whole of the rest of the UK combined.
This brings me on what the destination for our country should be. We saw, both in the referendum leading up to Brexit and during Covid, an unprecedented level of citizen engagement. Both topics consumed our news, our screens, our social dialogue across the nation for years. We vigorously debated the rights and wrongs, the pros and cons of leaving or remaining in Europe, we argued about whether we should shut down or open up, the penalties for dissenters against policy, and were collectively grateful for the amazing fortitude of essential workers, especially in the NHS. Whether we were well informed about the facts of either is another matter, but my point is we had the debate.
Why can we not have the same discussion, or at least try, about the future of our country? There is simply not enough money to tackle all of the dozen different missions set out in the Levelling Up White Paper, and the government gives no steer on the priorities. Surely we, as citizens, businesses, academics and policy makers, must try to find some consensus on the most important two or three things that we should focus on, and what the outcome of that focus looks like in reality a generation or more down the road? Only then can we truly hold politicians of every hue to account in delivering it.
Is it more important to increase literacy and numeracy standards, or reduce carbon emissions? To reduce violence and neighbourhood crime, or reverse the decline in manufacturing? To improve the health of both children and adults, or revive high streets, restore local community pride, and support businesses to grow? To invest in innovation and skills, or high-quality affordable housing? Do we want the convenience of a just-in-time economy at the mercy of stretched and fragile supply chains, or one based on fundamental resilience? What combination is going to deliver – over time – the most meaningful impact on those left behind in our society, their children, and the economy?
But how can we start this debate, in which all voices are heard, and reach a conclusion on what we want the UK to look like in 25 years, if there is an information deficit on all our biggest challenges? I simply do not believe that we as a nation are apathetic or unwilling to engage, because Brexit and Covid robustly proved that was not the case. I do believe that people, both collectively and individually, want things to change, want greater social cohesion and social justice, and to be in a handcart to a demonstrably better place than we are currently in.
Particularly in the absence of a focused vision from our political overlords, we need to better, and more honestly, educate and engage our population about the choices that we face to arrive at some agreed long-term priorities.
Bev Hurley CBE is Chair of the Institute of Economic Development (IED). Bev is speaking at the IED Annual Conference 2022, ‘Supporting the Development and Levelling Up of Local Economics’, on 6th October. Tickets are available to IED member and non-members. Book your place here.