As Brexit Dominates, Its Causes Are being Forgotten

By Francis Northrop – New Economics Foundation: The perennial and tragic irony is that the very conditions which led to Brexit are being eclipsed by the government’s total preoccupation with it.

At the beginning of the month, the government suffered a double blow. The entire board of the Social Mobility Commission resigned, citing lack of progress towards a ‘fairer’ Britain. The very next day, the Joseph Rowntree Foundation reported that 14 million people in the UK – nearly a quarter of the population of one of the richest countries on earth – live in poverty. Attention has since returned to Brexit. But that is the perennial and tragic irony – the very conditions which led to Brexit are being ignored because the government is consumed by it. Clearly we cannot ignore the social and economic crisis in this country any longer.

The Prime Minister seemed to recognise the need for urgent action last year when she announced from the steps of Downing Street her intention to tackle “burning injustice”. But look a bit closer at her language on that day, and you may spot the seeds of failure. “We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you,” she said. The emphasis was on “your talents” – implying that those who do not have whatever the passing whims of the modern economy deems ‘talent’ can “go whistle”, to adopt a phrase.

She then described her predecessor’s legacy as “not about the economy but about social justice” – as if these two things have nothing to do with each other. At the New Economics Foundation we know from our work in over 100 towns and cities that economic and social problems are inextricably linked.

 

Sure enough, 18 months on from that speech, the country burns ever more fiercely with injustice. And if you look at the government’s approach to improving social mobility or tackling inequality, you can see why.

 

Take the government’s industrial strategy, announced last week. Here was a chance to start addressing some of the country’s most fundamental imbalances. Our own recent work on the division between towns and cities found that many places outside of the main cities are being held back by chronic underinvestment. These places are home to the backbone of the British economy, made up of micro, small and medium-sized businesses which create local and national prosperity. They are full of entrepreneurialism, but it is being stifled. And the wider economy in these places suffers from low pay and low productivity despite delivering the goods and services which are essential for people to live well – food, retailing and distribution, health, education and welfare.

But instead of recognising the untapped potential of this resilient web of activity across the country, and giving it the boost it needs to thrive, the industrial strategy pursues a well-trodden path. Disproportionate amounts of support and investment will go to ‘key growth sectors’ like biotech and satellites, which are inevitably concentrated in the cities and research centres which need it least.

This was a big opportunity for the government to do something about “burning injustice”. Sadly, it wasn’t taken – the government’s usual approach to thinking about social mobility shows you why. Justine Greening’s response to the resignation of the Social Mobility Commission board was to talk about improvements in education. Of course, education is important. But anyone who thinks you can deal with the fundamental inequalities and imbalances of the country with a slight uptick in attainment in schools doesn’t understand the nature of the modern economy.

The real answer is hiding in plain sight. It is everywhere, in every coastal town, commuter village, urban neighbourhood, former mining community and rural area. The answer can be found in the existing, untapped potential of people and places all over the country. We need to value local distinctiveness and the skills and resources of people where they live.

That means creating local investment networks, with new institutions capable of channelling investment towards local prosperity. It means strengthening local supply chains to give places greater economic prosperity and cultural identity. It means building infrastructure – particularly transport and housing – which is designed to support local places rather than drain them of value. And it means devolving powers to an appropriate local level so people can form their own, genuinely place-based economic strategies.

 

Central and local government have missed countless opportunities to pursue a more ambitious strategy which takes places and the people in them more seriously. The unambitious nature of devolution, recent Budget failures, and the long-awaited industrial strategy have all reinforced the divide between investment-heavy city centres and those places which are being denied the opportunity to flourish on their own terms.

 

In a country which still has significant wealth, where people’s living standards are declining, and where our record on tackling poverty is at risk of unravelling, not making the most of the resources we already have looks increasingly perverse.

 

 

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