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The UK has some of the highest levels of wealth concentration in the developed world. It has an economy where most mature markets are dominated by a small number of players and the barriers to entry are far too high.
It is not an exaggeration to suggest that in many areas, from energy to banking to groceries, the UK has a monopolistic rentier rather than a market economy – a system in which certain individuals or small groups gain market dominance and excessive returns through anti-competitive practices. This conspires against innovation and is detrimental to the small and emergent businesses that generate growth and spread prosperity. Added to this, our education system, by specialising too early and often in the wrong areas, fails to produce students with fully rounded skill-sets. We are simply not equipping our future workforce with the means to safeguard our, and their, economic future. This is one reason why the real value of wages in proportion to growth in GDP continues to stagnate or fall. Our long-term productivity dilemma is a function of market capture and the effective de-skilling of the population.
We believe that shared prosperity cannot be achieved by simply tweaking the market. Britain needs significant demand and supply-side transformation, with new visionary institutions re-ordering our economy. We need long-term solutions that give power over wealth and assets, not simply handouts, to ordinary people. Central to this process of economic empowerment is an ethical, practical and adaptable education that gives people the skills to build their own businesses, or develop their own talents, rather than a conveyor belt to a service industry of low wage and less return.
New financial institutions to promote small business lending are required, and this involves smaller, more specialised and decentralised banks that can deliver advice as well as capital. We wish to explore ways in which all financial transactions can be linked to a wider social purpose and profit, which itself needs a transformation of the legal framework within which economic transactions take place. We believe that the future lies in the shaping of a genuinely social market which would be in consequence a genuinely free and open market. Internalising externalities and creating a level economic playing field in terms of tax paid and monopolies recognised and challenged, remains beyond the scope of contemporary governments to deliver. Such a vision requires new concepts. The viable transformative solutions lie beyond the purview of the current visions of both left and right in the UK.
A key opportunity to break both individuals and communities from various cycles of deprivation lies in securing sustainable work contracts and undergoing personal and professional development that will open up pathways to promotion and engaged compelling work. However, a major skills gap precludes many from entering into the workforce: many businesses are seeking skill-sets that are rare to come by, and many people have rare skill-sets and talent that many businesses do not recognise.
The financial crash of 2008 exposed Britain’s economic settlement as fundamentally broken. Inquiries undertaken immediately after the crisis exposed a culture in the banking industry that revered short-term profiteering over long-term national prosperity.
The past 30 years has seen the deepening concentration of ownership and a widening disparity of outcomes in the UK. Today, the country is divided between the few who are assetrich and receive exorbitant returns, and the many that have been denied access to meaningful assets while the relative worth of their wages has steadily declined. Recent analysis has put this divide into sharp perspective: the richest 1 per cent own as much in property, pensions and financial assets as the poorest 55 per cent, while this difference is further exacerbated by the ever-widening chasm in income levels. Unjustified by merit and result, but owing all to the leverage that built-in market advantage delivers, we are rapidly creating an economic serfdom that we thought long abolished.
Published: 05 October 2015Unfinished Business: The ownership agenda, thirty years on, is a ResPublica Essay published on Monday 5th October 2015 by ResPublica and trade body Co-operatives UK. It finds that more people...Download as PDF
Published: 23 September 2015ResPublica, in partnership with Age UK, The Mineral Wool Insulation Manufacturers Association and the Energy Bill Revolution, sets out a bold set of recommendations for energy efficiency policy. Britain’s energy...Download as PDF
Published: 16 June 2015ResPublica, in partnership with GallifordTry, Peabody, Places for People and Trowers & Hamlins, sets out a radical vision of double devolution to tackle the housing crisis. We are building less...Download as PDF
Published: 23 March 2015We are facing a cold homes crisis. One in every ten households in England are in fuel poverty; 2.28 million homes are struggling to keep warm. Many of those on...Download as PDF
Published: 03 November 2014ResPublica’s report ‘Climbing the Credit Ladder: Short-term loans as a path to long-term credit‘ was launched on Monday 3rd November in Parliament by Cathy Jamieson MP, Shadow Financial Secretary to...Download as PDF
Published: 24 July 2014A new ResPublica publication, launched today, reveals that businesses looking to become energy suppliers face major barriers to entry in the UK. 12 new businesses have entered into the domestic...Download as PDF
Outline Rebalancing the UK’s economy is an attempt to rectify what are seen as damaging economic distortions in Britain’s economic mix. The concept of this...