From the Resolution Foundation comes a report on stagflation Britain.
This they say has resulted in:
Real wages grew by 33 per cent a decade from 1970 to 2007, but have flatlined since, costing the average worker £10,700 per year in lost wage growth.
Income inequality in the UK is higher than any other large European country.
Low growth and high inequality means typical households in Britain are 9 per cent poorer than their French counterparts, while our low-income families are 27 per cent poorer.
9 million young workers have never worked in an economy with sustained average wage rises, and millennials are half as likely to own a home, and twice as likely to rent privately, as their parents’ generation.
Half of shift workers in Britain receive less than a week’s notice of their working hours or schedules.
UK companies have invested 20 per cent less than those in the US, France and Germany since 2005, placing Britain in the bottom 10 per cent of OECD countries, and costing the economy 4 per cent of GDP.
Having averaged 33 per cent of GDP in the first two decades of this century, the tax take is now on course to rise over 4 percentage points by 2027-28: equivalent to £4,200 per household.
The Resolution Foundation offers this Fabian solution:
Britain must build on its strengths as the second biggest services exporter in the world, behind only the US, while protecting the place of its high value manufacturing in European supply chains.
Our cities should be centres for Britain’s thriving high-value service industries. But instead, all England’s biggest cities outside London have productivity levels below the national average.
Public investment in the average OECD country is nearly 50 per cent higher than in the UK. Tackling this legacy, alongside the net zero transition, requires public investment to rise to 3 per cent of GDP.
British managers too rarely invest for the long-term. Pressure for change should come from more engaged owners – a smaller number of far larger pensions funds – and from workers on boards.
Hospitality represents a higher share of consumption in the UK than anywhere else in Europe, because it is relatively cheap. Better pay for low earners in hospitality, paid for by higher prices that most affect better off households, will create a more equal UK.
Benefit levels have not kept pace with prices: cuts since 2010 have reduced the incomes of the poor by almost £3,000 a year. Shared prosperity means benefits rising with wages.
A rising tax burden should not just fall on earnings, but should be shouldered by other sources of income and wealth. Wealth has risen from three to over seven times national income since the 1980s.
Higher growth and higher taxes are needed to raise investment, rescue public services, and repair public finances. Higher investment should be funded by higher savings at home, not borrowing from abroad.
There’s no reason to doubt that the people at Resolution Foundation are well-meaning intelligent folk. However, how have they not realised that sticking plaster solutions on the open wounds of capitalism are not the answer to the ills of the British, and global, working class? It’s simple. It’s Socialism.