 Rwy'n credu ar y panel yw'r ffordd. Rwy'n credu'n gweithio ar y dyfodol y brifysgol yng Nghymru ac ymddwch, ac rwy'n credu'n gweithio ar y dda y cwmddiadau. Rwy'n credu'n gweithio ar gyfer baronyn, a'r ysgolwch yn ysgolwch, rwy'n credu'r ysgolwch, ac mae'r cofeyddau yn cael ei gwybod, ac mae'r ysgolwch yn cael ei gwybod. Rwy'n credu'r ysgolwch, rwy'n credu'r ysgolwch, a yn unrhyw ymlaen i'r gorffordd Wrthwych drwyffyrdd Roedd Cymru. If you don't follow their work, you absolutely should be, they're a great institution. Lord Dair Turnit is an economist and business leader in brackets, along with many, many other things up to come there. And Greg Thrate is the research director of the resolution foundation and one of the authors of today's report. Let's get going. Let's go. I'm the research director of the research office at the R.F. The aim of this short presentation is to explain what we mean by stagnation and why we think the UK is at serious risk of it. Ond, rydyn ni'n rwy'n gweldio, a gweithio i'r Unigfair, y Chwyddoedd OECD cyhoeddiadol. Y Unigfair yn sicr iddyn nhw o'r OECD clwb o'r Gwyddoedd Cymru. Mae'r rhan fydd yw'n cyffredinol wedi gwneud o'r meddwl ar gyfer y gweithio, a'r ei wneud o'r 70, 5 o'r OECD. Ond, rydyn ni'n gweld y Lleidau Lleidau i gael ei gael. y bwrdd yng Nghymru Gweithbeth Lleidwyr Maen Lleidwyr. Mae hyn yn ôl o'r bwysig, ond a llunio â'r boblwn yn pinebit. Dwi'n gweithio'r awdurdid yn gweithio. Byddai ffordd hyn o'r gweithio. Mae hyn o'r gyffredin ni'di ymlaen. Mae gynaeth gyda gynaf, hon. Mae o'r gwaith, erbyn unig, os yna au'r ffynffordd phoblau i'r holl o ni. Rydym yn Y Cymysgol yma yn y periad yn y deallu gyda'r cyffredinol. Gweithio yno? Mae'r rei o'r llart yn ddiddordeb yma yn cael ei gwybod, ac mae'r eu cyfrifiadau cyfrifiadau yn y Cymysgol, ond rwy'n meddwl cyfrifiadau a'r holl yn gyddiolol yn ei ddiolion, ac mae'n gwneud ffordd yn cyfrifiadau o'r byddau i geirio ac oed. Sio'r cyfrifiadau fydd yn y Cymysgol yn y gweithio i gyd, a'r ddweud yma'r gweithio a'r holl yn gweithio i holl ..a wnaeth dweud y gafio arwad yn 90, 90, a 20 oes. Ond wefawr i gyd yn dweud gyrch y ddechrau yn y ffordd yn y 50 oed. Y dyfodol a gyfod am y bydd y cyfrifol ffiannidol a'r hanes... ..y'r Prifysgol Llyfrgell yng Nghymru erioed yn y rhaid o'r OECD. Mae yna'r ysgrifennu. Mae yna'r ysgrifennu ffiannidol. Yn ymgyrchu, y mae'r ysgrifennu gweld â'r YGDP yn y tblon. mae rhai sigud ymwneud wrth gyfer rherau cymaint cyntafol gwahol yn rhaid i'r gwerthu GDP ar hyn. Ac mae roedd cerddewo am fewn hyn, gallwn gweld cymaint cyngor yma wedi un 14 yma, mae mae eich cerddewo arall yn rhoi rhofdi'r gwerthu gwath yma, ac mae mae rhoi'r rhofdi'r gwrthu yn rhoi flach yn ymwythgyrch. Mae'r grwmp felly dyma am eu gwirio yn rhaid i'r ymwneud yw hwn yn y peth 15 yma, a mae'r gwrth sy'n yn ymwythbeth ar y dymrwythiaeth aeth y 1930. Felly, fel y cyd-P Low amendment diwethys, Llywodraeth Gd, Cydllin 17 yn rhan o gweithio Group Gwyrddol Cydllin. Mae cyllid gennym i ddechrau'r newid gwybodaeth eich newid gyllid gyda Llywodraeth Gwyrddol Cydllin 17 yn rhan o gweithio. Mae'r c kattynydd fannu gweithio gweithio gwybodaeth eich cyllid gyda Llywodraeth Gwyrddol Cydllin 17 yn y gweithio'r newid gyllid gwybodaeth. makeup it's different where i ath i camellio as hefyd ddim yn y cwyrddol, ac ar y cerddol yn gweld soedd Cymru yn 1980 wedi bod yn ymgyngwledig yn ymgynghwil, credu y cyd-dysig mae'r cyd-dysig yn ymgynghwildau cyd-dysig yn y cyd-dysig rwylo hi yn ymgynghwild. Ond rhai cyd-dysig yn cyd-dysig yn yhu'r cyd-dysig yn ymgynghwild aheaddol yn y 80 th, rwyf yn unig o'r tyn nhw'n cyfrwyng-nutydd yma ymgynghyd yn yw cyfwynghwild. Ond roedd y mynd i'r cyfrwynghwild. a gwneud o unig ac yn ei wneud ochrydau a'r Ysgol Fath bob leol. The UK has the highest genie coefficient of any major European economy, inequality rocketed in the 1980s and since then remained broadly flat depending on the measure used, so I've shown you that following many years of weak growth the UK we've got unexceptional levels of productivity and hence GDP per capita along with high levels of inequality, this chart shows the amount of GDP per job in different areas of the UK Rwy'n cael fynd i'r gweithio'r gyflawn o'r ysgolion arlawn a'i'r holl arfer o'r gweithio'r cyflawn. Mae'r problemau gyda'r UK yw'r holl ymlaen o'r ystod i'r tyrd i'r gweldu'r gyda'r cyflogau. Dwi'n cael ei ffordd o'r ysgolion ddiddordeb yn ymweld, y ddweud i'r gweithio'r gweithio'r cyflogau, yn y gweithio'r gweithio'r gweithio. Byddwch chi'n gweld hwn o'r un fydd y rai'n dweud o'r holl bwysig er mwynthu hwnnw i'r reihewn. Rhyw hwn ar ôl hwnnw o'r gwaith ar gyfer ynchwyn, ac yn rhoi'r amgylch yn rwyf yn cyfrannu'r holl yn y quwdidd. Rhyw hwnny'r ar blwyd i deilio Llywodraeth ym Mhwyloedd Gwyrdd Wrth Posrwymiad, oherwydd yn bwyd yn brif Republicoedd â'r rhwy 많이 ar gyfer y gwrthau honno. Mae'r eich llwyth o'r gwoith rhai yn Gwyrdd, symud cwylfa a gychwynwch i Llywodraeth, i Llywyodraeth a'r roedd eu cyd-distrwbwyd.adydych chi'n meddwl a'r Hysboedd ystod hwnnw fel y cyd-dysgu hwnnw sy'n meddwl yn hwn y cyd-dysgwyd threatenon yn cael ieithed, ac yn meddwl ar math hwnnw, yn llyu rhan o'r cyd-dysgu hwnnw yn cael ei fam yn fengyrch i chi'w cyd-dysgu hwnnw, i Wasanaol I yw mynd yn eu cyd-dysgu hwnnw. Is also the case by the way and very importantly that UK's lower incomes are concentrated in certain demographic groups, such as single parents, some ethnic minorities and people with disabilities. So I've shown you that we've got high inequality, unexceptional and average incomes leaving many households with low incomes especially poorer ones. Incomes have not grown meaningfully for 15 years now. Finally let's think about what this protracted period of slow growth has meant for taxation, gyda chi, mae'r ffinancau cyfloghwytaeth a'w cyfloghwytaeth cyfloghwytaeth. Mae'n rydw i'ch gweithio'r listau cyfloghwytaeth, a chydweithiau bod hefyd yn cyfloghwytaeth ar 1114. Mae'n rhan ffordd i'r gweithio'r credu yng Nghyrfaen a'r pandemig yn ystod. Rydych chi'n meddwl, y taxaidd, y taxaiddau yn grwp y llwydd yng Nghyrgrifeid, a'r cyfloghwytaeth yn cael ei ddefnyddio'r termio cymaint. those developments are another consequence of the UK's stagnation. Slow growth means lower GDP in the long run and higher taxes to fund a given amount of public services. However big the demographic pressures on public spending are set to be comet, they'll be harder to bear if the economy is growing slowly. So let me summarise where we got to... The UK's stagnation, with 15 years of low growth leaving us a long way behind the income