The UK Government is betting on growth. Even if the Chancellor gets the economy moving, this wager risks leaving many communities and individuals behind.
At Carnegie UK, we urge policymakers to value other objectives than just increasing GDP. We press the case for measures such as community cohesion, environmental impact, and local democratic accountability. To put it lightly, these do not appear to be driving our economic policy.
While the broad direction of travel comes as no surprise given the approach trailed by Liz Truss during the recent leadership campaign, the scale of the changes announced last week have shocked people across the political spectrum. The ensuing economic chaos shows that the markets also have little faith in the approach.
By cutting personal and business taxes, rolling back regulation, and capping energy bills, the new Chancellor says he can bring an end to a cycle of stagnation. But – excepting the action on household utilities – the majority of commentators appear united in concern that the plans won’t work. Even worse, that future generations will be picking up the bill for tax cuts that don’t allow Governments of the future to invest.
Here at Carnegie UK, we share this view. We also fear that interventions like the abolition of the highest income tax band in England will mean that the proceeds of any growth are so unevenly distributed that they exacerbate inequality, resulting in plenty for some, but destitution for many. This outcome is not just bad for the wellbeing of individuals, it also threatens our local communities and society as a whole.
At Carnegie UK, we are part of a wider movement that wants to see the development of a wellbeing economy, geared to achieve a good quality of life for all citizens, now and in the future.
This means recognising that the economy and the environment are interlinked and that a just transition is urgently needed to tackle two of the most critical issues facing us; the cost of living crisis and the climate emergency.
It means recognising that our economy hasn’t been working for many people, and that ongoing action is required to correct this imbalance.
It means acknowledging and acting on the duty we have to future generations, not saddling them with a public debt burden that diminishes their prospects for wellbeing.
Governments in Scotland and Wales are signed up to wellbeing frameworks that require them to demonstrate how they balance the needs of the economy with caring for the environment and each other. No such initiative exists at UK level, as the misguided Growth Plan all too clearly demonstrates.
As we wait to see the outcome of the new Prime Minister and Chancellor’s punt on growth, all those who share our vision for a more a nuanced approach must consider how we come together and marshal our evidence about why this matters for people and planet.
Sarah Davidson is chief executive of Carnegie UK
This article was first published by The Herald on 30 September 2022