The UK economy is stagnating, with no GDP growth from July to September this year, according to the Office for National Statistics. Productivity has barely shifted since the Global Financial Crisis of 2008, having risen by just 1.7% – an alarmingly low rate in comparison to the 27% increase in the 16 years prior to 2007.
It’s important to remember that these headline economic metrics reflect all of our aggregated activity and what is going on in all our lives. All of us are the economy.
No surprise, then, that the UK economy is stagnant. Social indicators are troubling. This year we’ve witnessed record levels of destitution; nearly 2.5 times as many people as in 2017. Homelessness is up by 74% since 2010. Many face a ‘postcode lottery’ over essentials, from childcare to ambulances and buses. When it is a struggle to live healthily and access the things we need, it is impossible for the wider economy be productive and flourish.
Many of these problems stem from insufficient investment in key public services – all of the things needed to keep us well, educated, safe and secure. Austerity cuts in the 2010s were a turn for the worst. If the UK Government had invested at the same rate as the G7 average since 2006 it would have spent an extra £208bn; including private sector expenditure drives the total to £562bn. The Institute for Public Policy Research describe Britain as afflicted with ‘investment-phobia’. Organisations of different political leanings have noted the consequences, including the Institute for Government’s damning analysis of the state our public services.
Not only have people in the UK suffered as a result – the Government has shot itself in the foot with its backward economic thinking. With falling incomes and slowed growth, tax revenues have dropped sharply, while the budget deficit has remained high.
In his Autumn Statement later today, the Chancellor will outline the Government’s economic strategy – a moment of opportunity to change course and begin reversing many wrong decisions.
The Social Guarantee has been proud to join and showcase We Are the Economy, a campaign driving home the fact that the economy can only thrive if there’s urgent investment in our essential public services and green infrastructure. The economy cannot be healthy unless we can all access the things we need to stay well. Public services that deliver life’s essentials are a prerequisite for productivity and growth.
Like the human body, the economy is a complicated system made up of many interdependent, interacting parts. When the body is starved of the things it needs to function – food, water, rest –
it becomes sick and unwell. The economy will do the same if people and communities are deprived of essentials – good healthcare, housing, education and transport. To live a long life the body needs regenerative resources and to be treated with care. Likewise, the economy will never prosper unless the human and natural resources on which it depends are properly nurtured.
Many organisations and individuals have released videos, sending messages to the Chancellor about what he should be doing with the Budget to safeguard the wellbeing of people and the planet. These include our overarching video, Caroline Lucas MP on a Green New Deal, We Own It on healthcare, the New Economics Foundation on energy, Nadia Whittome MP on a green economy, the Equality Trust on inequality, Prof. Michael Marmot on public health, Tax Justice Network on progressive taxation and the Women’s Budget Group on childcare. There’s also an Open Statement with over 70 signatories, including high profile politicians, economists and academics.
The coalition making up We Are The Economy call for the Chancellor to finally restructure the economy and address the crises that shape life in the UK, affecting living conditions and the environment. We repeatedly hear the same lines from both sides in Parliament: that the money needed to invest isn’t there and that we are confined by fiscal constraints. We know this isn’t the case. For a healthier population, economy and planet, investment in green public services can’t wait any longer.