Learning the right lessons from Labour's economic record

Neither Labour nor the Coalition is willing to ask why Britain's tax base was so fragile.

You might think the one thing the world doesn't need right now is yet another instant history about the Labour years. But here one comes -- this time, though, with a difference. The authors certainly won't be dining out on the royalties and there's no insider gossip or "he said, she said" revelations about rows in Downing St. Which is perhaps one reason why it's worth reading; it says something serious about what did and didn't happen to economic performance during the Labour years.

It is authored by John Van Reenen from the LSE -- one of Britain's leading economists, and something of a guru on productivity and growth; together with Dan Corry, a seasoned and respected economic advisor from the former Labour government, and someone not averse to being contrary and defying the conventional view of the day.

Their central argument is that the 2.8 per cent a year productivity growth achieved between 1997 and the start of the 2008 recession was impressive in both historical and international terms; rooted in substantive improvements in a number of sectors, rather than relying on the frothy gains from financial services; and arose in part due to policy choices -- particularly investment in research and science, strong competition policy, expansion of higher education and gains in skills. Their argument is as unfashionable as it is empirically substantiated.

Above all it is an attempt to rebalance the current economic debate about the Labour years, a first (and no doubt doomed) effort at taking on those who assert that there was little more to the Labour era than an attempt to surf the wave of public and private debt over which it presided. This puts the authors at odds with the swelling ranks on left and right who wish to portray Labour's economic strategy as little more than a Faustian pact with the City: light regulation in return for growing tax-revenues. The report, of course, concedes financial regulation was a failure, but contends that wider economic policy made a real and positive difference to a range of sectors -- a point that is currently in danger of being completely over-looked.

Nor do the authors just make an argument about the past -- they also seek to pick a fight about the future. Entering the fray of the current economic debate, they refute the "supply-side pessimists" who assert there is no scope for any further stimulus on the basis that the productive potential of the economy has already fallen (which if true would mean that further expansionary policy would be counter-productive). In contrast, the LSE report contends there is plenty of spare capacity, it just requires some form of Plan B to ensure it is utilised. In truth, however, the authors are most interested in advocating a Plan V, as they term it, for long term growth involving a more muscular and far-sighted industrial policy.

For all the cogency of their arguments on productivity -- and let's hope someone in Whitehall is taking note about the insights offered about the real sources of growth -- there are some puzzling omissions and assertions. Little is said about the UK's ongoing trade imbalances. There is no investigation of the weakening link between GDP growth and the gains going to low-to-middle income Britain, and the associated wage stagnation that took hold in the years preceding the recession -- a phenomena that Labour in office failed to grasp. When you reach the end of the report you don't have much of a sense of the policy agenda that would lift the prospects of the millions of low and modestly paid workers employed in Britain's vast low-skill, low-productivity sectors. The authors, like so many others, focus their attention on what can be done to improve the industrial vanguard, rather than the laggards.

And when it comes to the record on public finances, they choose to pin-point blame on Labour's record on overall public debt, saying it got too high pre-recession. This seems like an odd argument to select given that the UK's debt was relatively low compared to others. A better target would have been Labour's projections for tax receipts -- together with the wisdom of running modest deficits in the middle of the last decade, in a period of steady growth when modest surpluses would have been more prudent.

But even this criticism is dwarfed by the real argument which neither Labour nor the Coalition wants to make as it doesn't fit their favoured narratives -- which is to ask why Britain's tax base was so fragile, crumbling so dramatically, during the recent recession in a way that those in other countries didn't. Indeed, after several years of intense focus on the need to "stress test" banks to ensure their balance sheets could stand up to future financial shocks, it is remarkable that there is no equivalent debate about the sort of tax-base the modern British state needs if it is to better withstand global turbulence in the decades ahead (see this for an exception). Only when this issue is properly aired and addressed will we know that Labour, along with the Coalition, are intent on having a strategic discussion about Britain's long-term fiscal future.

Decades will pass before a full and fair account of Labour's economic record is formed. For now we need to recognise that, love them or loathe them, instant histories matter in politics: they frame today's media coverage and tomorrow's policy decisions. Here, unusually, is one that merits a wider readership than it will get.

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

Niina Tamura
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“Anyone can do it, I promise you!”: meet the BBC’s astronaut-ballerina

Why science needs to be more open to women, minorities - and ballet.

