The political debate over the past year has been dominated by argument over the deficit. How far and how fast to cut. Yet the economic signals in this country and others in recent weeks show that this debate is missing a more urgent point: how countries can secure the economic growth needed to lift their economies out of recession.
The phrase ‘double dip’ is something of a misnomer. In truth we never fully recovered from the financial collapse of 2008. We did have a couple of quarters of decent growth as a result of the outgoing Labour government’s efforts, but this was quickly choked off after the election.
The issue is not just how much government spends but also what it spends on. Much expenditure is distributional, ensuring benefits and services are delivered. Other expenditure contributes more directly to economic growth. The debate on the deficit has tended not to distinguish between the two.
The idea that government can simply cut spending and hope that the growth and jobs will come is not being borne out either by the performance of the past nine months or the declining level of confidence in future prospects.
This is of course not just a UK problem but an international one. Yet what our government does by way of response can have an impact. The ‘plan for growth’ produced at the time of the budget has failed to convince business that the government is serious about proactively trying to foster growth.
It is little wonder that the Director General of the CBI has waded into this debate, calling for the government to step up a gear and pointing out the huge need for infrastructure investment in the UK.
There is certainly the potential for job creation in the transition to a lower carbon economy and in putting policy weight behind the rhetoric of rebalancing the economy and supporting the activity of making things. Yet there is no sense of government energy and ambition in the action that accompanies this rhetoric.
Perhaps, a year and a half in, the reality of the government’s character is becoming clearer – it springs into action when faced with an immediate crisis such as the August riots, yet is failing to do the medium-term policymaking that would lead to more growth and more jobs.
This is the urgent issue facing the country. Not only do we need a strong plan for growth for the UK with policy meat behind it. We also need Britain to be leading this debate internationally.
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Pat McFadden MP is former shadow secretary of state for business, innovation and skills
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This sort of article is entirely depressing, because it appears to accept the Tories’ top-down approach to economic matters.
A lot of politicians must reckon they are humanist, but that does not mean they are concerned with people at the level of the individual human being. What we get is talk about deficits and so-called “growth”.
What matters, now more than anything, is jobs, i.e., what is needed to get a specific individual, whatever, into a job – a meaningful job.
If you had a huge tax on excessive pay and used that money to pay for, say, infrastructure jobs, we might not have “growth”, but we would have jobs and we wouldn’t have so many idle people around.
When I was a student at university (a long time ago now), my friends would put on boots and rough clothes and help build the M1. The same thing can happen now. If the politicians took a bottom-up approach and actually did something instead of talking about it, we could get the country moving quite quickly.
right, so it is announced we are in partnership with US to try and develop laser nuclear fusion. Good ! come on boffins go for it ! lets all get behind them ,hope ,pray ,send good vibes, or whatever you do and we are all saved,the world will change,the geopolitical effects enormous to all our benefit.
right, so it is announced we are in partnership with US to try and develop laser nuclear fusion. Good ! come on boffins go for it ! lets all get behind them ,hope ,pray ,send good vibes, or whatever you do and we are all saved,the world will change,the geopolitical effects enormous to all our benefit.
“elite” is why they’re startin’ them new schools , mate ” “dunno” ” and ‘complete intolerance of failure’ so what do they do with failures then shoot them ? ” “dunno” “wot happens if Tories fail to rescue economy ? ” “dunno”.
its really beginning to make me want to puke,I mean Nicholas Clegg,speaking on the economy ! he has about as much right to do that – and votes – as my cat ( and I haven’t got a cat) In ‘power’ (what rot) by default
because they were SO effing desperate to swing big they got into bed with the gang of blue who were obviously out for serious destruction this time . Destruction that could never be undone , kicking the country while it was down,catch us with our trousers down, because we are ….ing ourselves with fear over a global downturn compounded by resource speculation ,faltering new technology development , well overdue faltering political re-structuring. Its very hard indeed not to just think oh sod it just let the unions do their worst ,in spite of E.M.’s warnings .
its really beginning to make me want to puke,I mean Nicholas Clegg,speaking on the economy ! he has about as much right to do that – and votes – as my cat ( and I haven’t got a cat) In ‘power’ (what rot) by default
because they were SO effing desperate to swing big they got into bed with the gang of blue who were obviously out for serious destruction this time . Destruction that could never be undone , kicking the country while it was down,catch us with our trousers down, because we are ….ing ourselves with fear over a global downturn compounded by resource speculation ,faltering new technology development , well overdue faltering political re-structuring. Its very hard indeed not to just think oh sod it just let the unions do their worst ,in spite of E.M.’s warnings .
“I will now dismember my dismemberer” ? (Moby Dick. Melville) Well that would take guts
(literally) and the country probably is simply not strong enough,but can we wait for an election , a new government until 2015,what does it take for a vote of no confidence ? what is constitutional ?