You couldn’t invent it. There’s really only one issue in Britain today that ultimately matters: how to get growth. All the political parties recognise that, indeed proclaim it, but none of them put forward the policies that will actually deliver it. The Queen’s Speech is an irrelevance, with a whopping big black hole in the middle of it. It contains nothing about generating growth except the liberalisation of the unfair dismissal laws, i.e. making it easy for employers to throw their workers on the scrap heap without any rights at all – gratuitously vicious without having any growth-promoting potential at all. It takes wilful blindness of a high order not to see that supply-side measures in Britain’s current slump are now inconsequential and that what cries out to be done is a major boost to demand via public investment in jobs that will start the virtuous spiral of growth. Cameron and Clegg priding themselves on their wares at the last tractor-making factory in Britain (I wonder why that’s the case?) obviously still can’t hear the little boy at the back saying ‘But they’re not wearing anything’.
Nor is Her Majesty’s Opposition a hugely lot better. Timid and cautious, steady as she goes, basking in the laurels of last week’s election triumph, but without a plan that will produce serious growth either. And last week’s local elections weren’t exactly a triumph anyway – the Labour vote last year was 36% of a total overall national turnout of 39%, i.e. winning the support of 14% of the potential electorate; this year it was 38% of the overall turnout of 32%, i.e. winning just 12%. The moral of that is that huge abstentions by Tory voters gave Labour a big part of the 823 gains, but the Labour vote is still depressed and even slightly slipping, and desperately needs to be enthused by a positive vision they can believe in.
Labour is now at last beginning to talk about jobs and growth, but not with enough detail or conviction that makes people believe they really mean it. ‘Cutting less far, less fast’ must be dropped, and just restoring the Tory 2.5% VAT cut is simply not credible as a source of sustained growth. Only a big public investment programme in house-building and infrastructure will do that. Nor is funding a problem. No need to frighten the markets. Just impose a capital gains tax charge of 28% on the £155bn gains made by Britain’s richest 1,000 persons in the last 3 years, and that £43bn revenue could generate over 2 million jobs.
So long as the ruling classes and its Oxford prodigies are about then we will have no plans for growth because they are all wedded to a vision of Friedrich Hayek that some how the magic of economic growth will work by not intervening in markets. Perhaps its time to discredit the ideas that led us to this downfall and a return to the idea of sounder economics and planning from the times of Keynes who Hayek and the Chicago School of Economics so discredited.
The obvious fact is 2008-2012 is living testament of an idea gone so wrong !