Building an economy from the ordinary hope of every place

Nick Plumb is Associate Director, Policy & Insight at Power to Change.

Britain Renewed takes place at UCL East on May 15th. 

As we consider how we can renew Britain, we must find a new way of governing. One that works in collaboration with and is built on respect for communities across the UK. This is particularly important in the case of growth. We need to develop an economy from the ordinary hope and ideas that exist in places up and down this country.

Growth has been central to our politics in recent years. This cross-party focus on growth is understandable. Inflation has increased the cost of borrowing, poverty is on the rise, and our public services are under huge strain. A bigger tax base, delivered by increased growth, is seen as the solution to these huge challenges. But too often, this big picture debate misses important questions about the nature of growth. Growth to what end? For whom?

Speaking recently, Rachel Reeves underlined the need for economic policy to be more than just a temporary statistic; it needs to be felt by ordinary people.

 "I love a graph as much as the next person, I spent the early part of my career looking at them obsessively. But in the end, what success looks like is how people feel."

As Reeves makes clear too often, there has been a disconnect between how politicians and economists see growth and how people live it. Returning to growth will depend on our ability to tap into the ideas and energy of every place.

This builds on the work of thinkers such as Nick Haneur in the US and Wendy Carlin at UCL, who have recognised that in order to sustain growth, we need a thriving working and middle class—or, as Nick puts it, we need a ‘middle-out economics’.

With trust in politics flagging and the electorate more volatile than ever, delivering growth that has a real impact on people everday lives should should be a central concern for our politics. How do we do that?

Localising our political economy

At present, our political economy is disconnected from the lives of ordinary people and their aspirations for where they live. Large multinationals might be able to identify countrywide consumer trends, but they’re unlikely to know what the needs of a community might be, let alone what people want the place they live to be like. For many, ‘the economy’ and the state it is in is experienced in their communities and neighbourhoods as much as in their pockets. Does the high street feel vibrant or run-down? Do they have the services and amenities they expect – pub, post office, park – on their doorstep? To build an economy on these ordinary hopes means building a political economy that is closer to people.

This isn’t about rejecting large-scale investment or the modern economy but about recognising, as Wendy Carlin has, that in a mature economy, sustaining local communities is good for growth and good for ordinary people.

Community business: a ready-made partner for government

Too often, when we talk about partnership between state and business we think of the national state and big business. If we want to build an economy based on ordinary hope, we need to think about partnership at the neighbourhood level. Community business is often the way this hope manifests itself in places. These are locally rooted and locally accountable businesses that trade for community benefit.

In places like Plymouth and Sunderland they are working alongside communities to turn around the fortunes of their local high street. It is a similar tale in Hastings and the Knowle West neighbourhood in Bristol. Hastings Commons is developing affordable workspace and residential property in the heart of their town centre.[NP1]  WeCanMake is innovating  to tackle the housing crisis in Knowle West and they have a developed a playbook for how this could be replicated across the country.

The common thread that links all of these examples? Economic change which people can touch and feel, and economic change which is built from the frustrations and aspirations of the communities in which they operate. Here, they understand that the GDP of the nation going in the right direction doesn’t necessarily mean positive change for the people of Plymouth, Sunderland, Hastings or Knowle West. It will only mean that if they make it so, together.

The direct impact these community businesses have – on housing, high streets and beyond – is one thing. The positive knock-on they have on local economies is another. They disproportionately employ people from the local area, particularly those furthest from the labour market. They use local supply chains. 56p in every £1 they spend is reinvested stays in the local economy. This is just 40p for large private sector firms. All of this further solidifies an approach to the economy which feels tangible for local people. Importantly, these businesses are ready and willing partners to government.

To build a new way of governing and renew Britain, we must draw from the deep well of ordinary hope that exists up and down this country. This means moving our politics and our economy closer to local people. We can start by backing and catalysing the organisations already doing this, and supporting their formation in places they don’t already exist. If we want it to feel like ‘our growth’ and not someone else’s, let’s get to work.

Nick Plumb, Power to Change