From the TUC

The Government’s Empty Growth Strategy

07 Mar 2011, by in Economics

Was that it? After months of waiting for a Government growth strategy, reports of David Cameron’s speech to his party’s Spring Forum in Cardiff had many of us impatient for the news of what was going to be done to boost skills, to build world class companies, to put sustainability at the heart of industry, to invest in key sectors.

What did we get?

“I can announce today that we are taking on the enemies of enterprise. The bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible, particularly for small firms. The town hall officials who take forever with those planning decisions that can make or break for a business – and the investment and jobs that go with it. The public sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain’s small and medium sized companies from a massive potential market.”

Well, that will have our mighty industrial competitors, the French and the Germans, the Americans and the Chinese, quaking in their boots!

The Prime Minister went on, “the Budget in a few weeks will tear down the barriers to enterprise and be the most pro-growth Budget this government, this country has seen for a generation.” The TUC hopes it will be, but the Government won’t achieve growth on the back of a few slogans about getting rid of red-tape.

Let’s be clear. We would all like to see unnecessary red-tape swept away. We all know how something well-meaning can mushroom into something cumbersome and can stand in the way of action. That’s why the TUC is happy to talk to government and others about better regulation. We don’t talk to them about deregulation, because this is often code for getting rid of proper protections for working people, either in order to penny-pinch or to move down a particular right-wing political path.

I’m not sure that attacking “the bureaucrats in government departments” as the “enemies of enterprise”, as the Prime Minister did, will do much for civil service morale, at a time when many of them are working short-staffed and in fear of losing their jobs to spending cuts. The Government is also facing both ways on public sector procurement. It wants to buy cheaper, which can often only be achieved by economies of scale, but it wants 25 per cent of contracts to go to SMEs, who by their nature, can’t deliver economies of scale.

Meanwhile, here’s an interesting paragraph from Larry Elliot’s article in today’s Guardian:

“But there is also a case for the Bank (of England), in its new role as the City’s watchdog, to be given tools that would allow it to discriminate between lending for productive purposes and lending for speculation. If the government was serious about rebalancing the economy, it would keep control of the banks taken into public ownership and use them to invest in sectors of the economy seen as important for the future.”

The TUC has previously argued for a strategic investment fund to rival the one in France, which targets growth sectors. Agree with us or disagree with us. Agree with Larry or disagree with him. But can we have a real growth strategy, designed to genuinely allow us to compete with the rest of the world? If not, will the last person to leave Britain please turn out the lights?