“Mission accomplished,” declares the Chancellor – growth has returned, vindicating his strategy. As Liberal Democrats kick off the party conference season in Glasgow this weekend, we face a stark choice on economic policy – agree with Osborne’s assessment and adopt his approach as our own, or set out a distinctive policy that’s more likely to achieve the aims our members and voters espouse.
The Social Liberal Forum backs the latter, tabling amendments that give voice to an independent, distinctive economic vision that the Lib Dems must elaborate on at the election. Party members will make their choice democratically, in a politically challenging context – recent positive economic data appears to make the Chancellor’s case for him, that the government’s chosen path is the only way. Some commentators even say that Mr Osborne has won the political argument on the economy.
Look under the surface of the recent upswing, however, and troubling questions emerge. Questions arise over the ‘mission’ in fact being ‘accomplished,’ whether growth would have returned faster and in a different form under an alternative approach, and whether a greater focus on investment, jobs, and living standards would change the nature of the economic recovery. These questions aren’t just about the past – we have to decide the best way forward, and retaining today’s approach would be to miss the chance to reshape the economy to make it fairer and more sustainable.
The narrative presented to Conference in Nick Clegg’s motion on the economy is simple enough. Aside from small changes here and there, the Coalition’s approach is fine and the party should offer the voters more of the same in 2015. This narrative ignores the persistently high unemployment – and under-employment of people seeking longer hours and more income – that blights many regions, the strain on living standards caused by escalating housing costs, and the continued dependence on financial services for growth from which the majority fail to benefit.
There are no easy answers, but it falls on the Liberal Democrats to do more than rest on our laurels – in government with Tories content to inflate a housing bubble and focused more on GDP-growth-at-any-cost than on building a sustainable, fair economy, we should strive to raise investment and median wages up to and after the next election. This means giving ourselves the tools – fiscal, monetary and structural – to bring about an economic recovery driven less by house prices and consumer debt, more by green investment and housebuilding.
More than 100 conference reps – in an unprecedented show of support – get this. Tim Farron, in calling for more investment in housing, gets it. Vince Cable, in warning of complacency on the economy and the risks of a housing bubble, gets it. History might judge that this is Osborne’s ‘USS Abraham Lincoln’ moment, declaring an end to economic strife far too soon – Liberal Democrats should distance ourselves from such hype, setting out a credible, investment-driven road to a real recovery that lasts, for all.
Prateek Buch is director of the Social Liberal Forum