A new book titled “Ending Stagnation,” resulting from The Economy 2030 Inquiry by the Resolution Foundation and the Centre for Economic Performance at LSE, and funded by the Nuffield Foundation, suggests a transformative economic strategy for the UK.
This strategy aims to overcome the country’s low growth and high inequality, which have led to a significant living standards gap compared to countries like France and Germany.
The inquiry highlights a 15-year period of relative decline in the UK, with productivity growth at half the rate of other advanced economies and wages stagnating.
This situation has been particularly challenging for low-and-middle income families, compounded by the highest inequality in any large European economy.
The proposed strategy includes leveraging Britain’s strength as a global services leader and prioritising investment in cities outside London to improve productivity.
It calls for public investment to reach 3% of GDP, alongside encouraging private investment through changes in pension fund management and adding worker representation on boards.
The plan also focuses on reducing inequality through measures such as raising minimum wage standards, improving job security, and reforming tax to target income and wealth more effectively.
Torsten Bell, chief executive of the Resolution Foundation, commented on the book’s findings: “Britain has significant strengths but faces a relative decline. A new economic strategy, grounded in reality and acknowledging necessary trade-offs, is essential. Closing the income and inequality gap with our peers could make typical households £8,300 better off.”
Stephen Machin, professor of economics at LSE and director of the Centre for Economic Performance, emphasized: “The UK’s challenges of inequality and stagnation are solvable. The Economy 2030 Inquiry offers a credible policy framework for a more equitable and prosperous economy.”
Alex Beer, head of portfolio development at the Nuffield Foundation, highlighted: “Britain needs a coherent long-term economic strategy focusing on investment in skills, quality jobs, effective labor market regulation, and a robust social security system. This approach is key to unlocking the potential of our cities and achieving shared prosperity.”