frontier, Ie wnaeth i'r lefےau o bwysig yn ymddangos fel ychydigiaeth, ac wedi'u'r credu'r gwah ddechrau ar y glws yn y bwysig ar hyn. Mae cyfnod â ffwrdd ac yn unigolwledig yn y dyfodol yn cyfbryd. Felly, llewledig yn ymlaen i beth. Rwy'n rhaid i'r gyfer Bethesaf y Gaddach, i'r Drosedd Genedlaeth Ysbryd o'r 90s ac i'r Ysbryd, felly yr hyn wedi goingfyrdd. Roedd ei ddwy'r zeithaf yn ymddangos. oedd y gallwn amdano ychydig oherwydd. Ysgrifennu Osach haith yn ymweliadau yng nghymru, ar y 90-rhyw sy'n gweithio'r gweithio, a'r gwybod ychydig o'r bwrdd yn ymddeithasol a'r ymdweith o'r gweithio ar rygwyd. Rydym yn ei wneud o gwnaeth ffynol ac ydy'r gweithio'n rwyf ymdweithiaeth arall, sy'n ddwy'r cyfleddau a'r cyfleddau, fel ymdweithio ar gyfer y cyfleddau, The very democratic fabric of the country can be damaged. If the prospect of providing material conditions that are better for our compatriots were not reason enough to do better Then the need to repair and support our democratic fabric should be. Thank you very much. I'm surely lots of those individual parts Newtwo you probably noticed wasnt growing, all living in a society with high inequality I guess the thing we take away from doing this project so far is that the interaction of those two and the length of time that they have gone on for say we need to step back and think where has that left us? And I think our conclusion unsw writing that is worse than the end and we should not just think about one more year of slow growth or one more year of high inequality, it is the cumulative effect of those and the interaction of those that is so dangerous. Now, Menush, you have been overseeing this project over to you. Okay, thank you Torsten. I wanted to just make three points. First, the low growth story is dead serious. It used to be conventional wisdom that if China grew less than 5% a year, the Communist Party's hold on power would collapse. And I think it also equally applies to democratic countries that if you can't deliver higher living standards on a consistent basis, your politics gets very, very risky. It made me think my German mother-in-law who is a World War II survivor used to always say, everything is better with butter. And I think it's like that with growth. Everything is better with growth. When I was at the IMF and we used to look at debt sustainability and macro projections, 0.1% increase in growth makes everything better. The fiscal position, your ability to spend on public services, your debt sustainability, your ability to invest in things like well-being. And we've been giving away 0.1% of growth, 0.2% of growth here and there through a series of policy choices that we've made over the last 10 to 15 years. And before you know it, you're poor. And I think we've been taking some of the growth agenda for granted. And of course, for living standards, productivity is the holy grail. And we spent a lot of time on the productivity puzzle in the UK. Anyone who's worked on the UK economy has spent the last decade. And when I was at the Bank of England, we had like seven running explanations as to what was driving the productivity puzzle. And I think with the work of the inquiry shows that it's actually pretty simple. Our investment is too low. Our public investment is too low and our private investment is too low. And everything else is out on explanations. But that is the fundamental driver of why productivity is so low. And reducing taxes is not going to deliver more growth. What? We've got a problem. There isn't a lot of support for the Laffa Curve in the economic literature. But higher investment will deliver more growth. So that would be my first point, that the growth in investment story is dead serious. My second point would be about services economies, which we are. Services economies are in the end about people. There isn't that much physical capital involved in a service economy. Of course you need digital and you need infrastructure and broadband and all that stuff. And you need to get people to their workplaces, although not so much anymore. But a service economy is in the end about human capital. We're moving into a world in which everyone will need tertiary education. But if you've only got a secondary school education, you will not have a good life. And we are not preparing ourselves for that world. And I don't mean everyone needs to go to university. I mean everyone needs to have tertiary education, which includes further education or some sort of training that goes beyond secondary in order to have a decent standard of living. I think the fact that the government is considering a lifelong learning entitlement is a good step in that direction to level the playing field to enable people to continue to learn beyond secondary school. I just hope that it's a serious proposition, that its scale is large, that the interest rate reflects that this is an investment in human capital and not a business proposition and that with a rate of return on average between 10 and 20%, I think that's a really good investment for the Treasury to make. I think there are other aspects of enabling human capital to be deployed more efficiently. I'm a big fan of flex security where you have highly flexible labour markets but you support people to transition by having very high replacement rates on unemployment insurance and much more serious investment in skills and training. A country like Denmark invests 10 times more than we do on active labour market policies. We're not even in the right all-park in terms of skills training. But if we're going to be a services economy, we need to fundamentally rethink the way we approach human capital, including things like greater tax credits for firms to train their workers and to get the apprenticeship level to work, for example. My third point is on what's our new social contract for the UK. I would say this would not have you in the book on this topic, but we kind of did the Washington consensus and market fundamentalism and liberalisation in the Thatcher period. We then did the third way where the model was basically, let's have high growth and redistribute and that collapsed after the financial crisis. We haven't really got a new model. For me, I think the right model is one which has a bigger social contract where we invest more in each other and ask more of each other. By invest more in each other, I mean much more serious attention to things like early years education, lifelong learning and skills, higher public investment in infrastructure, but also ask more of each other. By that, I mean asking people to work