Britain’s economic model is “broken” and the nation is at a “watershed moment”, the Archbishop of Canterbury has warned as Britons face the longest period of stalling wage growth for 150 years.
The Rt Rev Justin Welby said “fundamental reform” on the scale of the 1940s and 1980s is required in a report backed by business leaders.
“Our economic model is broken. Britain stands at a watershed moment where we need to make fundamental choices about the sort of economy we need,” he said.
“We are failing those who will grow up into a world where the gap between the richest and poorest parts of the country is significant and destabilising.”
The report by the centre-left think tank the Institute for Public Policy Research’s commission on economic justice warns “the UK is the most geographically unbalanced economy in Europe”.
It said gains from economic growth are being distributed “unequally” with most going to corporations and the richest in society, and being diverted into profits rather than wages.
“Economic growth no longer leads to higher pay,” the report said.
“Young people today are poorer than previous generations at the same age. For too many people and parts of the country, the ‘economic promise’ of rising living standards has been broken.
“The economy is suffering from deep and longstanding weaknesses, which make it unfit to face the challenges of the 2020s.
“This is, therefore, the moment for new, radical policy options to be debated.”
It calls for an urgent public debate on issues including taxation, improving the education system, access to housing, the role of banks and the financial sector, the power of trade unions and the market dominance of internet giants such as Amazon, Facebook and Google.
The commission – which includes John Lewis chairman Sir Charlie Mayfield, Trades Union Congress general secretary Frances O’Grady and Siemens UK chief executive Juergen Maier among its members – will publish its detailed policy recommendations in autumn 2018.
A Treasury spokesman said: “Employment is at a record high, the deficit is down and inequality is at a 30-year low. We are proud of this record but there is more to be done.
“That is why we are investing £23bn in infrastructure, R&D and housing while also reforming technical education to prepare for the high-paid, high-skilled jobs of the future.”