Archbishop of Canterbury ‘deeply sceptical of trickle-down economics’
The Archbishop of Canterbury has said he is “deeply sceptical” about so-called trickle-down economics, as he warned there was “no moral case” for Government budgets that disproportionately hit the poorest.
In a wide-ranging interview with the Guardian newspaper while on a tour of Australia, Justin Welby also backed climate activists as he warned that the weeks ahead feel like a “monstrous wave” as he worries about what the winter holds.
Amid the political and economic chaos in the UK Government, the Archbishop expressed his concerns about tax cuts for the very wealthiest.
And while he expressed a desire not to be “party political”, the comments come as Liz Truss battles to retain her premiership after a dramatic U-turn on some of her signature economic policies.
“I’m not going to make a party political point because both parties are deeply divided and I’m not going to talk about Australia because I just don’t know the situation. But in the UK, the priority is the cost of living, with the poorest.
“And from an economics point of view, I’m deeply sceptical about trickle-down theory.
“You know, if you cut money for the rich, ever since Keynes wrote his general theory in 1936, whenever it was, he showed very clearly that the rich save if they’ve got enough to live on. So if you want to generate spending in the economy, you put more money into the hands of those who need the money to buy food, to buy goods, to buy basic necessities.”
He continued: “There are lots of ways of addressing the problem. It’s not a problem of inequality, it’s a problem of spreading wealth sufficiently in order to ensure that those at the lower end of the scale can both heat and eat and have a reasonable standard of living.
“And that is essential.
“One of the big areas we see in the UK in the latest figures is a very, very high level of people on sick leave.
“So although unemployment is low, productivity is not rising because so many people are on long-term sick leave. And because people aren’t being trained enough, those are the things that will grow the economy.”
In the same interview, he said he could see no “moral case” for setting budgets disproportionately impacting on the poor.
He expressed concern about how food banks at home would cope in the months to come.
“I’m extremely concerned. Really, really concerned.
“We have seen in some areas food bank use already going up 400%.
“At a recent meeting of the bishops someone said, ‘I just don’t know how this diocese will cope in meeting the social needs.’
“It just feels like a monstrous wave coming at us and we know it is going to hit. We can do our best to prepare for it but it’s very, very difficult.”
The Archbishop also appeared to give his backing to greater and more urgent action on climate change.
Asked if the Church should be doing more to encourage people to take action on climate change, he said: “Yes, they definitely should. An awful lot of people are. And they should be encouraging. And you know, they are, we are collectively doing as much as we can.
“Seeing the devastation here, the biggest flood in history, it just brings it home that the impact of climate change is life and death for a huge number of people already, let alone in a few years.
“Why are people hanging back? Because it is so easy for short-termist issues to displace long-termist. Urgent and immensely important short-termist issues, for instance the Ukraine war – they have to be dealt with but there is only so much bandwidth in government and governments run out of bandwidth to deal with that and the long term.”