By the end of this month, perhaps as early as next week, the prime minister will have signed and dispatched a letter notifying the European Council of Britain’s decision to leave the European Union through the provisions of article 50 of the Lisbon treaty. There will be no turning back. The most serious negotiation in our post-war history will commence. It must conclude within two years – unless the remaining EU member states determine that the negotiating period can be extended. It will shape our new settlement for decades to come.

Just as the remaining member states celebrate 60 years since the Treaty of Rome laid the foundation stones for the modern EU, Britain will close the chapter on 40 years of its membership. At this juncture in our history, we face a crucial choice. Will this be a moment for national renewal, where we courageously confront our problems, or will we simply attempt to muddle through? Nothing would be more British than the latter – and that would appear to be where both sides of the Brexit divide are taking us.

This is the case for the other approach – for using Brexit as a moment to bring about the change that Britain needs. If we are to embark on fundamental changes, we must first frankly acknowledge our problems.

In many respects, the vote to leave the European Union was paradoxical. It was a vote for change that made positive change harder to achieve, but change of some sort much more likely. First and foremost, our economy is in need of deep, fundamental change.

Neither Remainers nor Brexiters are facing up to our problems – and their failures are letting Britain down

Yet neither Remainers nor Brexiters are facing up to our problems – and their failures are letting Britain down. During the referendum, Remain campaigners argued that things were fine when they were not and, since the result, Brexiters have argued that things will be fine when without serious change they will not be.

Even now, Remain campaigners have retreated into the comforts of pointing to a base and deceitful campaign by the Brexiters, rather than seeking to define or to solve the deeper problems that led to the vote against the status quo. At the heart of the Remainers’ failure is their inability to understand the reality of daily life for many people and communities in modern Britain. They fail to grasp that the current economic model is not working for many people.

Many Remain campaigners note that, in many parts of the country, people feel they have not shared in the economic recovery. In most of the country, there has been no recovery: outside London and the south east, there is not a single region of Britain where have incomes returned to their pre-financial crisis peak. That is a fact, not a feeling.

Immigration is such an important issue precisely because free movement of labour is the crucial enabler of the low skill, low productivity, low wage economic model that has been imposed on much of the country. It is this economic model – combined with the cultural and identity challenge of large-scale immigration – that has created such discontent with the status quo.

As the Financial Times recently pointed out, this settlement produced an expanding economy with falling wages. It should have come as little surprise, then, that many voters revolted against this situation of profound economic injustice.

What’s more, there is nothing progressive about declining to invest in skills in this country, while plundering poor countries of nurses or doctors or carers and then approaching immigration as if people were commodities to be bought up on the open market.

Facebook Twitter Pinterest Boris Johnson with Priti Patel and Michael Gove in Preston, Lancashire, during the Vote Leave referendum campaign. Behind them, the infamous bus promising £350m a day for the NHS. Photograph: Stefan Rousseau/PA

In contrast, the Leave side cleverly seized upon the narrative of change during the campaign (before pivoting to false comfort since the result was declared). Leaving the EU was offered as the magical solution to all of Britain’s problems. Fake promises, such as £350m a week for the NHS or a new points-based immigration system were put on offer.

When challenged about the costs of Brexit, leading Leave figures continue to argue that the UK can enjoy all of the benefits of membership, such as frictionless, tariff-free access to the single market, while bearing none of the burdens. When asked about the challenges, they respond with false reassurances that everything will be fine, and nostalgia for our past, as if this is a prescription for the future. It is both because the Leave campaign was so deceitful and the real policy cupboard is so bare that many Brexiters have attempted to shut down all debate about Britain’s future since the referendum result was declared.

Brexit is the summit of their ambitions for Britain, not the starting point to solve our future challenges. Indeed, it has never mattered to the Brexit campaign leaders that leaving the EU will make it harder to confront Britain’s economic and social problems.