longer, asking people to pay tax and closing some of the egregious loopholes in our tax system, looking at things like property taxes, where two-thirds of global wealth is held in property and yet that's grossly under tax. I'm sure Adair will talk about a carbon tax, so I'm going to leave that space for him. And things like supporting people to be able to contribute more. We have the highest childcare costs in Europe. Many women are not able to work because childcare costs make it prohibitive. We have more women going to university than men in the UK. If we could get those women in the labour market by supporting childcare more sensibly, we could again increase productivity. For me, I think we need to think about changing the structure of both security and opportunity in our economy to ask more of people and to invest more in them to move to a higher productivity, higher growth and happier economy. Thank you very much. I want to make happy people. Are you going to make us happy or are you going to bring us down? Well, a few comments on the analysis on what, if anything, we know about what it's going to look like going forward and what matters, and then a few points on obvious policies and obvious not policies. I found this an incredibly fascinating report to read. It really does make you feel how badly the UK has done over the last 14 or 15 years. The thing I would add to that is how badly the UK has done despite what ought to be an enormous structural advantage of the English language. In a world where there is a service economy, there is a creative economy and artistic economy, we're sitting with a huge advantage versus other people and yet we're falling behind. The second thing that struck me is this crucial insight of the interface between the combination of average earnings relativity and inequality. When people in the top 10% of the UK income distribution go on business or on holiday to France or Germany, they don't feel poor relative to their counterparts in those other countries because they're not poor. They can afford roughly the same restaurants, hotels, their houses look the same, etc. But as this shows clearly, when you go to the middle income and lower income levels, it's much lower, very significantly behind. Though that does pose a political problem in a sense of the reaction to that because those lower income groups typically go once a year to the continent, often on holidays which are essentially in an enclave environment, and they may not realise how much poorer they are than the average person at the same income distribution. And that may have a political implication for just are people not as worked up about this as they should be. The third I was very interested by the thing on page 36 which shows the very different performance on productivity versus jobs and hours worked. Now it depends whether you think multiplying hours work is a good thing, I mean broadly speaking, and it's the flip side of productivity. And that brings me to my first of three points about understanding what is going on here and how things look going forward. I would start with the proposition that we have to realise that flexible labour markets, for which we have been so proud in the UK, which were created by Thatcher and which were continued broadly speaking by Blair and Brown, they are double edged swords. It says clearly in this that the reason why France has a higher rate of productivity than the UK is it has higher investment. Now anybody who knows French business leaders knows one of the reasons why they have a higher level of investment which is that they've got an inflexible labour market. They can't easily get rid of labour once they've employed it, so they automate, automate, automate to not have to employ it in the first place. Flexible labour markets tend to create productivity. There is a trade-off and we've got to debate that trade-off and I think we went too far down the direction of hyper flexible labour markets. Secondly, where are we on Brexit? There's an interesting analysis in here which starts with a sort of counterintuitive that our relative exports to Europe, relative to everywhere else in the world, don't seem to have gone down and you might think they, or they've not gone down as much as you might think. But what it actually says is that the openness of our whole economy has degraded and it suggests a set of model forecasts that suggest that that will go on dramatically in the next six years and that by 2030 we could have 24% less exports than we would have had if we hadn't had Brexit. And if that is true, and I think we've really got to, you know, got to be careful of model results, but it does reflect the intuition that when you leave a customs union, and it's just, I think, the customs union which is vital here, not the single market, when you leave a customs union which allows you to create deep supply chain linkages with the area in the world right next to you, and in a world where intra-regional trade across the world is far more intensive than trade from one end of the world to another. When you do that, you can undermine your competitiveness or your openness not only in relation to that regional trading block, but also in relation to the world, which basically says the whole idea that by getting out of Europe or Britain is fundamentally flawed. Now what are we going to do about that? Logically Britain having voted for Brexit should have stayed in the customs union. It was damn close. The indicative vote in March 2019 almost in Parliament produced a majority for staying in the customs union. Logically we should go back into the customs union and there is not the slightest chance that we're going to. And we have to just live with, you know, how do we think about that? That is right. And we're not going to take the most fundamental policy that might help reverse it. We're going to have to think carefully about what else flows for it. Finally on the analysis, I think the analysis on climate change here is absolutely right. It's very important not to overstate the impact on climate change, particularly on employment structures. When we get to a zero carbon economy, broadly speaking, many, many people will be doing exactly what they would have been doing with workers and lawyers, waiters and bankers, nurses and doctors, police women and police men, people working in the creative arts. Broadly speaking they will do exactly what they are at the moment but the electricity that they use in order to do that will come from green sources and the cost of that electricity as much as makes no difference will be broadly speaking the same as it is today. This is not a massive change in occupational structure. The climate change committees reports which the report refers to suggest that at the core of the occupational effect there are two significant ones and everything else is trivial. We'll probably have about 200,000 less jobs in the maintenance and repair of vehicles. Essentially because electric vehicles are much simpler and don't tend to break down. So there's a whole load of jobs going to go there roughly spread across the country and we need about 200,000 more jobs in the plumbers and the electricians and the small construction trades to insulate our houses better and to put in heat pumps. Apart from that the employment effects are actually quite trivial and that 200,000 plus, 200,000 negative is very small compared with and by the way not regionally concentrated either in the destruction or the new jobs is very small and less regionally concentrated than the big regionally concentrated deindustrialisation of the early 1980s let alone the previous 100 years of the massive movement of people from the countryside, from farm to factory. So I think it's absolutely right in that we have to get the climate change transition right but we must make sure that we don't overstate how transformational it is on our economy. Finally what do we do in answer? Well I'm still thinking about that but I think some things are obvious and some things are obvious because they're good for society even if we're not absolutely convinced that they will drive a productivity growth though they will probably drive productivity growth as well. We need to make sure we nourish a internationally traded sector and that has to be a lot to do with science and creative arts etc etc and maybe a small number of people will work in that but high value added, high paid internationally traded jobs are important. We need also to make sure that we drive productivity in non-traded sectors of the economy for instance in all of that stuff that we have to do to insulate our houses better and I think a lot of that has about training and skills we just don't have enough of these plumbers and electricians to either create those jobs which would be a good thing or to deal with a climate transition. We should address some issues both of inequality and of dignity. Look we should pay people in care homes more. Right straightforward we are at the moment paying people doing a vitally important and wonderful job we've used contracting out to drive their conditions and pay to the absolute limit and we should stop doing that we're probably going to have to pay more tax and the one thing I think is missing this report is taking head on the tax issue. We are now in the middle as we know of the most absurd three day tax cut auction that you could imagine. What I would like to see is an analysis of where is our tax rate and our public spend as a percentage of GDP versus those countries where we are behind. I know the answer with France France has a much higher tax rate I would say actually too high but we could be quite a lot up and we'd still be way below where they are. Germany has somewhat higher rate the Scandinavians all have higher if we're basically saying all these other countries are doing better I think we actually have to take head on the debate that not only should we be rejecting this absurd auction about tax cuts at the moment but maybe a somewhat higher not much higher but somewhat higher rate of tax is essential for an optimal response to the challenges that we face. Great thank you very much today. The bad news is you have not got the 30 votes required to proceed to the next round but let's throw it off in life. You also get lots of points for giving people specific pages to read don't read them during this you've totally failed on any discipline of the division of these sessions over the course of today so no more climate change chat until the next session otherwise the people on that panel will kill us. Now Mari over to you. Thanks very much. I was stuck when I was reading particularly this chapter the sort of frustrations for me that's shown through about the misunderstanding of the nature of the UK economy and how that pervades into economic policy thinking such as it is and strategy much of our work at the institute focuses on deepening the understanding of the actual nature of the UK economy and the different regions and nations within the UK working with UK government devolved governments and local government to just telling them the actual nature of the economies that they are responsible for can be almost too powerful because they just don't understand the nature of the economy and how much of it relies on national sectors for example and that really matters for the capacity of our economy to deal with the skills that we require for the future and also injects a bit of realism into the fact that not every area of the country can be a hub for the more kind of sexy sectors of the economy on Vintec or life sciences or whatever it is and there is this sort of economic policy obsession that's talked about in the analysis around the UK being like other countries that it is not like and it will never be like and it's more important to focus on the strengths that we have so that might be Germany or actually more often Scotland that tends to be Nordic countries you want all of these benefits without some of the costs particularly when we're talking about Scandinavian countries that tends to be higher taxes but I wouldn't expect me as an economic statistician to talk a bit about the data and evidence that you've gathered and some of the limitations that there still is in understanding particularly regional differences within the UK understanding is improved by the analysis that you have done but it can go further and one of the things you talk about is obviously business investment and the UK's poor performance in business investment there are no data on how that is spread across the UK Scottish Government producing estimate for Scotland is that there is significantly lower levels of business investment in Scotland even compared to the poor level of UK so there is also there also has to be I think investment in data so that we understand better how things vary across the UK and why that might be this has been highlighted by the recent levelling up agenda and the attempts to identify different areas of the UK to invest in by the UK Government we don't have consistent indices of things like deprivation across the UK to be able to actually do that