As the recent IPPR Commission on Economic Justice report points out, there are deep problems in the UK economy. Our investment rate lags behind our competitors, with nine-tenths of economic growth coming from consumption rather than investment. Productivity is fully 13 per cent below the G7 average and productivity growth has stalled since the financial crisis. We have an unsustainable trade position, exporting too little and importing too much. And on current trajectories, we won't decarbonise quickly enough to avert climate breakdown.
Our economic weaknesses translate into poor outcomes for ordinary households. Wages have stagnated for the past decade, meaning most people have seen little improvement in their living standards. The UK economy is the most regionally imbalanced in Europe, with London as the wealthiest region in western Europe while nine out of ten of the poorest regions are also found in the UK. There are huge and growing inequalities of wealth, particularly affecting younger people, who are set to be poorer than their parents.
Prosperity and Justice: A Plan for the New Economy puts forward 73 bold recommendations to fundamentally reform the UK economy to achieve ‘escape velocity’ from a model that isn’t working to one that does. Yet we know we don’t have all the answers and that continued radical thinking is required. We have therefore established the IPPR Economics Prize to encourage new and creative thinking in economics.
The IPPR Economics Prize
This year, the inaugural IPPR Economics Prize will focus on economic growth. We want to know whether the downward trend in the rate of economic growth can be reversed, and if so, how this can be done. Is it realistic, desirable and achievable for the UK economy to grow at 3 or 4 per cent in the 2020s? We want to capture the best new thinking that’s out there.
Over the past decade, UK economic growth has averaged 1.1 per cent compared to the long-run world average of 3.5 per cent. Even if the UK growth rate were to double, it would still be around 40 per cent lower than the world average. That’s why we are looking for the most radical, inventive and ambitious proposals to achieve a step-change improvement in the growth rate. More of the same simply won’t do.
Crucially, we want to understand what policies can raise the growth rate while also ensuring that faster growth translates into higher pay for ordinary households and reduced inequalities across regions and generations. And all proposals must be environmentally sustainable, accelerate decarbonisation, and ensure that the UK meets its international commitments and its responsibilities to present and future generations.
In offering what we believe to be the third biggest economics prize after Nobel and Wolfson, we hope to encourage contributions from a wide range of individuals, groups and organisations from the policymaking world and beyond, and spark a diverse debate about the best way to fix the UK’s longstanding economic weaknesses and get our growth rate up.
 Compound Annual Growth Rate (CAGR) calculated over the period 2008-2017 using ONS chained-volume GDP data.