Welby's warning: Much of Britain's being left behind

A general election looms, you may have noticed.

So when the Archbishop of Canterbury, Justin Welby, told me that inequality in Britain is "significant" and "widening" he was also careful to repeatedly emphasise that he believes this is a problem that has existed for the last forty years, not merely the last four. The political blame must therefore be shared.

A book he has contributed to, "On Rock or Sand", isn't officially published until tomorrow but extracts from it have already caused a stir.

In his essay Justin Welby writes that he believes there are "entire towns and regions" of Britain which, far from experiencing economic recovery, are "trapped in apparently inevitable decline".

When I spoke to him earlier he said that when he returned to London two years ago (after twenty five years) he "felt as though [he had] moved into a slightly different country" - such is the disparity in wealth and income.

The Archbishop acknowledges that the economic news of late has been extremely positive but his point is that economic growth, in and of itself, doesn't necessary leave everyone better off.

The aphorism is that "a rising tide lifts all boats," the Archbishop points out that "it doesn't, unfortunately, lift them equally fast".

"The big challenge, if we're going to rebalance, is that areas outside the south east get the same level of investment and growth and strength and increase in average incomes as the south east does," he told ITV News.

The coalition government will argue that it is committed to both raising living standards and rebalancing our economy, revitalising the cities in the north of England to create a "Northern Powerhouse". The Archbishop is clear that this is still very much an ambition yet to be achieved.

One of the central arguments in the run up to the election is whether it's possible for a future government of any colour to continue to cut public spending and simultaneously protect the vulnerable.

On current plans, total government spending will fall to 35.2 percent of GDP in five years’ time. Is it possible for the state is to shrink back to where it was in the 1930s and tackle poverty?

I asked the Archbishop if these were compatible aims. "That's a party-political question", he replied. "I'm not going to answer it.”

He does believe the gap between rich and poor is a problem that the private sector should do more to address.

This morning at a conference in the City on “Financial Inclusion” he urged banks to do more to support the communities in which they trade.

Banks benefit to the tune of billions of pounds through explicit and implicit taxpayer guarantees. In return, Welby says, they should be prepared to offer services in parts of the country where people and small businesses find it difficult to borrow money.

There is, he believes, a moral imperative for banks to help people to help themselves, even if that means incurring losses.

He also urged the big banks to "step into the gap" left as payday lenders are forced into retreat by tighter regulation, warning that "illegal loan sharks most emphatically will".

A lot has changed since July 2013 when the Archbishop said he wanted to "compete Wonga out of business".

The Financial Conduct Authority has since capped interest (at 0.8% per day), fees (at £15) and the total amount payday lenders can charge.

Welby told me payday lending is "more legitimate than it was" but that "nobody should be relying on a payday lender on a regular basis".

Would he be comfortable with the Church of England holding a stake in a reformed Wonga?

"No, they are no on our list of potential investors," he says.

The Archbishop's rally cry goes far beyond banks. Welby, like the Archbishop of York, believes more companies in Britain could afford to pay the Living Wage of £7.85 per hour (or £9.15 in London) "It can be done and it should be done.

The Living Wage, he says, is "not two holidays in Bermuda every year".