Theresa May offered her analysis of the problems facing Britain on the steps of Downing Street moments after kissing the Queen’s hand in July. Yet last week, chancellor Philip Hammond offered an “upbeat assessment” of the British economy. The message does not appear to have got through from No 10 to No 11. Just like his predecessor, Hammond chose to focus on the top-line numbers while ignoring the deeper problems below the surface.

Relatively good headline growth figures mask a more troubling story about the fundamentals of the British economy. A few quarters of reasonable economic growth serve only as a rebuke to the more alarmist predictions of Remain campaigners.

There are multiple symptoms of a distressed economy, many of which stretch back for decades. Brexit is not the cause of these problems, but it should force us to face the diagnosis. We need a new national economic policy that is pro-growth and pro-economic justice.

First, we have an investment problem. Investment is the engine of the economy, driving wealth and prosperity now and in the future. For a quarter of a century, the proportion of the economy dedicated to investment has been declining. We lag behind comparable countries in the west, and miles behind fast-growing economies in the east.

Brexit undermines central parts of the investment case in Britain: political stability and access to the single market

Businesses in Britain are failing to live up to the number one expectation of the communities in which they are located: people rightly expect business to invest in order to create good quality jobs. Brexit compounds the challenge by undermining two central parts of the investment case in Britain: political stability and unfettered access to the single market of 500 million people.

Cheap and plentiful labour from across the European Union has led firms to add more workers at low cost rather than to invest in plant, machinery or new forms of automation that drive up productivity. Some British corporations appear to have given up on investment, preferring to return more cash to shareholders than to invest in the future. This has led to the astonishing situation where British companies have become net savers rather than borrowers.

The second major problem is poor productivity. Low investment leads in turn to low productivity, and thence to low wages. As Nobel Prize-winning economist Paul Krugman observed: “Productivity isn’t everything, but in the long run it is almost everything.” Since the financial crisis, productivity growth in the British economy has stalled, leading to a stagnation in living standards for the majority of households.

The third problem is trade. It is all well and good to aspire to be a “great global trading nation” but today we have a massive trade deficit. If countries are queueing up for a free trade deal with Britain – and it’s not clear that they are – it is because we’re an importer, not an exporter. The last time we sold more to the rest of the world than we bought was in the mid-1990s, and sustained surpluses have not been achieved since the late 1970s and early 1980s. Our enormous trade deficit means that the British economy is dangerously dependent on the “kindness of strangers”, who we need to sustain investment in our economy.

The difference between what we sell and earn from the rest of the world and what we buy from it has grown to 6% of the entire British economy, financed by expanding debt and selling off British assets. Were it not for the sale of ARM Holdings, Britain’s largest tech company, to Japan’s SoftBank for £24bn in July, the position would be even worse.

The fourth problem is inequality between households. In the 1980s, the gap between the richest and poorest in society accelerated rapidly, where it has stubbornly remained ever since. The richest 10% of households have incomes that are 11 times those of the poorest 10%; in France and Germany, the difference is seven-fold, and in Denmark it is five-fold.

These differences accumulate over time, meaning that there is an enormous gap in wealth as well as income.

Facebook Twitter Pinterest Theresa May faces questions during the EU summit in Brussels last week. Photograph: Dylan Martinez/Reuters

The fifth problem is the profound regional imbalance of our economy. London is the wealthiest region in Europe and, together with the south-east of England, accounts for 40% of national output. Meanwhile, all other regions of the UK lag behind most other regions of northern Europe. Outside London and the south-east, every other region has below average productivity.

The striking fact about these problems is that they are all of long standing, in some cases going back three or more decades. They are not temporary weaknesses in an otherwise sound model. They show that fundamental reform of the British economy is necessary.

As well as facing up to the deep and persistent problems in the economy today, we need to prepare ourselves for a decade of disruption. The changes on the horizon have the potential to reshape our economy and society – for good or for ill, depending on the quality of our response.

During the referendum campaign, there was no articulation of the challenges that we face in the decades ahead and why and how they might be easier to confront in partnership with our neighbours than alone. With better leadership, the EU might have been transformed into a safe harbour in an era of profound challenges from globalisation.