on a systematic and evidence-based basis and I think that's a huge problem and I know it's one that O&S are dealing with and trying to make progress on but I think the data deficiencies we have in the UK for a really deep understanding of both the levels of regional inequality and also the causes for it is something that needs to be addressed I would say that as a statistician but I think it's a really important area to pursue I was struck as well that many of the areas that are highlighted in the report in terms of you know both as identifying the problem and potentially the solution such as the development of human capital issues around housing which seem to be key to the gaps and wealth that have accumulated and the sort of outlook on the prospects for young people in particular are kind of out of the realm of traditional economic policy and when we talk about education or the treatment of health outcomes which are very different for different parts of the UK or different households you know these do tend to be out with the areas of traditional economic strategy and that brings me to another thing which I think is important to consider about the policy solutions and that many of these responsibilities sit with different layers of government in the UK now devolution in the UK is an interesting natural experiment and devolution has been done differently even in the developed nations and now we have a patchwork of different devolution settlements for different parts of England so part of the solution here is going to have to be different levels of government working together towards common goals and I realise that there are several realities in that which make it difficult particularly in Scotland right now and there are quite different approaches in different parts of the UK for some social policy issues that are touched on such as social care which do provide interesting natural experiments but also might make it difficult to deal with these issues on a kind of strategic basis across the UK and this relates to some of the policy solutions that the UK government have been proposing around levelling up and mentioned in the report as well the sort of piecemeal approach to challenge funds for local authorities to bid into is in no way a strategic approach to levelling up or dealing with the structural inequalities we have in the UK and it has no bearing at all on the evidence of what actually works to reduce inequalities and that comes back to evidence-based policy approaches some of the things that have been done to help young people in theory to get on the housing ladder and to buy their first home are simply approaches which lead to prices going up further and compounding the problem even though all of the evidence would tell us that's what would happen and people say that's what would happen and I'm sure civil servants say that's what will happen these are still the policy approaches that are pursued because there seem to be popular another area which maybe explored more perhaps in the final report I think is inactivity in the UK and the way it varies across the UK and why in a very tight labour market that's really the question we should be asking not more hours I don't think for anyone but how can we get people who are dislocated from the labour market who wish to join it to engage in it great thank you very much right now we've got about 20 minutes to discuss those rather big questions let's break this down raise your hand in the room let's try and take this in some kind of order so we've got low growth we've got high inequality and we've got a combination of the two broadly so let's try and take those so why don't we start with a headline question on low growth I'm not sure if you want to take this one which is a given across this discussion that hasn't been the always the fashionable view everywhere in British policy debates over recent years either because the degrowth argument sometimes driven by environmental or green concerns or equity concerns or I remember doing an interview with John Green with the other day who said it might be a good idea to trade and he said we've overdone that it's more important to produce stuff here was the gist of the question now it's on the left and the right do you have versions of it or the other version on the left is sometimes even if you get growth it doesn't make a difference to ordinary households so we shouldn't focus on it as much broadly what do you reckon yeah I think thinking that growth is not necessary is deeply misguided and I've got some colleagues from the LSE here I think Richard Laird would argue that growth helps investments in well-being it's not a trade-off between growth and well-being growth is not everything and you need to look at a broad set of indicators to design economic policies including measures of well-being but growth is part of the story and I think my colleague Nick Stern would also argue that for the green agenda you need investment and growth to transform the economy to do the kinds of things that Adair have been talking about so I think the idea that we can be a low growth green and happy economy is just not realistic I think the chart that Greg put up on the NHS waiting list that's what low growth gives you low quality public services and an inability to respond to people's demand so I I guess I would reject that I thought that might be where you were going to be there's two charts actually Greg showed one of them in the report but I do think one thing that's really important I think everyone kind of gets this but the reason wages haven't grown is because our economy hasn't grown it's not that wage inequality has gone up and the rich have scaffolded all in the last decade it's because the economy hasn't grown and that fundamental thing is and unless you think low wages are a good idea which I think to think anyone then you need some of this great stuff then Adair for you, the other one which is high inequality so high by European standards obviously not high by American standards I think Bulgaria is still ahead of us so well done Bulgaria again have you went back 20 years people would have said yes we are about as high we haven't got more unequal over those 20 years in big picture terms really the top 1% has done better but for most of society it hasn't changed that much and our relative position versus other countries isn't way worse than it was 20 years ago but 20 years ago people would have said yeah yeah we're high inequality but that doesn't matter too much so why have you all become a bunch of hippies why have you all