This is not an acceptable plan for economic growth. Photo:Getty
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None of the parties can communicate their plans to the public

The BBC's Daily Politics debate was a familiar scene: of a political class unable to communicate its plans to the voters

In this election campaign, there hasn’t been much discussion about the health of the UK economy. There has been discussion about the symptoms: low wages, the unfinished business of deficit reduction, and the pain of austerity. The latter two in particular featured heavily on today’s Daily Politics Economy Debate. But there has been little political discussion about why it is that the UK economy has seen such a slow crawl to growth and is falling further behind other countries in the amount it is able to produce.

Yes, it’s the productivity conundrum again. Without pushing up productivity, firms will be unable to pay their workers more, and deficit reduction will stall again, because the requisite tax revenues will not materialise, as shown in research by the SMF. Robert Peston, the BBC’s Economics Editor, got in one question about the link between investment and productivity, but that was about it for the hour. Most of the rest of the debate focussed on how growth is shared, and the minutiae of specific spending and tax promises.

So we had consensus across the board about the ‘brilliance’ of taking the low paid out of income tax, but little on why the economy has struggled to generate growing wages. David Gauke had another go at explaining where the Conservatives plan to get the money for their promises to cut income tax and put extra money into the NHS; but there was little recognition that it is economic growth that will allow the Conservatives to both eliminate borrowing and spend more. Predictably, UKIP’s Patrick O’Flynn attempted to claim that UKIP was the party of small business despite not listening to business on the problem of filling skills gaps and the risks of leaving the EU.

The SNP and Labour got tantalisingly close. The SNP’s Stewart Hosie highlighted the need to grow the economy. Labour’s Chris Leslie talked about low wages leading to collapsing tax revenues, but his “are you getting a fair deal?” question suggested the worry was more about sharing the spoils than generating them.

The manifestos are actually reasonably competitive on how to create a growing economy, so it is surprising that very little of this is being spoken about in the election campaign. In a reversal of many recent elections, parties are competing on house-building, with Labour targeting 200,000 homes a year and the Liberal Democrats offering 300,000. The Liberal Democrats aim to double innovation and research spending; the Conservatives plan to increase funding for “Eight Great Technologies”. All parties are keen on infrastructure spending. There is also competition on how much education spending will be protected and how many apprenticeship places will be created. These are all areas that economists would widely agree that need to be addressed if we are to improve the underlying health of the economy. They are – if you like – the real components of a “long-term economic plan”.

Yet, none of these were discussed in today’s rather insular debate. While the parties seem to know what they need to do, they appear unable to communicate to the electorate what is needed to fix the economy and how they are going to do it.

Nida Broughton is Senior Economist at the Social Market Foundation.

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR