The picture of international gatherings promising much but delivering little has become wearyingly familiar in recent months. What’s the point of the flights, hotel bills and limousines if there is precious little by way of outcomes?
The leaders at these gatherings seem to do just enough to stave off disaster but never enough to really give their electorates and the markets a big boost in confidence and display the firepower to show they are determined to avoid a second recession.
There are two views about why this is the case. The first says it is a crisis of leadership. The particular group of leaders at any given moment is of course an accident of history. Some are fated to rule in benevolent times. Others in tougher times. There is little point in any of them bemoaning the historical hand they are dealt. Leadership has to be about leading in tough times as well as good. But certainly in recent months it seems no one is really gripping the international situation, no one is coming forward with a convincing plan for recovery and protecting individual circumstances. We often hear that a retreat into economic nationalism would be a bad thing. We don’t yet have that. But we certainly have the absence of convincing international economic leadership.
Then there is the other view that says it is not about leaders. It is about structures. This is heard more often on the right, though not solely there. The euro is a flawed project says this view. The G20 lacks proper delivery mechanisms. It is not the fault of any particular leader. The differences between the economies who signed up to the euro are simply too great to be sustained.
Labour should reject the fatalism of this second view. The structures may well be flawed but leaders have to operate in the environment that exists. They cannot shirk their duty because these structures are not perfect. Both markets and the populations which elect our leaders are crying out for a sense of economic direction.
Britain’s back seat policy is doing no one any favours. The idea that our economic problems can be resolved by having a fight about an imprecise list of powers to be repatriated from Europe misses the point. Instead what is needed is decisive action to deal with two crises on different timescales.
The first is the short-term crisis – stabilise the Greek situation, give confidence that European banks are strong enough to get through this and have enough firepower to stop contagion.
The second is the longer-term challenge – to get growth back, both in the UK and elsewhere. The flatlining UK economy is simply not growing enough to lift us out of the problems we face. We need more growth, more jobs and a sharper challenge to competition from Asia and other developing economies. We have had too much declinism about manufacturing and not enough belief in our ability to make things. We have had too much withdrawal from government involvement in areas that can create jobs such as construction or regional policy.
The human price of all this is growing. Eight per cent unemployment. Higher in many constituencies. Much higher among the young. It would be tragic if a generation of young people were left out of the opportunities and life development that works brings because our leaders decided the best they could do was muddle through. The times demand big responses backed by vision and determination. That is the leadership challenge we face.
—————————————————————————————
Pat McFadden is MP for Wolverhampton South-East and former shadow secretary of state for business. He writes a regular column for Progress Pat’s Politics
—————————————————————————————