Growth, huh! What is it good for?
The government have to tell a story of what growth means - not just how they think they will achieve it.
This week, Rachel Reeves gave a long and highly technical speech on growth. The speech contained a lot of measures of which I have varying opinions.
I am very gung-ho about housebuilding – but I do worry that one of the pieces of ‘red tape’ that will be removed rather than improved will be about standards meaning that we build houses that are not actually fit for not just the long term but also the near future as we adapt to climate change.
Speaking of which, I do not think that airport expansion is the right way to develop our future economy and meet our carbon goals.
I discussed some of these qualms on the latest episode of House of Comments so I won’t go into them in more depth here.
My broader problem with the speech is what it didn’t do rather than what it did.
I am pro-growth as far as that is a thing. But I have questions that I think Labour need sharper answers to. Answers that can’t sound like the short throat-clearing sentence at the top of a speech that felt more like a Soviet-style list of technical measures. Questions that have to be the explicit answer to any Labour speech about growth (and as we have been told that no Labour communication – no matter the topic – can go out without the word ‘growth’ this will be all of them) must have at its heart.
First and foremost, I want to hear – over and over and over again – Labour being explicit about the answers to the following questions “What is growth for?”and “Who is growth for?”
This really matters. I have spent a lifetime working in politics and even I have only the slightest smudgiest grasp of what GDP really means. I don’t have a Scoobie what it means *to me*.
I understand that we need growth to fund the desperately needed improvements in public services. But I need to hear more about what that actually means. What does adding a percentage point to GDP mean in terms of funding schools and hospitals?
I understand that a growing and confident economy could mean more and better jobs. But why do the people of Scunthorpe benefit from the expansion of an airport in the South East? Why, for that matter, would they feel the benefit from reopening Doncaster/Sheffield Airport?
What will be done with the proceeds of growth beyond simply getting us back to a decent level of public services? How will the average PAYE worker benefit from the country's increased prosperity? How is growth felt by them, by children in their schools, by a small business person like myself?
What will a growing UK economy look like in my neighbourhood of Leyton? In Loughborough? In the Lake District?
Tell me the stories that will resonate with people. Speak about their lives and what the changes will be for the better in them. Inject confidence into all our lives – not just the letters page of the FT.
The policy of GDP and economic growth are about charts and graphs – about the numbers going in the right direction.
But the politics of growth are about vibes. About the way people feel.
I understand that this speech was designed to reset the relationship with business that went off track after the NIC measures in the budget. That was the target audience here. We’ll see if it has the desired effect. But there are broader audiences who were not addressed at all in this speech and they need to be part of this democratic conversation too. Having business people stop lining up to express disappointment on the Today Programme will help with vibes – but it will help more if you also manage to talk to people directly and not rely on these fair-weather proxies.
Finally, in order to have a vision for good growth, you must be able to understand and articulate your own boundaries. This means answering two very important questions honestly: “What will you give up in order to achieve growth?” and “What won’t you give up in the name of achieving growth?”
There are ways to get growth that are not compatible with our values. Look at China for example. Growth at the expense of democracy and human rights is not good growth. So while we might like to import their investment, we have to be clear that we have very different values.
So what do they do that you would not? Because growth might be the defining mission of the government but it is not its sole purpose or value.
Growth must have a purpose and that purpose must be articulated. Measures to achieve growth must have boundaries and those boundaries must be clear.
It will only be once there is a general understanding of what the government wants to achieve *with* growth and what they won’t jeopardise to achieve growth that the public can be confident that the government truly understands its growth mission.
That is the confidence that is now needed.
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There was, of course, a quite recent British Prime Minister who made a desperate "dash for growth" the hill should would die on - and indeed she died on it.
The problem with growth is that while it's evidently a good thing, it's really hard to actually make happen, and you can fall into the trap of justifying every policy you have with by just yelling "growth", something which voters are rightly sceptical of.
Yes. Utilitarianism (neoclassical economics) doesn't do distribution - if gdp increases by 10bn but it all goes to Mr Musk? Secondly, unwanted growth is called cancer. Thirdly, whilst slavery was undoubtedly positive for US growth, was this a 'good' thing?