During a campaign that revealed the public’s appetite for change, Remainers had fought an uninspiring campaign for the status quo. There was no attempt to make the positive case for international co-operation. No account was given of how Britain had shaped the EU, nor any roadmap offered for how we might influence its future to better respond to the big drivers of change.

The first driver of change is what has been described as the fourth industrial revolution: exponential improvements in new technologies. Accelerating computing power, machine learning and artificial intelligence, automation and the “internet of things” have extraordinary power to utterly reshape how we live and work, to reorganise our social, economic and political institutions and to redistribute power and reward in society.

Without deliberate policy, technological change is likely to increase the share of rewards to those who have capital, whilst diminishing the rewards that go to workers for their labour. Moreover, the rewards for the highly skilled will continue to accelerate whilst diminishing for everyone else.

The second big driver of change is demographics. Our population will continue to grow, with the UK set to become more populous than France by 2030, and exceeding Germany’s population by 2040 to become Europe’s biggest country. At the same time, the population is set to age significantly, with a 66% increase in the number of people over the age of 75. With this change comes huge challenges in housing, health and social care. Between now and 2030, the working age population will grow by just 3%, while the number of people over 65 will increase by one third.

The UK is set to become more populous than France by 2030, exceeding the German population by 2040

The continuing shift in economic power eastwards is the third driver of change. By 2030, emerging economies will have emerged: they will account for half of global output, up from a quarter today. Nearly 60% of global middle-class consumption will come from Asia, and 17 of the top 50 cities by GDP will be in China. With American leadership of the post-war global order increasingly in question, the shape of global institutions is likely to shift considerably.

The final – and most perilous – driver of change is the new geological era we appear to have entered, where human activity has become the dominating influence on nature.

Today, we are consuming resources at 1.5 times the ability of the earth to replenish them. This requires a radical economic response in the coming decades to mitigate and reverse environmental damage. The transition towards a low-carbon world is crucial to the vision of an economy fit for the future.

The crucial question is about the choices we make in responding to these disruptions .

There are two possible broad choices. One is to embrace greater international co-operation, act in the belief that a problem shared is a problem halved; that just as capital flows and firms operate across borders, so there will be a greater premium on nation states working together in the future. That argument – the positive case for the EU – was never really put to voters. Exiting the EU makes this path significantly harder.

The other choice is to argue that the extraordinary pace of change means that it will be agility – the ability to respond rapidly and flexibly to change – that will matter. If this is true, then Britain might be better placed to prosper outside the clunky framework of European regulations and institutions. This argument was only ever made in the abstract, devoid of any substantive actions.

Yet it is precisely in their response to the challenges of the future that Brexiters reveal themselves. Lacking any substantive answers, they respond by attempting to shut down debate by condemning “remoaners”. They do not even attempt an argument that future success will be determined by the agility that Brexit might create, let alone offer meaningful ideas or proposals. In truth, their version of Britain’s future is a nostalgic past that never really existed.

We are living at a moment when an old economic settlement is in crisis, but a new settlement has yet to be formed. It has been apparent since the financial crash of 2008 that there has been a serious breakdown in the economy; what is now becoming clear is that this is leading – and needs to lead – to a new approach to economic policy, with a new underpinning of economic ideas.

That’s why the IPPR Commission on Economic Justice is so timely. It brings together leading figures in British public life – from the archbishop of Canterbury to business leaders, trade union leaders, leading economists and community activists – to address the persistent problems and ensure that Britain is ready for the future challenges. The goal of the Commission is to rewrite the rules for the post-Brexit economy.

The politics of the future will belong to those leaders who are prepared to face up to our present problems and future challenges – and to articulate a new destination for our economy and society. As our politicians navigate the Brexit storms, they would do well to keep an eye on the new horizons which will come to define the new era of British politics.

Tom Kibasi is Director of the Institute for Public Policy Research and Chair of the IPPR Commission on Economic Justice