Looking for growth is a lot better than hoping for it
Rachel Reeves and Keir Starmer like to say that economic growth is the defining mission of this government, but as the latest data shows it’s starting to resemble Mission Impossible.
While the government deserves credit for addressing some of the deep-rooted issues that have held back growth for so long – whether though planning reform or productivity-boosting infrastructure projects – they’ve undermined their own ambitions from day one by fundamentally misunderstanding the growth recipe and its key ingredient; a confident private sector able to invest, innovate and expand.
Given that the UK has enjoyed only the illusion of growth for the best part of two decades, the economy was in no state to stomach the £40bn of tax rises imposed on businesses this time last year, any more than it can stomach the £20bn of additional tax hikes likely to be imposed at the end of next month, despite Reeves vowing last October that she wouldn’t be “coming back for more.”
The growth illusion was revealed post-Covid, as high interest rates and inflation combined to expose an economy running on fumes. When money was cheap and prices were stable, we could muddle on and experiment with different governments pulling on different levers, but Britain is now naked and exposed to the elements.
Take retail sales as one indicator of many; supposedly buoyed by good weather in the summer they remain 3 per cent below pre-Covid levels. This is visible on high streets across the country. Show me a new ‘solar farm’ or data centre and I’ll show you a depressed town centre.
With our growth woes now so visible and obvious, a welcome explosion of pro-growth campaigns and initiatives have capitalised on a mood of frustration. Among new parliamentary groupings and the traditional think-tank output, Looking for Growth (LFG) has emerged as by far the most interesting.
As we report, this energetic and optimistic movement managed to lure over 1,000 people to the O2 last Thursday night for an event that fizzed with ideas on how to pull this country out of its malaise. The rallying cry was unashamedly emphatic: make the UK rich again. LFG has hosted dozens of smaller meet-ups across the country in recent months, often in pubs, bringing together the ambitious, the frustrated and the growth-curious.
The evolution of the growth debate from Westminster round-tables to grassroots rallies is exciting and encouraging. After all, looking for growth is a lot better than simply hoping for it.