Never mind Plan B, let’s get Plan A right

Deficit reduction depended upon increased income from expected growth. However, instead of 2.6% growth we now have a double-dip recession with growth below 0%. The pressure to develop an adequate economic growth strategy has resulted in a number of piecemeal measures that have not been meaningfully backed up, so far, by the legislative programme outlined for the next session of parliament.

The recent National Audit Office report on the inadequacy and extravagant expense of the government’s flagship Regional Growth Fund (which was supposed to generate half a million jobs) once again highlights the lack of an adequate growth plan, especially for northern cities, that was explicit in the coalition government’s 2010 and 2011 budgetary models. We keep hearing the question of what’s Plan B. We shouldn’t forget, that half of Plan A, two years on, is still missing.

The main economic bill of the next parliamentary session, the enterprise and regulatory reform bill, represents a u-turn on David Cameron’s ‘moral capitalism’ declaration made just four months ago when he talked warmly about a potential co-operatives bill. Instead of greater employee rights, the co-operatives bill is gone and the new beast, alongside two other bills to reform pensions, sets out to undo employee rights while a number of other bills potentially undermine a number of human rights (justice and security bill, internet surveillance plus the retreat on same-sex marriage).

Much needed adult social care reforms have been effectively put back by at least a year. Where’s high speed rail, and where’s housing in this session’s legislation?

It looks like the growth model now, by default rather than design (I hope), is to relegate the rights and pay of our own workforce (make them cheap and sackable) in order to compete with the BRIC nations. Even if we wanted to go down this beyond-thrift path, it’s not a game in which we’re going to compete well. Far from it.

It seems we’ve reached the point of advocating something better described as ‘desperate capitalism’: a chuck things away and see what grows approach to economic development. Of course it will bring the odd amazing success story that shines out all the more in the midst of a growing economic, physical and imaginative brownfield Britain (previously known as regions). And no doubt they will become glorious case-studies.

At Voluntary Sector North West, we’d like to see two things:

  1. An urgent reassessment of what being in government means and its core duty, even as the smallest possible state, to address poverty and inequality. We’ve done some thinking on this using the government’s own principles for reform: see Responsible Reform: open public services for all.
  2. An urgent cross-departmental economic growth strategy that recognises that drip-down economic growth is inadequate, that no one sector (private, VCS, or public alone has the answer), that central government needs to defer to economic localities, and pass on the means to act to those accountable economic localities.

If we’re going to do Plan A, let’s do it right.


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Michael Heaslip
Michael Heaslip
12 years ago

Such slim intellectual rationale as exists behind Govt economic policy is based on a misreading of Schumpeter’s theory of “creative destruction” – that innovation, in creating new activity, destroys the old (where are all the railway firemen or typing pools now?). But you have to do the creative innovation first, not just slash and burn the public sector and hope new private sector growth will somehow emerge from the ashes – thats nihilism. Sadly, thats now the country’s economic policy..

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