Britain’s most senior clergyman, the Archbishop of Canterbury, believes that Britain’s economic model is “broken” and that the country is at a “watershed moment” where choices about the future must be made to ensure that the gap between the country’s richest and poorest does not widen further.
Writing as part of a new report from think tank, the Institute of Public Policy Research, the Most Reverend Justin Welby said that Britain’s economy system is effectively not fit for purpose, benefitting the haves, and punishing the have nots.
“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,” Welby said in comments released as part of IPPR’s “Time for Change: A New Vision for the British Economy” report.
“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.”
IPPR’s report argues that while average GDP per capita has grown 12% in the last seven years, the average earnings per person in work have actually fallen around 6%, suggesting that wealth is not being spread anywhere close to evenly. The same has also happened over a longer time period.
“Between 1979 and 2012, only 10 per cent of overall income growth went to the bottom half of the income distribution, with almost 40 per cent going to the richest tenth of households,” the report said.
“The UK economy no longer translates economic growth into rising earnings. Gains from growth have gone largely into profits rather than wages, and the UK economy is now in the longest period of earnings stagnation for 150 years,” it adds.
IPPR’s report echoes the view of Bank of England Governor Mark Carney, who in December last year talked of a “lost decade” for Britain where, thanks to stagnant wage and productivity growth Brits are no better off today than they were prior to the onset of the financial crisis in 2008.
“We meet today during the first lost decade since the 1860s. … Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations, and striking inequalities,” Carney said.
Archbishop Welby’s comments are by no means the first time he has intervened in the UK’s economic debate. Welby famously said in 2013 that he would effectively help to try and put much maligned payday lender Wonga out of business, by assisting credit unions which compete with the firm.
Welby — who worked in the oil business before becoming a clergyman — was later left embarrassed after it emerged that the Church of England had investments in funds which provided money to Wonga.