Getting from economic bingo to a growth plan

The sheer volume of economic statistics released last week highlights the challenge facing all three

The last week has produced a bumper crop of economic reports and statistics - resulting in a form of daily economic bingo - which will define the political and economic debate for the rest of the autumn and set the scene for the run into 2012. It's a week that has sharpened the economic and political challenge on growth - not just for the Coalition, but for Labour too.

It kicked off with Incomes Data Services grabbing the headlines with their finding that this year there has been a near 50 per cent increase in total remuneration for FTSE 100 directors - a hike that dwarfs the 2.3 per cent increase in average earnings, or the 4.5 per cent annual rise in the FTSE 100. It provided extra piquancy to the rapidly unfolding events at St Pauls, as well as to our new poll showing that only one in three workers feel secure in their jobs (one in four part-time workers), a finding that helps explain the ongoing weakness of consumer spending as well as the upward tick in savings.

Hot on the heels of this the OECD slashed growth figures for the eurozone to just 0.3 per cent in 2012 and to 1.8 per cent for the US. It decided to avoid producing specific forecasts for UK (and other individual European countries), as it persisted with its own brand of economic diplomacy by serving up just enough quotes for either side of the political argument to claim at least some vindication. Less diplomatic was the International Labour Organisation (ILO) - who clearly didn't receive David Cameron's new memo calling for an end to economic pessimism - with its bleak headline that it will take at least five years for employment to return to pre-crisis levels in advanced economies, making widespread social unrest far more likely.

Next up was the ONS telling us that the UK economy grew by 0.5 per cent in the third quarter of the year, above the expected 0.3 per figure, yet a long way below what is required to meet the OBR's 1.7 per cent growth forecast for 2011. It means the economy has grown just 0.6 over the last 6 months, or a paltry 0.5 over the last 12 months. Leading City commentators immediately predicted next quarter's figures could well be worse, in part because the latest purchasing managers' index (PMI) is going backwards -- suggesting the manufacturing sector is contracting for the first time since mid-2009. The gloom was only reinforced by further turmoil in Greece - with NIESR predicting a 70 per cent chance of recession in the UK next year without a resolution of the euro crisis, and a staggering 50 per cent chance even if one is found. Continued sluggish growth also shines the spotlight on the OBR who will soon need to downgrade their growth forecasts - presumably this time to a level which leaves them confident they won't have to do this once more next spring.

All of this economic news raises the stakes for both sides at Westminster. For the Coalition the clock is ticking with little more than three weeks until the Chancellor's autumn statement and the long awaited, and much vaunted, growth strategy.

The smoke signals are not encouraging. Repeated briefings are stoking contradictory expectations, risking disappointment on all sides. On the Tory right there are high hopes that the forthcoming Beecroft report will serve up some real red meat on deregulation (eg reigning in maternity rights, and ending unfair dismissal). Few of these ideas may survive Cabinet discussion, and if they do they are likely to do little to boost overall employment levels, yet could still destabilise Coalition relations. Meanwhile, those closer to the centre ground are pinning their hopes on talk of a new stream of capital projects as evidence that a meaningful 'plan A+' may emerge, involving significant new infrastructure investment (even if it falls short of a 'plan B' which slows the pace of cuts to current spending). These hopes may well also be dashed if what materialises is simply a list of modest announcements broadly in line with existing planned (cuts) to capital spending.

For their part Labour strategists are pleased that 'growth' rather than 'the deficit' has become the dominant economic and political frame in Westminster. This is perhaps the first time (other than the momentary News International meltdown) that the issue the Labour leadership wants to talk about overlaps so directly with what the media wants to write about - which provides a real opportunity.

Despite this Labour has yet to flesh out its own growth strategy - an omission that is likely to become more glaring over the next few weeks. Labour has, of course, put forward some specific growth measures. And it has made some important big picture economic arguments - most noticeably Ed Miliband's conference speech, and Ed Balls' 2010 Bloomberg lecture. Even foes of the leadership now concede that both of these were significant moments, that have aged well, and to some degree changed the political weather. Yet supporters would have to admit that neither intervention really sought to clarify the nature of the growth problem the UK is likely to face in 2012-2015 (and beyond), never mind Labour's distinctive post-crisis approach to industrial, infrastructure and innovation policy. Neither Ed Miliband's call for a new ethic of responsibility in our system of capitalism, nor Ed Balls' critique of austerity economics answers this. Thinking on longer-term growth remains a work in progress.

