An argument widely made by those seeking to address racial inequalities is that policy is typically made without any assessment of the impact on different ethnic groups, and therefore without specific plans to counter racial inequality. This was a particular criticism of the UK government in relation to Covid-19, given the disproportionate vulnerability of BME groups. Equality impact assessments of policy when it is being made are now widely advocated.
There are now widespread calls for mandatory ethnic pay gap reporting for larger firms, in the same way as gender pay gap reporting.
Research on tackling racial inequalities shows the importance of mandated targets and positive action within equality law, the de-biasing of recruitment and progression processes, mentoring and leadership programmes, diversity and unconscious bias training, and the adoption of explicitly anti-racist and action-oriented approaches to organisational culture. Adoption of the ‘Rooney rule’, under which at least one BME candidate is required to be shortlisted for job vacancies (originally introduced in the US National Football League) is often advocated.
By using social value criteria in procurement processes (requiring high quality practices from suppliers and contractors), governments and public bodies can mandate action on racial equality, including on low pay. Overall, however, more fundamental economic change is likely to be needed if the legacy of historic and structural discrimination is to be eliminated.
The Runnymede Trust’s The Colour of Money report provides an overview of racial inequalities in the economy, including in wealth, vulnerability to poverty, and employment. It argues that tackling racial inequalities requires measures to address low pay, poverty and poor housing in general alongside specific measures to tackle racial discrimination, particularly in the labour market. Ultimately structural economic change is needed to counter the longstanding effects of historical racism.
The report of the Intersecting Inequalities project and the Equality and Human Rights Commission’s report on the impact of tax, minimum wage and welfare reforms since 2010 both found austerity-related policies to have disproportionately impacted ethnic minority women and disabled people. They argue that policy needs specifically to be assessed for its impact on disadvantaged and discriminated-against groups, including the cumulative impact of policy over time.
The TUC, CBI and Equality and Human Rights Commission have issued a joint call for the government to introduce mandatory ethnic pay gap reporting, arguing that this would transform understanding of race inequality at work and drive action to tackle it in companies and government. Professor Susan Milner at the University of Bath argues that mandatory reporting is both necessary and feasible.
The Wales Centre for Public Policy has reviewed research on policies to tackle racial inequalities in the economy. They show the need for active workplace measures to counter discrimination and encourage anti-racist organisational cultures, and at an overall policy level for governments to engage in sustained action targeting institutions, workplaces and individuals, with effective implementation mechanisms, visible support from leaders, and better data collection.
Covid-19 lockdowns have caused incomes to evaporate for many sectors and households, as businesses are closed and economic activity falls. Many people are reliant on government grants and loans to avoid insolvency and defaulting on debts. The challenge is to prevent these debt burdens from leading to a financial crisis.
There are also concerns about equity; one analysis toward the beginning of the pandemic estimated that nearly half of the government�۪s furlough scheme would be spent on rent and debt repayments, ���amounting to an implicit bail-out of landlords and banks".
Central banks can cut interest rates still further, and continue to use asset purchasing programmes to shore up the wider system - otherwise known as quantitative easing. Governments can guarantee or write off all or a portion of loans made to corporations and households, and can also help to increase the incomes of households or corporations to ensure they are able to service their debts in the short term.
In Project Syndicate, economist Mariana Mazzucato explains how Covid-19 is exacerbating the pre-existing issues of debt sustainability affecting many advanced economies, and Jayati Ghosh examines how the build up of debt since the financial crisis has left the global economy more vulnerable during the pandemic (paywalled).
For the Progressive Economy Forum, academics Jo Michell and Jan Toporowski argue that the role of the Bank of England�۪s monetary policy in regulating the economy in practice has been overstated.
The Grantham Institute at the London School of Economics found in 2017 that the Bank of England and European Central Bank�۪s QE programmes were skewed towards high-carbon sectors.
Rather than either ‘green growth’ or ‘degrowth’, some economists have begun to use the term ‘post-growth’ to characterise an economic policy stance focused directly on achieving environmental sustainability and individual and social wellbeing.
A ‘post-growth’ society and economy would be one where economic growth – and its attendant consumption patterns – is not regarded as a good in itself. While some of those using the term believe degrowth is necessary, others are (in Kate Raworth’s phrase) ‘growth agnostic’.
Some analysts have pointed out that western economies have for some time been experiencing much lower growth rates than in the past, with the idea of ‘secular stagnation’ suggesting that this may be a long-term condition. So adjusting to a post-growth economy may be necessary, whether designed or not.
The dependence of current economies on growth to sustain employment and raise tax revenues has led some researchers to model a ‘post-growth’ economy which lives within planetary boundaries and focuses on redistributing wealth and improving wellbeing rather than growing output.
In a report for the OECD, leading economists argue that high income countries should adopt ‘beyond growth’ strategies focused on four paramount goals: environmental sustainability, reducing inequalities, improving wellbeing and system resilience.
In a Centre for the Understanding of Sustainable Prosperity (CUSP) paper on the ‘post-growth challenge’, Tim Jackson the warns how ‘secular stagnation’ (economic slowdown) may be the new economic normal.
