Labour's Shadow Minister for Universities, Science and Skills yesterday called for government, businesses and higher education to work together to forge an "opportunity economy, not just for some but for all".
In a speech at the Oxford Martin School, 'Inclusive Growth: How New Ambitions and New Alliances Can Rebuild the Opportunity Economy', Liam Byrne said there was a "chorus line" of people calling for change in how the proceeds of hard work were shared in Britain. He warned of the risk of continued inequality, which he said had been highlighted not only by economists and politicians, but also by trade union and faith leaders.
"The bald facts for families here in Britain are well known. The great wage crash is now almost proving as damaging to workers’ livelihoods as the global financial crisis caused by the banks. It has destroyed eight times more real income since 2008 than the financial crash, and average earnings are now £1,600 lower per year than they were at the last election.
"The average family has to work two hours extra each week, just to make what they did four years ago. All these gains in productivity and creativity haven’t been fairly shared. They’ve gone to those at the top. At this rate, most households won’t win back their pre-recession living standards until 2020."
Describing the current depth of inequality in Britain, he said impoverished families were forced to send children to school without breakfast, while the country's corporate bank accounts contained £440 billion in cash. "How did we create a country where corporate bank accounts are full – and childrens’ stomachs are empty?" he asked. "Is it any wonder people feel ‘the deal has broken down’?"
Fears were growing, he said, for a future where young people would graduate with huge debts to pay back, with no guarantee of a skilled job that would pay well. And he argued that creating a functional 'knowledge economy' was even more urgent in light of the predicted increase in automation of jobs over the coming two decades.
Private sector involvement in solving these problems, he said, would require the "enlightened self-interest" shown by the non-conformist entrepreneurs of the Victorian era, such as William Lever, who put in place the eight hour day, profit sharing, secondary and technical education, pensions, homes, health insurance and sick pay. A number of "win-win" commitments were needed for business and government, he said, including increased productivity, new trade deals, investment in trade-enhancing infrastructure, more innovation, less short-termism in financial markets, for large corporations to pay their fair share of taxes, and for all regions of Britain to be involved in inclusive growth.
Concluding, he said changes to capitalism should not be shied away from for fear that they could spell the end of that ideology. Britain needed, he said, "a more inclusive capitalism, where work once again commands its just reward", adding: "It's time to get round the table and talk."
Mr Byrne also praised the work of the Oxford Martin School in his speech, saying the school was working on "the most important questions of the day" and "looking not just for ideas but for solutions".