become a bunch of hippies when 20 years ago people were like yeah yeah but you know that's not the most important thing you can ignore the pejorative bit I think you can't start with a point of view that any level of inequality is bad I can't imagine any human society which won't have a significant amount of inequality but I think you have to look at the impact of inequality of income and wealth on equality of opportunity and you also have to just have some sense that there is a level of inequality which is too much I mean we're at the sort of complicated area here about our meritocracy is good or our meritocracy is bad for the reasons that Michael Young described etc etc but I certainly believe that the level of inequality which we see is in some sense corrosive to our social glue up until 20 years ago I was most worried about the divergence between the bottom end of the distribution and the middle and the good news is that the minimum wage did make a significant difference to that and I was the second chair of the Lopez commission and in 2003 we deliberately put it on to four years where we increased the minimum wage faster than the growth of average earnings by a significant amount as a deliberate decision that we had to start driving it up and I think that has been a success of public intervention and you can see that in the figures that the relationship between the bottom desile and the medium begins to stabilize or improve a bit from that and I think where we are now at that bottom to middle level is we need to focus on the very specific things that make people poor and I think ultimately it is housing and transport to work and a set of things like that and disability and various other things that make people poor and we need interventions that address those challenges rather than focusing simply on the monetary income where we have made a significant intervention. I think at the top end there is, you know, one of the people people say well you know who cares where the Bill Gates is rich you know and there's all that evidence that show that when people worry about inequality they worry about somebody whom they can see and relate to who is not far away in the income distribution so there's a thesis that that doesn't matter but I think it does and I think it does matter particularly because of the massive increase in the inequality of wealth that it is driven by the accumulated effect and the impact that that is having on the potential for physical mobility I mean the fact that it is pretty much impossible for somebody who is brought up in a middle income family outside central London and who is not going to at some stage in their life either get parental help or to inherit a central London property to aspire to own a central London property and that is completely different from 30 years ago. They can aspire to it, they just have to marry someone very targeted. They have to marry someone very targeted. Or not marry, either is fine. I do think it is concerning and I think we should worry about it. Here's another good answer I can't remember if this chart made it into the report but we won't show it to you today but can public concern about inequality in the democracy? One of the reasons why politicians started talking about it is because public concern about inequality in poverty has gone up. It doesn't go up when inequality goes up in the 1980s. It goes up when growth stops just before the financial crisis. I think the public are basically right which is the combination of the two is what is so, they are both undesirable in their own ways but I think our argument in the report is you should focus more on how the two interact in a quality crisis kicking off this year. Low growth plus high inequality means our poor are much poorer than their equivalents in other countries. We talked about the combination of the two how it affects lower income households. One of the other things that we touched on and there's a question here from Matt which I'm going to hopefully manage to make the IT work and bring up, here we go, hopefully it should come from the screen in front of you but oh my god the IT does work. Look there's not a quality crisis, it's surging. So basically it's bad for lower income households high inequality and low growth. It's also very bad for the young is basically so Matt's focusing on the wealth aspect of that here. We in the report also focus on whose labour market prospects are most damaged by low growth. What do you reckon? Yeah absolutely well building about what Adair talked about as well I mean as well as this low wage growth that we've seen or no wage growth that we've seen since the financial crisis there's obviously also been a real restriction on social security help for working aged households which has kind of compounded the problem and we see in work poverty increasing which in turn leads to child poverty increasing and then you know the young people then entering the labour market with fewer life chances because of that as well but yes we do need to talk more about intergenerational wealth transfer that's the really striking increase in inequality that you highlight in the report this these massive amounts of housing wealth that are concentrated in older people who were able to buy houses you know maybe through right to buy but certainly you know many years ago and the prospects for young people to do that are diminished unless they then get this transferred through generations and so we need to at some point grasp the nettle of these issues around the wealth being hoarded in older people which means that young people today have less chance then than their parents of owning their own home in the future so this absolutely has to be dealt with and it has to go hand in hand I suppose of thinking about how we pay for caring for older people Are you about to break the rules of the third session people Right there may not be disciplined in leadership lectures but there's going to be in this room Right I think a question in the room here A lot of what you're just being talked about there is to do with the planning system and the way that policy has inadvertently or maybe deliberately put money in the pockets of homeowners in the Great Southeast by not increasing the supply of houses I've benefited from that that's partly because I targeted my marriage decisions which allowed me to do that I told you love matches overrated Indeed So we've identified I think the policy problem is identifiable but the issue is about how the politics interact with that so clearly in fairness to the