Justin Welby: Britain’s economic model is ‘broken’

Archbishop of Canterbury Justin Welby is calling for “fundamental” economic reform on the scale of the 1940s or 1980s, saying that Britain’s economic model is “broken”.

The Eton-educated former oil company executive said economic growth no longer leads to higher wages for many; and that profits are instead syphoned off by those at the top of the system.

He pointed out that, between 2010 and 2015, many workers saw their pay fall in real terms. At the same time, average pay for directors of Britain’s top companies rose by 47%.

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The archbishop was one of a panel of experts consulted by centre-left think tank IPPR for a report published today. The panel also included the heads of retailer John Lewis, electronics firm Siemens UK, management consultancy McKinsey and the TUC.

Writing about the report in the Financial Times, 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.

”In local communities where I have worked in Liverpool and the North East, living standards have actually fallen. What we are seeing is a profound state of economic injustice."

Solutions

The archbishop is calling for tax rises for the wealthy, and increased government investment in education, housing and green technology. He also urged action to improve wages.

Shadow chancellor John McDonnell said the panel’s findings drive home the “deep problems of the British economy”, according to the FT, while the Treasury said the Government was working to improve the British economy.

IPPR analysis suggests GDP has risen by about 10% since the 2008 financial crisis, yet disposable income per person has not increased.

’Tax the rich,’ says Cable

Vince Cable today makes his first major policy speech since becoming leader of the Liberal Democrats, says Bloomberg, and he will warn that growing inequality will tear the UK apart unless property and inheritance taxes are increased.

Cable is calling for “effective taxation of inherited wealth” and an end to “the large opportunities which exist for tax avoidance and arbitrage”, as well as reforms to council tax, says the news agency.