Guest blog by Ikhlas Merabti, who completed a summer placement at CPP through the Social Mobility Foundation.
Britain is in an economic catastrophe. The UK economy has stagnated since the financial crisis of 2008. The UK has unquestionably had one of the poorest labour market recoveries from the pandemic in the G7. A new model is what the UK needs to overcome our economic stagnation and tackle inequalities, and inclusive growth can be that model.
Labour’s Shadow Chancellor Rachel Reeves’ economics plan – which she calls ‘Securonomics’ – is an inclusive model of economics that celebrates the role of an active state in tackling economic stagnation and the brutal cost-of-living crisis we are experiencing today. The Guardian columnist, Martin Kettle supports Securonomics, writing recently that this ‘economic thinking is a return to sanity’.
Securonomics strongly supports inclusive growth; at its core is an ambition to work with communities and industries in the UK to deliver growth. By focusing on quality and impact of growth and not just growth as a means to an end, Reeves demonstrates a commitment to ensure that inclusive growth is delivered in the UK. Theoretically, Securonomics could help the UK, economically and politically; we must therefore welcome Reeves’ plans.
Reeves hopes to make Britain a leader in sustainable and clean energy through her economic strategy. With the Labour party committed to delivering the highest growth in the G7, its Green Prosperity Plan and its £28 billion budget can support industries to create new employment opportunities, build valuable energy security and reduce energy costs and bills. This would use key principles of inclusive growth to enable the UK to transition to a net-zero economy.
Under the Securonomics plan, the National Wealth Fund would invest in major gigafactories to support the green industries of the future. Offshore wind farms are expected to encourage investment in Britain’s ports including those in the Humber, the Forth and Tay, Southampton, East Anglia, and Belfast. This ultimately promotes inclusive growth as it would create employment opportunities across the UK.
Securonomics also involves reforming public services to fight economic stagnation and to support more people into work. Reeves is determined to invest into the NHS efficiently by granting workers higher wages and better job security. A stronger NHS also means more people are healthy and able to work. Similarly, Reeves plans to build better schools. Good schools can equip and teach future employees the skills they need to succeed in the labour market. Reeves’ public service reforms would support inclusive growth because they involve improving the efficiency, effectiveness, and accessibility of public services to better serve all segments of society, especially marginalized and vulnerable populations who may otherwise be excluded from growth.
Securonomics and inclusive growth align, and if implemented would undoubtedly benefit the UK economy by growing overall economic output while ensuring that the benefits of economic development and growth are widely and equally distributed across society. But for all the benefits of Securonomics outlined here, for them to take effect the Labour party must first win power at the next General Election. Critically, it must also plan how to fund the significant public investment that such an ambitious economic plan will demand. Although Labour is performing well in the polls, nothing is guaranteed until Labour wins the election. And even then, the question of how to fund the platform for growth needs to be answered.