conservators it seems that it's part of the conservators that have tried to change it and unsurprisingly another part of the conservators has pushed back on that but then you see the activity of the Lib Dems as well which have jumped on the growth element around places where housing is a particular problem where policy is really cutting in and then we sort of get in this position where we seem to fold back to something about the planning system so politically how do we get round that So you have been very bad not in your marriage because houses last even if love doesn't but because David is going to be addressing this in his politics session shortly but there is a fail Manush, why is politics not reforming planning because old people vote more than young people I mean that's the honest answer right but so I think part of this is about voting reform why don't we have online voting and digital voting to encourage young people to exercise their political power well you got a clap only one but there was a clap your co-chair clap you get zero points for that David has written more about this and has thought a lot about but I think voting reform is part of the solution I think also you know I think you have to offer older generations a deal which involves higher property taxation to deal with some of those inequalities in exchange for a better system of social care and a sense of a package you know sometimes making the problem bigger makes it easier to solve because you can trade things off and so I guess that's what I'd say as well Very good, right there's one for you Greg here which is just on this big picture which you can just climb up on the screens hopefully which is basically saying look yes growth is slow it's slow everywhere get over it and one argument that's been made about why it's slow is that Robert Gordon's book about where Robert should technology basically and nothing's as useful as the toilet it's a long book it's a long book but it basically collapses into that as like a core argument so Greg should we just get over it well toilets are very useful I'm not going to disagree with that but what Robert Gordon says is it was like electrification indoor plumbing, the passenger jet, the telephone and these were all kind of invented between 1870 and 1970 and then we're done right and then there's nothing that's going to come along that's going to be as big as that now I can't peer into the future I see lots of very promising sometimes quite disturbing predictions about what artificial intelligence is going to do and how it's going to touch parts of the economy that maybe haven't been touched by automation before but wherever the frontier is going to go the gap between us and the frontier has opened up and it's unacceptably large and it doesn't need to be this big the United Kingdom was once the frontier and while we might not aspire to be like that again we were certainly comparable to France and Germany if not within my lifetime within my parents lifetime and I think we can be again at the United States principally the United States is the frontier we are not and I think we can get closer do some catch up guys let's bring up a first poll strong incentives we believe in incentives and markets here here's the poll question so which of these there you go you earn your loud one which one matters most the low growth the inequality between people no one's doing any investment or is the problem that taxes are going up and that is squashing human inspiration and freedom which one do you want we'll go quickly across the panel I don't want a reason why it's complicated and you want free big economic gaps between places places, economic geography I'm actually going for the same one that's a bit boring I would go for low productivity because that would help you solve all the others and indeed, Greg and I'm going to go for high inequality between people you've got some different views there you're all coming in I'll give you the results Chris Wakeley I run Greg that AI and data science business that you're probably talking about I was just interested to bring the conversation back to where do you think growth is going to come from and I was quite struck as I walked in the room unfortunately a little bit late that there wouldn't be that much disruption because there would be carers and waiters and various other things which of course I agree but I think we're heading into quite a different paradigm both around consumption and what we shouldn't consume and other about the provision of services and dare I say the role of machines going forward so I'd be interested in your view as to where growth is coming from in the future very good, Adele can you take that and then you can maybe link that back to the whole Robert Gordon are we going to get any growth question it does link to that I just don't know the answers any longer which for those who know me is a very odd position very bad marketing because they're not here for you to tell them you don't know the answer I think there is something in the Robert Gordon argument or there may be there is nothing inherent about the nature of productivity growth that the same amount of productivity growth in each generation has the same capacity to increase human welfare I think it is quite possible that there were these fundamental breakthroughs of washing machines and dishwashers and hoovers which freed women from endless domestic work there were the ability to first time in your life fly on a holiday and I think you can't necessarily assume that those increases in welfare that what happens is in future equally beneficial I think it is also probably the case that we are seeing both hidden productivity improvements but hidden productivity improvements which aren't necessarily all that important for human welfare Marty Feldstein who died a couple of years ago used to argue that the national income accountants had an absolutely unsolvable problem about measuring productivity that when you had a computer game which now has 10,000 times as much computing power as it did 20 years ago but costs less has productivity not gone up at all because the value added we measure in monetary terms is lower or has it gone up 10,000 times because you got a physical productivity on the other hand the question is are adolescents happier playing computer games rather than what they did 30 years ago so I think there are some I don't think we should simply leap to all that stuff about the fundamental nature of the relationship between product productivity growth human welfare that was a diversion let's just