The Institute for Ecological Economy Research in Germany critiques both degrowth and green growth approaches. It recommends instead a ‘precautionary, post-growth’ approach to delivering social well-being within planetary boundaries.
Tim Jackson and Peter Victor have developed macroeconomic models capable of describing a sustainable national economy operating within ecological limits.
The Zoe Institute has initiated a ‘policymaking beyond growth’ project seeking to show how economic and political stability can be ‘unbound’ from economic growth in order to pave the way for a sustainable prosperity.
The world faces many serious, interconnected environmental crises, such as the degradation of soil health, pollution and the mass extinction of species. These combine with climate breakdown to present an unprecedented set of economic and social risks to all countries. This is a profound challenge for governance and business and has been described as the ���defining challenge of our time�.
Taking this risk seriously will require far more than just treating these crises as isolated policy issues. Historically, responsibility for the environment has tended to be the focus of specific government departments. Business-friendly approaches, such as voluntary agreements and promoting deregulation, have often been prioritised over deeper change.
Many organisations have proposed economy-wide measures or approaches that would seek to hardwire environmental limits into the daily activity of governments and business. These include the UN�۪s 17 Sustainable Development Goals (SDGs), which are a potentially transformative global agenda for 2030 on poverty, development and the environment, but have not yet been adequately implemented by countries including the UK.
Other policy approaches include the concept of a circular economy, under which linear, throwaway business models are replaced with ones that regenerate nature and re-circulate materials. Other ideas include the better economic valuation of nature, incorporating this value into economic decision making, although this is practically and ethically complex.
IPPR warns that we are already living in the age of environmental breakdown which may cause the collapse of society and the economy, but also warns that decision-makers and key institutions are not taking this critical threat seriously.
The RSPB catalogues the failure of voluntary business agreements on the environment.
�ۍIPPR proposes a Sustainable Economy Act for the UK, which would set a range of environmental limits on economic activity. Separately it proposes a number of new institutions to manage the risk of environmental breakdown and increase resilience, including a nationwide Future Generations Act modelled on the Welsh Act.
There are major challenges for the development of new medicines in the coming years. Foremost among them is the need to ensure that treatments and vaccines are widely available and fairly priced.
The threat of antibiotic resistance is a major looming health crisis. It has been driven by the overuse of existing antibiotics and the lack of innovation in new ones. The drive for profits in the global pharmaceutical industry remains at the heart of the problem. The challenge is how to align this with the public interest.
The Covid-19 crisis has revealed the difficulties of global cooperation on pharmaceutical development. The UN�۪s attempt to set up an information pooling scheme to share intellectual property around vaccines has been strongly resisted by the industry. Rich countries are prioritising vaccine development for their own populations first.
Proposals for reform fall into three main categories. First, more publicly-directed pharmaceutical development models. Second, greater global cooperation on vaccines development and distribution. Third, limiting the risks of antibiotic resistance by reducing their overuse in human and animal medicine.
The Lancet�۪s Commission into Essential Medicines sets out its recommendations into how to make medicines affordable and globally available. It focuses on how to ensure the affordability and quality of existing medicines and how to speed up the development of new or missing ones.
The World Health Organisation�۪s Global Action Plan on Antimicrobial Resistance (AMR) calls for countries to unite in fighting the world�۪s ���most urgent drug resistance trend�. Its recommendations centre on the need for the sectors upon which human health depends, such as animal health, agriculture, food security and economic development, to be engaged in an urgent effort to improve antibiotic usage and public health.
The cost of bringing a new drug to market is an estimated $1 billion. Medicines usage is also expensive, with the NHS�۪s bill rising sharply in recent years and the costs of medicines in some countries accounting for up to 60% of health spending.
Proposals for improving pandemic planning focus on three areas. First, the better communication of risk, and avoiding “infodemics” of false information, to build public support for timely action.
Second, improving communication across government and ensuring that high impact, high likelihood risks like pandemics can be properly understood, planned for, and acted upon.
Third, international action in recognition of the global causes of pandemics and their disproportionate impact on the world’s poorest. Here, proposals for direct support include ensuring aid is better targeted to build healthcare workforce resilience and cancelling international debt.
The Institute for Government proposes structural changes to the UK government to better handle pandemic risk and responsiveness. In particular it highlights the problems of insufficient internal accountability and the constant movement of key experts between departments.
The United Nations calls for Covid-19 debt relief for the most exposed developing nations. It notes that debt relief was critically important for these countries prior to the pandemic.
The One Health Commission has a rolling list of materials about the benefits of a joined-up One Health approach for responding to Covid, including highlighting the relatively small economic cost of proper prevention versus the devastating economic losses.
Prior to the pandemic, UK banks lent a smaller proportion of their total lending portfolio to businesses than did banks in other European countries, with a higher proportion going to housing and real estate mortgages. This has helped fuel the growth of house prices while doing little to develop the UK's productive base.
Although bank lending to small and medium sized enterprises (SMEs) has risen sharply during the Covid-19 crisis, it is widely believed that the underlying problem - the difficulty many businesses have in accessing affordable loans from banks - may return once the crisis is over.
