Is growth a precondition for fairness?

Jack Jeffrey argues that we need to rethink growth rather than seeing it as a necessary first step in building a fairer society and economy

For almost two decades, the British economy has been characterised by stagnation. Since the 2008 financial crisis, real GDP has grown at an annual rate of around 1.5 per cent – roughly half the post-war average. Over the same period, real wages have flatlined. Had pre-crisis trends continued, the average worker would now be earning around £14,400 more per year. Household incomes have risen only marginally, and millions of families are considerably worse off than they would have been. The effects of stagnation are no longer confined to macroeconomic charts. They are visible in underfunded public services, declining living standards, and growing public frustration with the status quo.

This frustration has given rise to a new intellectual and policy agenda under the broad heading of “progress studies”. Its most prominent British iteration, the recent manifesto Foundations: Why Britain Has Stagnated, argues that growth has been constrained by political decisions: namely, by regulatory and planning frameworks that restrict private investment in housing, infrastructure and energy. According to this view, it is not that Britain lacks dynamism and innovation, but that the state has made it nearly impossible for productive activity to scale. Remove the barriers, liberalise planning, accelerate infrastructure approvals, streamline regulation, and growth, supposedly, will return.

Because this argument frames its solutions in terms of market liberalisation, it has tended to resonate most strongly with the economic right. But a new think tank, the Centre for British Progress, recently launched in an attempt to reclaim the language of growth for the left. Its founders argue that a politics focused solely on redistributing a static pie ends up rationing care, triaging public services, and pitting communities against one another. Only sustained growth, they contend, can provide the fiscal base for ambitious progressive aims: universal childcare, green investment, regional development. These arguments are plainly gaining traction in Labour circles. The Labour Growth Group, for instance, was set up following the government’s commitments to prioritise growth, to explore how a pro-growth agenda can be aligned with social democratic goals. Across these efforts, growth is reframed not as a technocratic objective, but as a precondition for fairness.

The appeal of this argument is clear. Without rising national income, tax receipts plateau and policy becomes a series of zero-sum trade-offs. But that perspective is not without criticism. Research from the Bennett Institute has shown that headline GDP figures can mask deep inequalities in how gains are distributed. Once the income of the top ten per cent is removed, the UK’s growth performance appears even more anaemic. Economic expansion has accrued to those already at the top, bypassing the median household entirely. In such a context, faster growth does not necessarily translate into better living standards for the majority. Indeed, it can coexist with widening inequality and economic insecurity.

The economic historian Jim Tomlinson goes further. He argues that much of the limited GDP growth in recent years has not flowed into broad-based income gains but has instead accumulated as capital wealth. These wealth stocks – often tied up in housing, land and financial assets – have grown far faster than the underlying economy. In this sense, the state’s taxable capacity has become increasingly detached from GDP growth itself. Potential revenues, according to Tomlinson, now hinge less on stimulating additional output and more on whether existing wealth can be taxed effectively. If the aim is to fund better services or reduce inequality, the challenge may lie not in waiting for growth to resume but in devising the tools and political coalitions needed to access the wealth already held by a minority.

History lends weight to this caution. Growth, on its own, does not guarantee fairness. Far from it. The 1980s saw the British economy expand rapidly, yet inequality surged alongside it. That episode, among many others, shows that without deliberate effort to shape its outcomes, growth can concentrate wealth and power rather than diffuse them. This tension won’t resolve itself. It hinges on the institutional frameworks that govern who gains and who doesn’t. When distribution is treated as an afterthought, growth becomes brittle, stalled by weak demand, political disillusionment, or both. On the other hand, strategies focused solely on fairness, untethered from the conditions that support growth, risk running up against hard fiscal limits.

The key question is not whether fairness depends on growth, but what kind of growth can sustain a fairer society. This requires moving beyond reflexive calls for deregulation on the right, as well as resisting degrowth proposals from parts of the left. It calls for rethinking the institutional architecture that shapes who owns, who profits, and who exercises economic power. As others have argued, prosperity does not precede redistribution, it depends on it. Without a more equitable distribution of income, assets, and authority, growth risks becoming both politically and economically unsustainable. The task ahead is not just to restart growth, but to remake it.

This post is written by Jack Jeffrey, Senior Researcher at the Fairness Foundation.