get back to growth growth growth I think that is walking away from some really quite conceptually difficult and potentially very important issues about the future development of the economy I think what you the resolution of this is that there are undoubtedly you know some forms of growth which are beneficial and I think you do have to with the gris growth not get too fixated on the macro figures but say if at the end of the day you know I am not delivering healthcare of a higher quality you know at a stable cost that is a disadvantage right if I am not able to have plumbers or can turn up and put in heat pumps at a lower price than they were able to last year that is a problem so I am you know philosophically much more worried about these issues about one how we measure growth and what is the relationship between either measured or unmeasured growth and human welfare that I think has been the tone of the debate so far but I still end up believing that there is a whole set of policy measures which we should take which will make society better and will probably also produce a higher level of measured growth so that is how I resolve those issues so I don't think we have totally told you where growth is going to come from but if you could grow your business that would help to keep it up right now to start wrapping this up let's bring up the results of the poll but then just to give you a warning everyone I want to then come to one of the consequences that gets stuck in stagnation for a long period so who have you gone with it's basically a popularity contest and Manush has won they're very good broadly the whole book if you only take one sentence away from it is low growth and high inequality are a toxic combination that's what people are broadly worried about as I say the 2% are more representative of other things being debated at the moment but the 2% is important people it's a democracy one of the arguments in the book is that societies pulling together as you argued in your book underpinned by social contracts what does that pulling together changes over time but in modern democracies that are more diverse than they once were yes it's still bonds of shared culture and history but it's also over the last at least half a century more is driven by the promise of shared prosperity is what holds societies together in modern democracies is we will do better together and both are important that the future is better than today and we're all in this together are both important parts of what holds societies together and that countries for lots of reasons have challenges to their economic model we did it to New Zealand in the 70s when we basically shut off the largest market and your exam question isn't are things difficult that happens and that there's nothing automatic about solving that but if it doesn't it causes you other long lasting problems Greg showed you one which we can show in a chart which is what happens to your tax burden, your public service quality but there are others in terms of the strength of your society and what pressure it puts on your democracy so can we just touch on that a bit about what people's views now this is not like a projection of like imminent revolution right this is just like a general in the long run it's not a good place to be but what do you think Manush democracy basically this isn't just about economics I think we've already seen some of the consequences not just in the UK but in other countries which is you get this extreme polarization of politics and people going to extreme ideas out of frustration and you know historically you also see a similar pattern and that's very dangerous if you want concrete examples if you look at what's happening to voting patterns by age if you look at what's happening to demographic divergence young and old people increasingly living in different places which overlaps with some of these productivity graphs that Greg was showing you earlier you can see how some of that would play out given it's bad at one level the growth models told us people would just catch up right so it's kind of automatic that you deal with your problems because that's what the model says versus what does Italy or America tell us about how countries deal with these kind of challenges well I think there's no certainty that you get out of an economic stagnation trap and Italy is the big concerning one here I wouldn't you know we should probably cast our eye over Italy I think there are a set of sui generous Italian you know structural factors to do with the relationship long unresolved relationship between the north and the south etc but it certainly tells us that you know the fact that you have 10 to 15 years of this stagnation doesn't mean that you're not going to get another 10 to 15 years on the democracy point I absolutely agree that one of the potential consequences of this stagnation or of income shocks can be a polarisation of a radicalisation of politics on the other hand I've got worried that we are turning that into the overall dominant exclusive theory of what is a threat to our democracy and the thing which makes me realise that we shouldn't do that is if you look at the average income level of the January 6 rioters they were not low income some of them flew in by private plane there is in the US and at the biggest threat to democracy in the world I think are the very clever republicans in the US it is a corrosion of moral standards among people who are perfectly well off I don't think that the undermining of standards of democracy in either Hungary or Poland by Urban or by the law and justice party have a fundamental economic explanation I think we have to realise that there are autonomous political developments relating to identity and culture wars which have their own dynamics so yes there is an important role and a stagnation and sudden hits can have a big impact the Gilles Jaune was clearly a sudden hit to living standards through a very badly designed sudden increase in a form of carbon tax but I think we have to be wary of turning that into a sort of exclusive theory as to what are our threats to democracy I think they are very serious in the US and I think the core of them are maybe not economic I think they are cultural and identity based stay away from country cubs people they are dangerous for you and for society we are going to stick to time today not least because you only had to get through one graduation ceremony to get in the building today over the course which is what productivity looks like so I want to say thank you very much to our panel