Ideas and Arguments for a New Economic Consensus

Torsten Bell, Chief Executive of the Resolution Foundation, is one of the UK’s most prominent public commentators on economic policy, sharing the UCL Policy Lab’s commitment to translating big economic ideas into real practical action. 

Torsten Bell is in no doubt. He knows that the big question facing the UK at present is how we will increase economic growth. He’s in good company. Both the new Prime Minister, Liz Truss, and the Leader of the Opposition, Keir Starmer, have declared that the overwhelming policy focus of the moment should be growing the economy and improving productivity. 

He still thinks, however, that the politicians have lots to learn. 

“I think there is still a general problem that the political class doesn't understand how bad it is”, he says. “I am still in conversations, when you hear people who say, yes, okay, it's been a few tough years, but we're still broadly the same kind of wealth as the Netherlands, Australia, Canada. But most of us in Britain are now far, far poorer than people in those countries. I think the public also doesn't know. But we're talking about being £10,000 per person per year: a third poorer for those in the middle of the income distribution, compared to those countries.”

Moreover, even if the growth agenda is back in mainstream politics, that doesn’t yet mean that we have heard the answers. Torsten Bell believes that this is, at least in part, due to the fact the British politicians continue to de-emphasize the things the country is actually good at – such as the service sector – while instead choosing to propound nostalgic, romantic visions of a manufacturing renaissance.

“We're quite embarrassed about being a service exporter”, he explains. “We’d probably rather be a manufacturing exporter, even though there's no plausible route to that happening. We're not going to become Germany in the next few years. That unease needs to be reconciled if you're going to make a success of what we are as a country.”

This might make us think of the contribution of the playwright, James Graham, to the last UCL Policy Lab magazine. Graham argued that what the UK is really missing right now is a new, shared story that sketches a plausible and resonant view of the future. That is a political story but, importantly, an economic one too. Does Torsten Bell agree that we need a new compelling tale that can rally workers, businesses and market investors in equal measure?

“Yes. It is about the need to be a country with an economic strategy. One that fits the moment. Because in the end, change doesn't happen because somebody in Whitehall comes up with a strategy and pulls whatever the levers they do. It happens because everybody, whether a business leader, somebody running a council or a charity, understands the country's economic strategy.

Britain is clearly not there yet, in Torsten Bell’s mind. There is no new economic strategy, no new economic consensus. But he is still hopeful. It is what keeps him researching, explaining and debating with an energy that is legendary across Westminster and Whitehall. He does it because he thinks ideas matter and because he believes debate works. 

“Generally, I'm a very optimistic person. Policy can make a big difference. History shows us that for good or ill. But there are always big improvements to be made. And there are big challenges out there, some of which are kind of shorter term, like the energy crisis, where policy can make a big difference then. And so we should have hope. And the same applies to some of the longer-term challenges.”

Climate change is one example of those longer-term challenges, of course. And perhaps that might just offer the prospect of building a new shared economic narrative, strategy and mission. One that brings together the UK’s world-leading science and innovation with its strong support for net zero. Does Bell share that view?

He is, perhaps, not yet fully convinced, but nonetheless he does think it is an example of the power of persuasion. “If you told people ten years ago that either we would have the level of public consent for action on climate change that we have today, or that we had the kind of low costs of renewable energy generation that we have today, they would have thought you were a kind of starry-eyed optimist”, he tells us. “And actually, that's where we are.”

As we finish up, I turn off the recorder and get ready to go. But Torsten Bell continues to discuss new ideas, debates and the national argument. He knows the challenges are big, perhaps bigger than ever, but that only means the solutions must be bolder and braver. And that’s what he’s in it for and you can’t help but be bowled over by the commitment. He is right that there is work to do, but he is right too that we might end up building something even better.

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