Whether dancing on stage with the English National Ballet or conducting an experiment for her PhD in quantum physics, 29 year-old Merritt Moore often appears a model of composure. But in last Sunday's opening episode of BBC2's Astronauts: do you have what it takes? we got to see what happens when high-achievers like Merritt hit breaking point.

Merritt is one of 12 candidates attempting to win the approval of Chris Hadfield, former commander of the International Space Station. Along with her fellow competitors, who include mountaineers and fighter pilots, the dancer has had to face a series of gruelling tasks designed to measure her potential to operate well in space; from flying a helicopter, to performing a blood test on her own arm.

Many of these tasks left Merritt far outside her comfort zone. “I’ve only failed my driving test three times and crashed every car I’ve gotten into - but I think helicopters are different?!” she joked nervously before setting off to perform her first-ever helicopter-hover. Yet after a shaky start, her tenacious personality seemed to pull her through. “I’m good at being incredibly persistent and I don’t give up,” she told the space psychologist when asked to name her strengths.

Merritt also believes it is persistence (and hours of practice) that have allowed her to excel in two disciplines which are typically seen as requiring opposite traits: ballet and science. While studying for her PhD at Oxford, she has continued to perform as a professional dancer around the world. It's a stunning feat by any measure, and when I talk to her on the phone this weekend I ask whether it’s only possible because she’s some kind of genius? “No!” she exclaims, with a winning mix of genuine shock and self-deprecation. “I’m as far from a genius or a natural dancer as you can get - everyday I just feel like flailing mess! My thought process is that if I can do it anyone can do it, I promise you!”

But there is one thing that Merritt thinks might be holding back others from pursuing a mixed career like hers – and that’s the way the scientific world is run.

“They kind of self-select themselves,” she says of many science-professionals she’s met. "You get some people who are not incredibly understanding of those who perhaps approach [physics] in a different way, or who need a different type of schedule," she says. "They look down on people who are different from themselves, which is really difficult; I think that’s why women have difficulties, and I think that's why minorities have difficulties."

A report from the Royal Society on Diversity in Science would appear to support Merritt’s conclusions. It showed that women are significantly underrepresented in senior scientific roles, and that black and minority ethnic graduates are less likely to go on to work in science than their white peers.

So how can these trends be reversed? For Merritt the answer lies as much in schools as it does with targeted scholarships and support groups. Science education needs to be re-branded, she says, so that thinking creatively is actively encouraged from a young age; “It makes no sense to divide it up and say everyone either has an analytic mind or a creative mind." Simply leaning a set of very technical facts from a textbook drives her “bonkers” - but “when there’s passion behind something then anything is possible.”

If she could one thing about physics education, Merritt says she would switch things up so that the “exciting bits” get taught first - such as the latest thoughts on quantum computing or DNA repair. Then if students do choose to continue, they’ll know why they need to study the boring, rigorous parts too. “You’re like right, I need to learn about a harmonic oscillator because that’s how I’m going to understand this quantum computer.”

More cross-fertilisation between science and arts could also help the ballet world, she believes. “I can visualise my centre of mass, how gravity is working on different parts of my body, and how the torque effects my turns – and I think that’s a massive help,” Merritt says of her dancing.

But that’s far from all. When performing she often finds herself thinking about the more bizarre and “mind boggling” sides to physics: “Why is there all this dark matter in the Universe? What is that?! - when that’s going on in my mind, my legs become free because it means I’m not thinking about whether I look bad, or if something is right or not. I’m just inspired - and I want my dancing to be inspiring rather than self-critical all the time.”

Focusing on actions rather than self-image was definitely something Merritt's parents encouraged from a young age. Her dad’s work as an entertainment lawyer in LA meant he was particularly alert to the stereotypes that were being laid on young girls. And, as a result, Merritt and her sister grew up without TV or fashion magazines. Her dad was even initially worried about the mirrors in ballet classrooms

But self-criticism is also very hard to avoid when your antics are being broadcast to the nation on Sunday night TV.

“When you see yourself on screen you just feel incredibly vulnerable,” she says, “they are getting the raw emotions of how you’re reacting to stuff that you’ve never done before in your life!”. What Merritt’s episode one journey showed however, is that knowing yourself makes it easier to bouceback from nerves and self-doubt. And that perhaps more of us should be encouraged to believe that you don't have to choose between the stars on stage or the ones in space. 

The next episode of BBC2's Astronauts: have you got what it takes? will air on Sunday 27th August at 9pm.

India Bourke is an environment writer and editorial assistant at the New Statesman.