Our analysis looks at previous periods of British economic history to identify the enabling conditions for our most successful episodes of economic growth, noting the crucial importance of large-scale improvements in welfare and human capital to their success, and the negative impacts when these policies were reversed.

In its own prescription for kick-starting growth, IPPR calls for a rebalancing of power to move the economy out of its current low wage/low productivity equilibrium. This, IPPR’s Commission on Economic Justice argues, requires a shift in power from: corporate management to employees/trade unions; short-term financial interests to long-term investors; dominant companies to entrepreneurs; Westminster to the nations and regions; and households with great wealth to those with little.

We agree wholeheartedly that such structural and institutional change, including a greater emphasis on localities, allied to significant revenue-raising tax and wealth redistribution, is essential to deliver a step change in the quantity and quality of economic growth. We argue that this must be achieved through reconceptualising the welfare system as a growth promoter. Our radical proposal provides a general, motivating mechanism to achieve this.