How do we fix our broken economy?

·43 min·4 clips

Torsten Bell explains why Britain's 15-year wage stagnation is an economic anomaly not seen since the Napoleonic era.

The episode begins with Ed Miliband and Geoff Lloyd introducing their location at the Resolution Foundation headquarters in London. They explain they'll be speaking with Torsten Bell, director of the Resolution Foundation, and Carys Roberts, director of the IPPR, about two major reports: the IPPR's 2018 Commission on Economic Justice and the Resolution Foundation's 2022 Stagnation Nation report. The hosts start by asking about the current cost of living crisis, with Bell describing it as the worst two-year period on record, featuring 7% income falls averaging £1,700 per household. Roberts adds that health issues like long COVID are exacerbating economic problems. The conversation then delves into deeper structural issues, with Bell explaining that Britain combines the highest inequality in Europe with 15 years of wage stagnation unprecedented since Napoleonic times. Roberts discusses how weak income growth and public services left Britain vulnerable to shocks like the pandemic. The guests explore whether inequality causes stagnation or vice versa, with Roberts arguing that fairer economies can be stronger and more stable. Bell emphasizes that Britain's economic problems stem from badly handled transitions in the 1980s rather than inherent trade-offs. A significant portion examines Britain's economic structure, with Bell describing the country as a 'services exporting superpower' - the world's second-largest services exporter after the US. He explains the implications of this service-dominated economy, including regional productivity gaps and housing pressures. Roberts discusses how government can shape emerging sectors like life sciences and electric vehicles. Both present policy solutions: Roberts outlines IPPR recommendations including a Citizens' Wealth Fund, higher minimum wages, and rebalancing taxation from income to wealth. Bell emphasizes improving non-tradable service jobs through better conditions and addressing gendered inequalities in care work. The conversation touches on political strategy, with both guests stressing the importance of public engagement and learning from international examples. They conclude optimistically, noting that many comparable countries are both richer and more equal than Britain, suggesting improvement is possible.

As heard by us

A careful debate on what Britain can borrow from Germany without pretending it can become Germany.

The review frames the episode as a practical test of economic borrowing: whether ideas associated with Germany can survive contact with Britain as it is.

Read the full review in PlayNext →

Why you'd press play

Want a UK economy that fits Britain as it is, rather than an imaginary Germany?

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from Reasons Revisited