Good growth for every part of our country

This essay was first published in Ordinary Hope: A Mission to Rebuild (Download PDF)

The current failures of our economic system and our politics are inextricably linked. In End State, James Plunkett highlights the connection between people’s feelings about the economy and democracy “in America, 80% of the people who feel the economy isn’t working are dissatisfied with democracy”.

A 2024 OECD survey found that the UK has the second lowest trust in government of 30 countries. And this is indicative of a wider problem: people have lost trust with the whole “system” of business and politics that runs our country. The past year has compounded that with high profile stories reinforcing the sense that our current system is working at the expense of good people and the places we cherish, from the Post Office prosecution of postmasters, to the water companies’ pollution of our beaches and rivers and the Grenfell tragedy.

Consequently, there are high stakes to the Government’s growth mission. To be effective this mission has to be about more than money. It has to be about creating a system that benefits all, not just a few. If we are going to rebuild our country it cannot just be about growth, we need to be deliberate about the growth we need. The key question is: how can we create growth in a way that rebuilds trust, powers our national renewal and enables people and the places they love to thrive?

As a country, we have not historically managed the social implications of economic transitions well. In recent decades parts of our country have thrived and others have lost not just their prosperity and industry, but their heart. We need to recognise that there is a fundamental interconnection between how our economy works, the ‘rules of the game’, and the reality of people’s day to day lives.

But there is room for optimism. We are on the vanguard of the green industrial revolution. The UK has led the world in wind energy and battery storage development and through both GB Energy and the National Wealth Fund we can advance this position. However, this shift will not feel, or be, different from previous economic transitions for ordinary people, unless we are intentional about it benefiting all of us.

Over the past two and half years my organisation, Our Future, has developed a new approach to seed the benefits of the green transition in post-industrial communities and to define the type of growth we are seeking. Our trailblazer is in Grimsby, a part of the country that is a microcosm of both the failures of the past and the opportunities of the future.

The town lost its fishing industry in the 1970s and this led to economic decline and a loss of identity, community and shared direction. The subsequent decades saw little change in the economic fortunes of the town. What the American economist Dani Rodrik calls “hyper-globalization” has not worked for Grimsby. At the same time, though, geographically the region is on the forefront of the UK’s green economy. It is the gateway to the world’s largest offshore windfarm and will play a central role in the decarbonisation of the UK’s heavy industry, making up 40% of our national industrial carbon emissions. People travel across the world to visit the offshore windfarm and learn from the cutting edge technology.

Our task is to make sure that the future really works for all the people of Grimsby. And that will not happen by chance. We need to be intentional about it.

It all begins by creating a shared definition of good growth

This year we worked with Demos to run a democratic participation exercise, through Pol.is, to create a shared vision for the future of Grimsby. This was widely advertised across the town and available for anyone to participate in. 1,100 people got involved, voting over 50,000 times. Together they created a vivid picture of a thriving green town that believes in and backs its own people. People described how the town they wished to see would be “a renewable energy powerhouse” with “offshore wind and renewable energy benefits for local businesses and employs lots of local people in good jobs”. They also talked of inclusive cultures, young people having a reason to stay in the town and support for “local people to make small differences to create the ripple effect and make a massive change”.

When growth was referenced it was about what it delivers – a good quality of life and a place that is thriving. That also aligns with national voter behaviour. Prior to the 2024 general election Pro Bono Economics found that “increases in GDP that occur during a party’s time in office seem to bear very little direct relation to their electoral fortunes at a general election”. Increases in life satisfaction were a far better predictor of the government’s election success, perhaps feedback on what really matters to us all?

The next component of success is to build local economies with their own power and agency

Post-industrial communities often suffer because distant decision-makers, disconnected from local realities, dictate their economic futures. Local Growth Plans, key to the new government’s strategy, need to provide the route map to build locally-rooted economies committed to their communities.

The plans need to consider not just employment and attracting new businesses but also ownership of economic assets of the past and the future. We need to create a model where those driving the economy in a place care about what matters to the town and that the town gets a share of the wealth generated. Currently, in Grimsby and many other places across the country, we have a model of asset owners, including absentee landlords and distant business owners, extracting wealth from the town and letting the things that matter to local people decline, from important historical buildings to the social capital in communities.

One route to this end is to establish financial frameworks that allow local communities to share in the profits. GB Energy and the National Wealth Fund offer a national answer. Alongside this, we need local communities to have a share in the wealth created in this green transition, especially when this wealth is fuelled by the natural resources of their hometown.

Reaching this goal will require us to create a local ecosystem that can help the town robustly respond to economic shifts

The economic decline of towns across the UK proves the economic truth that areas relying on a single industry are unusally vulnerable. Between 1948 and 1960, the number of fisherman in the UK halved, and has been steadily declining ever since. Grimsby’s reliance on fishing meant that the wealth and job opportunities never recovered.

This is the way the economic roulette wheel works. Big external factors shake up industries and that leads some places to thrive and others to lose everything. Although, if we look a little further afield we see that some places decided not to enter the casino in the first place.

In the 1950s in the Spanish Basque region, a co-operative called Mondragon was established. It has created a local platform for building a diverse and robust economy that has weathered economic shocks. It now employs ~90,000 people across 95 businesses, generating ~11.4bn EUR in sales each year. In the aftermath of the global financial crisis Mondragon was able to help keep jobless levels in the Basque region to less than half the national average. It did this through enabling workers to move between businesses, make collective decisions to reduce pay, and provide access to an inter-business solidarity fund.

The new government’s growth strategy should support the creation of local economic ecosystems that are diverse; have access to flexible financial instruments to weather crises and are working in the long term interests of a thriving place and people.

Achieving this will help businesses root in the heart of the community

Due to the globalised nature of our economy, there are not enough incentives for businesses to back and develop talent in the places they are based. There is often publicity about the number of jobs provided when big employers set up a new factory in a region. This is important but feels like the very lowest rung on the ladder when considering how an industry can contribute to the place it is located.

We need to be far more imaginative about how industry can be a partner in the transformation of our post-industrial towns. Alongside the growing green economy we should develop the infrastructure to build local supply chains and create institutions that can build world class skills for emergent industries - enabling people, places and our country to be world leaders.

In Grimsby, we are exploring the potential for an accelerator which will support the growth of businesses that enable the energy transition. This needs to be done differently. It cannot just be “located in” Grimsby, it has to be woven into the place – competitive businesses that work together to share skills, ideas, and innovations, and are connected with the identity of the area, local skills, assets, and opportunities. Examples of these businesses exist in many places – our ambition is to create a system in Grimsby that makes them the norm.

This should enable us to create growth that delivers tangible benefits to people’s day to day lives.

The concept of growth is very esoteric, despite economic policy touching every aspect of our day-to-day lives. Alongside long-term investment that will generate structural, sustainable change in the future, we need growth that delivers change today for people and communities. In our Pol.is survey people talked about wanting a green economy that contributes to the town.

We have an opportunity to rapidly scale the delivery of community energy solutions so that all homes and small businesses can have access to cheap renewable energy and the financial uplift of selling back to the grid. There is a US Department of Energy model that enables renters to benefit from cheap renewable energy through community solar projects. If we want everyone to benefit from the renewable transition these are the sort of initiatives we should take inspiration from.

Britain’s new government has set out its plan to take a proactive role in driving our national growth. In doing so it has an opportunity to change the rules of the game to ensure that this is “good growth” providing the fuel to reignite our Ordinary Hope. The task now is to meet that challenge.