This government never tires of saying that it was formed in a moment of economic crisis. Yet three-quarters of positive growth had then been secured. Now we teeter on the brink of an unprecedented triple-dip recession.
The government decided, two years into their administration, that they need a growth strategy, so they sent for Michael Heseltine. A few months short of his 80th birthday, the one nation Conservative has matured into a kind of political common sense. He both advises George Osborne and is lauded from the floor when he appeared yesterday at the TUC’s After Austerity conference.
What the TUC like is Osborne’s unutterable desire: an economic Plan B characterised by an active state. Vince Cable used to want the Department for Business scrapped. Not only does he now run it but he is convinced of the need for active government support to business. Osborne’s conversion to an activist state has not been as complete or as swift. But the inability of the government to secure growth is driving Conservative and Liberal Democrat ministers to embrace policies that would once have been social democratic anathema.
Heseltine is the bridge between the Conservatives and this embrace, which remains hesitant and imperfectly executed; more teenage fumble than composed, mature amour. The ‘big society’ is now a term for political historians but is evidence of a more long-standing Conservative commitment to localism and citizen engagement. The length of this commitment, however, did not get in the way of the government botching its implementation.
Attendees at the Progress Political Weekend 2011 will be unsurprised to learn that Andrew Adonis gave over a considerable section of his speech at the TUC conference to the potential utility of city mayors. That David Cameron fluffed his historic opportunity to provide England’s great cities with chance of better leadership encapsulates better than anything else his failure to devolve power and responsibility away from Whitehall and Westminster.
There is a consensus in British politics in favour of this devolution. But it has not happened. While the quiet conversion of Cable and Osborne to industrial activism should fortify us in the capacity of sanity to win out eventually, lack of devolution, in spite of the consensus in favour, should convince us that the support of Cable and Osborne in no way ensures an industrial activism worthy of the name.
Both devolution and industrial activism may have to wait for a Labour government. These ends have been willed by politicians in other parties but the means have been undermined by their incompetence. And, as Adonis’ reflections on mayors attest, devolution of political power and effective economic strategy are complementary objectives.
We have an unbalanced economy, in part, because we have an unbalanced state. No one, according to Adonis, can name the leaders of major English cities. In contrast, the leaders of German Länder are figures of national renown. It is not coincidental that, while the City of London remains dominant in the British economy, Germany has a more diverse economy.
The need for a less top-down British state is a bit like the need for better skills for the half of our young people not destined for university: a truth increasingly widely acknowledged but which we remain largely unable to meaningfully act upon. The TUC cast further light on our ever more chronic national weaknesses. Light is preferable to heat but these weaknesses are now so urgent as to threaten further national diminishment unless they are soon confronted with viable solutions.
A government in which Adonis would serve is a better bet to provide these solutions than a government that would belatedly look to Heseltine to get them out of their muddle.
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Jonathan Todd is an economic consultant. He tweets @jonathan_todd
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