A widespread criticism of the UK's financial system is that there is insufficient provision of 'patient capital' - long-term finance for innovation and business development - with too many financial institutions seeking short-term returns.
Reform proposals range from stronger credit guidance policies, to steer lending towards productive sectors, to the development of publicly-owned and other 'stakeholder' banks focused on financing innovation and business development.
UCL’s Institute for Innovation and Public Purpose argues that governments should experiment with credit guidance policies to support business development. Such policies could limit the proportion of bank lending which goes to housing and real estate and require higher proportions of lending to go to non-financial sector businesses.
UCL's Institute for Innovation and Public Purpose has examined the role which publicly-owned investment banks have played in a variety of countries to provide patient finance for innovation and business development, and proposed the creation of a UK National Investment Bank. The centre-right think tank Onward has also called for the establishment of a national investment bank, arguing that this could unlock £16 billion in capital for investment in small and medium sized businesses, municipal infrastructure and project finance to level up lagging regions. The Scottish Government established the Scottish National Investment Bank in 2020.
Business academic Colin Mayer explains why the UK’s big four clearing banks are ill-suited to funding the long-term growth of small and medium sized enterprises and calls for a new state-backed venture capital fund.
A string of well-publicised failures and allegations of 'cronyism' (such as in test-and-trace and other Covid-related procurement) has brought attention to the government’s procurement practices and its use of 'outsourcing' to provide public services.
In the decades prior to the pandemic, the UK had come increasingly to rely on private providers to deliver many public services. Originally motivated by a belief that putting public services out to tender would generate competition and therefore improve efficiency and value for money, the evidence in practice has been mixed, with many questioning whether the profit motive leads corners to be cut and service quality to deteriorate.
As the use of outsourcing has increased, the capacity of the public sector to deliver services ‘in house’ has declined, often leaving authorities with little option but to look to private providers. But so far from increasing competition, a very large proportion of major government contracts go to a very small number of firms which specialise in winning such contracts.
This has led to growing calls for a reassessment of procurement practices and for a return to 'insourcing' (direct service provision) by public authorities.
Analysing the circumstances where insourcing of public services can improve quality, increase reliability and save money, the Institute of Government proposes guidelines for when and how public services should be brought back into government hands.
UCL professors Mariana Mazzucato and Rainer Kattel argue that an over-reliance on outsourcing in recent decades has led to a collapse in UK public sector capacity and expertise, undermining the government's to respond to shocks such as Covid-19.
The British Medical Association has published analyses of the acceleration in NHS outsourcing during Covid-19 and the windfall gains to private providers to which this has led.
Neil McInroy and Tom Lloyd-Goodwin of CLES (the Centre for Local Economic Strategies) argue that the present approach to outsourcing has failed, and that a combination of insourcing and 'social licensing' - the requirement that non-government providers of public services must meet certain minimum standards - would improve the quality of provision.
Examining financialisation and outsourcing within the care sector, IPPR argue that the growth of debt-financed private provision can lead to lower quality of service and financial instability. They propose a financial regulator. Common Wealth has proposed an industrial strategy for the care sector.
One of the reasons that gig workers have few rights is that it is very difficult to organise and bargain collectively when workers are dispersed and have a fragile relationship with their contracting company. However a number of trade unions have been organising gig economy workers and in some cases winning significant improvements in working conditions and workers’ rights.
The fundamental imbalance between the power of digital work platforms and the workers who use them has led some to call for ‘platform cooperatives’, in which the platforms would be owned by the workers themselves.
The TUC and Cooperatives UK have explored the challenges of trade union organising among precarious workers and how precarious workers’ bargaining power can be strengthened.
IPPR has proposed that gig workers should be auto-enrolled into trade unions (with an ‘opt-out’ provision mirroring auto-enrolment into pensions).
The New Economics Foundation argues for the formation of platform cooperatives, owned by the workers using them, which would fundamentally change the current power imbalance between platform operators and workers.
Wired magazine surveys the growing global movement of gig economy workers organising to improve their working conditions.
As the UK embarks on agreeing new trade agreements, there are increasing calls for such deals to be designed around clear principles of public interest, not simply on increasing the volume of trade as an end in itself. Many for example argue that trade deals should be used to protect and enhance labour and environmental standards, rather than to reduce them.
With the final Brexit deal rushed through Parliament at the last minute, there have been calls for MPs to have a much stronger scrutiny role in future, and for trade unions to be involved in agreement design where labour standards are at stake. More widely there are calls for the World Trade Organisation to be reformed to focus on major global challenges and greater accountability.
The Trade Justice Movement has drawn up model UK-EU trade and regulation agreements. These prioritise social and environmental goals and protect public services, thus preserving jobs and trade flows while retaining national flexibility for the UK to make its own rules.
A University of Warwick study recommends that the UK’s post-Brexit deals should aim to ‘protect, promote and empower’ workers, given them a proper voice in shaping deals which will affect them.
Simon Evenett and Richard Baldwin propose reforming the World Trade Organisation to give it a common purpose for what it hopes to achieve through trade, actively pursuing policies that respond to global problems like vaccine availability and climate change.
