Archbishop of Canterbury: Britain’s economy is ‘broken’
2 min read
The Archbishop of Canterbury has called for fundamental change in the way Britain’s economy is run as a new report reveals that UK growth is funding business profits as workers’ wages stagnate.
The research by the IPPR Commission on Economic Justice - of which Justin Welby is a member - found that although GDP per head has risen by 12% since 2010, average earnings per employee have fallen by 6%.
According to the think tank’s analysis the share of national income that has gone on wages has gradually declined since the 1970s, from 80% to 73%, while the share going to profits has increased.
This, the report concludes, puts wage share at its lowest level since the Second World War, which if the trend continues means young people today are set to be poorer than their parents.
The research also warned of geographical imbalances within the UK economy with 40% of output produced in London and the South East and average incomes in the North West, South West, West Midlands and Wales now more than 30% lower than in London.
Commenting on the findings Mr 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.”
Tom Kibasi, Director and Chair of the Commission on Economic Justice added:“The British economy needs fundamental reform. We don’t have a British economic model. We have an economic muddle. The persistent economic problems we have experienced since the 2008 financial crash won’t be fixed with a bit of tinkering.
“There is a growing consensus across business, trade unions and civil society that a radical new approach is now needed. Change should be guided by a new vision for the economy, where long-term prosperity is joined with justice for all. We want to see the widest public debate possible on our analysis and proposals.”
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