In the interim the risk for Labour - on growth as on other issues - is that it repeats the pattern of getting ahead on an issue by correctly identifying and naming it (think "squeezed middle" or "the promise of Britain") only to struggle to convert this into real momentum with a distinctive policy direction. It quickly needs to learn how to make its prescience pay a political dividend.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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The deafening killer - why noise will be the next great pollution scandal

A growing body of evidence shows that noise can have serious health impacts too. 

Our cities are being poisoned by a toxin that surrounds us day and night. It eats away at our brains, hurts our hearts, clutches at our sleep, and gnaws at the quality of our daily lives.

Hardly a silent killer, it gets short shrift compared to the well-publicised terrors of air pollution and sugars food. It is the dull, thumping, stultifying drum-beat of perpetual noise.

The score that accompanies city life is brutal and constant. It disrupts the everyday: The coffee break ruined by the screech of a line of double decker buses braking at the lights. The lawyer’s conference call broken by drilling as she makes her way to the office. The writer’s struggle to find a quiet corner to pen his latest article.

For city-dwellers, it’s all-consuming and impossible to avoid. Construction, traffic, the whirring of machinery, the neighbour’s stereo. Even at home, the beeps and buzzes made by washing machines, fridges, and phones all serve to distract and unsettle.

But the never-ending noisiness of city life is far more than a problem of aesthetics. A growing body of evidence shows that noise can have serious health impacts too. Recent studies have linked noise pollution to hearing loss, sleep deprivation, hypertension, heart disease, brain development, and even increased risk of dementia.

One research team compared families living on different stories of the same building in Manhattan to isolate the impact of noise on health and education. They found children in lower, noisier floors were worse at reading than their higher-up peers, an effect that was most pronounced for children who had lived in the building for longest.

Those studies have been replicated for the impact of aircraft noise with similar results. Not only does noise cause higher blood pressure and worsens quality of sleep, it also stymies pupils trying to concentrate in class.

As with many forms of pollution, the poorest are typically the hardest hit. The worst-off in any city often live by busy roads in poorly-insulated houses or flats, cheek by jowl with packed-in neighbours.

The US Department of Transport recently mapped road and aircraft noise across the United States. Predictably, the loudest areas overlapped with some of the country’s most deprived. Those included the south side of Atlanta and the lowest-income areas of LA and Seattle.

Yet as noise pollution grows in line with road and air traffic and rising urban density, public policy has turned a blind eye.

Council noise response services, formally a 24-hour defence against neighbourly disputes, have fallen victim to local government cuts. Decisions on airport expansion and road development pay scant regard to their audible impact. Political platforms remain silent on the loudest poison.

This is odd at a time when we have never had more tools at our disposal to deal with the issue. Electric Vehicles are practically noise-less, yet noise rarely features in the arguments for their adoption. Just replacing today’s bus fleet would transform city centres; doing the same for taxis and trucks would amount to a revolution.

Vehicles are just the start. Millions were spent on a programme of “Warm Homes”; what about “Quiet Homes”? How did we value the noise impact in the decision to build a third runway at Heathrow, and how do we compensate people now that it’s going ahead?

Construction is a major driver of decibels. Should builders compensate “noise victims” for over-drilling? Or could regulation push equipment manufacturers to find new ways to dampen the sound of their kit?

Of course, none of this addresses the noise pollution we impose on ourselves. The bars and clubs we choose to visit or the music we stick in our ears. Whether pumping dance tracks in spin classes or indie rock in trendy coffee shops, people’s desire to compensate for bad noise out there by playing louder noise in here is hard to control for.

The Clean Air Act of 1956 heralded a new era of city life, one where smog and grime gave way to clear skies and clearer lungs. That fight still goes on today.

But some day, we will turn our attention to our clogged-up airwaves. The decibels will fall. #Twitter will give way to twitter. And every now and again, as we step from our homes into city life, we may just hear the sweetest sound of all. Silence.

Adam Swersky is a councillor in Harrow and is cabinet member for finance. He writes in a personal capacity.