One of the underlying motivations behind the vote to leave the EU in 2016 is the idea that significant segments of society have been ‘left behind’.
While government appears to have done little as part of its Brexit strategy to address this, since the referendum inclusive growth has become a mainstay in policymaking, featuring in Philip Hammond’s Budgets and as part of national and regional industrial strategies.
Brexit uncertainty has not helped however with business reluctant to invest, particularly in human resources. There are now competing scenarios about Britain’s place in the world, but what does that mean for the communities expecting brighter economic future and the prospect for creating sustainable inclusive growth? And can more deliberative political debate help to deliver this?
Inclusive growth is a term used more by academics and policy wonks than voters or even business. But there are potentially huge benefits in terms of enterprise and innovation where there are greater opportunities for all citizens to participate in economic growth.
And in the wake of the referendum result on British membership of the EU, it seemed that government recognised the need to address economic inclusivity. That interest appears to have been eclipsed by the Brexit frenzy but there is just as much need now for inclusive growth and perhaps a more deliberative politics is a way to secure this longer-term economic stability.
It is worth reminding ourselves of the ambitions three years ago. On the doorsteps of Downing Street on 13 July 2016, Theresa May made her first statement as Prime Minister. Here is a flavour of what she told the nation:
“If you’re from an ordinary working class family, life is much harder than many people in Westminster realise. You have a job but you don’t always have job security. You have your own home, but you worry about paying a mortgage. You can just about manage but you worry about the cost of living and getting your kids into a good school.
If you’re one of those families, if you’re just managing, I want to address you directly… When we take the big calls, we’ll think not of the powerful, but you. When we pass new laws, we’ll listen not to the mighty but to you. When it comes to taxes, we’ll prioritise not the wealthy, but you.
When it comes to opportunity, we won’t entrench the advantages of the fortunate few. We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you… Following the referendum, we face a time of great national change.
And I know because we’re Great Britain that we will rise to the challenge. As we leave the European Union, we will forge a bold new positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few, but for every one of us.”
This was an important acknowledgement because the Referendum unveiled divisions in British society and economy that might otherwise have remained dormant. Skilled, educated, wealthier people overwhelmingly voted Remain.
Unskilled, less affluent, less economically secure people overwhelmingly voted Leave. Remember, there had been a general election just a year before which had seen David Cameron’s Conservatives make the case (successfully) that UK growth was one of the strongest of the world’s major economies, that employment was at an historic high and public finances were back on track.
Expression of dissatisfaction
What the referendum result demonstrated is that many people simply did not view this economic success as benefiting them. And there is a very good reason that the referendum, not the election, was the opportunity to express this dissatisfaction.
Leave campaigner Iain Duncan Smith unwittingly let the cat out of the bag in the small hours of 24 June as votes were being counted. He told Radio 4 listeners that the referendum was not like a general election because here ‘every vote counts’. It was true.
In a general election, most people vote for losing candidates; most constituencies do not change hands; parties are focussed on a small number of voters in a small number of marginal seats. The referendum then was maybe the first time in a lifetime that many voters would be listened to.
The referendum was a ‘changemaker’ opportunity that could not be missed. Unfortunately the referendum was far from deliberative. It emphasised vote rather than voice and failed to address the reasons people aligned with Leave.
But while voter discontent was recognised at the outset of May’s premiership, today the motivations for the way people voted has been all but forgotten in political discourse. Indeed, you really don’t have to listen to the news for very long these days before you hear a politician insisting that we must deliver on the instructions the British people.
For those at the forefront of maintaining the pressure on government to deliver Leave, this has come to mean the hardest of Brexits. It has come to be interpreted as leaving the single market and customs union and relying on World Trade Organisation rules.
The prospect of leaving the European Union without a deal has succeeded in bringing the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) together in warning of the great danger to the economy, to business and to jobs. This demonstrates that those arguing for a hard Brexit do so, not because they speak for business or those whose jobs could be lost, but because they advocate a particular political philosophy.
And the leading lights of European Research Group faction of the Conservative party, from Jacob Rees Mogg to John Redwood, include those whose vision for Britain is one of a small state, free market, deregulated economy; some kind of Singapore in the North Sea.
Time for inclusion
But as Theresa May’s deal falters and Britain’s membership of the EU is extended to 31 October, perhaps it is time to put inclusive growth back firmly on the agenda. After all, leaving without a deal has now been soundly dismissed by Parliament, the government and the EU itself.
Perhaps it is time to reconsider why sections of the electorate voted as they did. And this could also be an opportunity for business, the leaders of which have rejected the WTO model, to recognise the benefits of inclusive growth for their own prospects.
In fairness, inclusive growth has not been absent from political discourse and economic policymaking. Chancellor Philip Hammond’s 2017 Spring Budget acknowledged that ‘investing in skills and education is the key to inclusive growth – to an economy that works for everyone’.
Regional Industrial Strategies have also adopted inclusive growth as a way to meet local economic objectives. It all ties in closely with government’s preoccupation with productivity growth which has been comparatively weak in Britain for a decade. The truth is that there are human resources which have not been developed and which could contribute to business success up and down the country.
While the referendum was a wakeup call for inclusive growth, the massive uncertainty which has surrounded the Brexit environment has meant business has been reluctant to invest in research or indeed in training.
Furthermore when it comes to assets, figures from the Office of National Statistics show just how subdued business investment has been since the referendum. In December the ONS announced that investment had fallen for the fourth consecutive quarter for the first time since the economic crisis in 2008-9.
The six months reprieve given to Britain could be about more than arguing about the nature of Britain’s relationship with the EU. It could also be about the kind of economy we want to build. There is mainstream support for the virtues of inclusive growth but it has remained too far down the agenda.
Business should put itself at the forefront of this debate because it can only benefit from the long term dividends of an economy where even more citizens can contribute to their full potential.
During those six months, there is also an increasing possibility that momentum for a second (or confirmatory) referendum will become irresistible. If this is the case then not only should inclusive growth be part of the debate but it is essential that the campaign is conducted in a more deliberative way.
The concept of deliberative democracy shares many of the virtues with inclusive growth including choice, freedom, access and opportunity. It is noteworthy that MPs such as Stella Creasy have proposed some form of Citizens’ Assembly to break the Brexit deadlock. This would be a forum for citizens to discuss and take responsibility for decisions.
If inclusive growth is to become embedded so that it creates the greatest benefits, it is time to combine its virtues with those of deliberative democracy. This would mean addressing the real concerns of voters in a way that involves us all in properly considering the solution.