IPPR report on UK economy backed by Helena Morrissey

Shutterstock/Zoltan
Gabor

• The UK economy is in need of “fundamental reform”
  following a failure to raise living standards and address
  inequality since the 2008 financial crisis,
  a report has said.
• The IPPR commission on economic justice was put
  together by leaders in society and industry including Legal and
  General’s $1.3 trillion fund manager, Helena
  Morrissey.
• The report called for a rebalancing of power towards
  workers and trade unions, with more government intervention and
  devolution of decision making from Whitehall.
• Morrissey said she agrees with the thrust of the
  report: “I don’t think you’ll find many in business, or the
  City for that matter, who think the economy is perfect… Like
  me, they think we need a more responsible and fairer form of
  capitalism,” she said.

A “fundamental reform” of the UK economy as radical as Labour’s
post-war Keynesian reforms and Thatcherism in the 1980s is needed
to address inequality and failure to raise living standards in
the UK since the 2008 financial crisis, a
report from major  has said.

The IPPR commission’s report on economic justice,  put
together by leaders in society and industry, including the
Archbishop of Canterbury Justin Welby, and leading City fund
manager Helena Morrissey, delivered a damning verdict on the
state of Britain’s economy.

It criticised a model that relies on household debt and property
prices, and where sectors of the economy are stuck in a “rut”
with low wages and high levels of inequality, which see some
households thrive while nearly a third of the UK’s children live
below the poverty line after housing costs.

The report calls for a “rebalancing of power: from corporate
management towards workers and trade unions, from short-term
finance towards long-term investors, from Whitehall towards the
nations and regions of the UK.”

“Travel across the UK today and it is impossible to escape a
palpable feeling that the economy is not working for most
people,” the report said, adding that we need to “achieve ‘escape
velocity’ from an economy that delivers neither prosperity nor
justice, to one that achieves both.”

The commission proposed a number of reforms which included:

• An increase in the real Living Wage at £10.20 in London
  and £8.75 outside the the capital.
• A strategy to boost national investment to £15 billion
  a year more in line with the G7 average of 3.5% of
  GDP.
• More effective corporation tax and a rule that
  companies with over 250 employees should have at least two
  workers elected to their main board.

The IPPR is a think tank that provided agenda forming policy
proposals for the Labour governments of Blair and Brown, but has
since drifted away from the party.  This commission on
economic justice was formed two years ago after Brexit, to
propose a path forward for the UK.

The release of the report comes almost exactly 10 years after the
onset of the 2008 financial crisis .

Helena Morrissey, manager of Legal and General’s $1.3 trillion
investment fund,
told the Guardian: “We’ve had some very frank discussions on
the commission about Britain’s economy,” adding that she backs
the thrust of the report.

“I don’t think you’ll find many in business, or the City for that
matter, who think the economy is perfect… Like me, they think we
need a more responsible and fairer form of capitalism,” Morrissey
said.

“The idea of sitting back and discussing radical proposals was
appealing… It is clear the world has changed in the last 40
years and we need to be less command and control. We need to
increase the levels of investment. We need to address the needs
of people who have been left behind.”