No, that isn’t a typo, your eyes are not deceiving you and it isn’t April Fools Day. Jeremy Warner, Assistant Editor of the Daily Telegraph, was spot-on in his comments about economic growth, in response to the latest OECD economic survey, yesterday evening.
Mr Warner wrote: “Mr (George) Osborne, (the Chancellor of the Exchequer) should enjoy his moment in the sun while it lasts, for the threats to growth, both domestic and global, are once more looking frighteningly real… the OECD has cut its forecasts for UK growth quite sharply – to just 1.5pc this year and 2pc next. This is lower by a considerable margin than the UK’s Office for Budget Responsibility is predicting, and serves as a sharp reminder that the Government’s fiscal consolidation could yet be blown off course by a weaker-than-anticipated recovery. Don’t forget, these new forecasts ignore any damange to growth that turmoil in the Middle East might inflict, and take no account at all of the economic fallout from the catastrophe in Japan.”
Jeremy Warner goes on to say: “… the Chancellor’s room for manoevre in boosting short term growth is virtually nil. The sort of supply side reform he promises to boost private sector employment will take years to deliver tangible results.”
I take issue with Warner a bit here, as I don’t believe some of these supply side reforms will have any meaningful effect on growth, in the short or long term. Reforming the planning laws and improving vocational training are obviously valuable initiatives, but easing the so-called burden of employment laws on SMEs will just undermine decent work and slashing red tape is likely to be unproductive. Getting rid of genuinely needless paperwork is fine, but this is likely to be a smokescreen for removing worker protection, again lowering the quality of work and driving down morale.
It’s good to see that it isn’t only the centre left that can see the dangers of the Coalition’s economic strategy. Even leading writers at the Daily Telegraph, often lampooned as the Torygraph, fail to be convinced.