Leading article: Still no sign of the growth plan the economy needs

Share

There is no denying that George Osborne is a canny political operator. In a conference speech balancing warnings about the gravity of the economic situation with reassurances that his Government can steer the country through, the Chancellor managed a string of giveaways designed to mollify the party faithful and to show he is doing what he can for austerity-hit households and businesses. What he failed to do was offer a credible plan for breathing life into Britain's increasingly moribund economy.

The party faithful in Manchester were already buoyed by promises of weekly bin collections, the introduction of an 80mph speed limit, and a revamp of Margaret Thatcher's right-to-buy scheme. In between his thrice-repeated promise that "together we will ride out the storm", Mr Osborne added titbits of his own: a second annual freeze on council tax, changes to employment rules to reduce the risk of vexatious tribunals, plans for "credit easing" for small businesses.

The Chancellor had two aims. One was to couch his pledges in terms of traditional Conservative support for enterprise while blaming the current crisis squarely on Labour profligacy and the fundamental flaws of the euro. The other was to package the policies as effective help for Britain to weather the spending cuts and the eurozone crisis without sliding back into recession. On the first, he succeeded. On the second, more substantive issue, he did not.

In fairness, the Chancellor is treading a difficult line with some dexterity, refusing to be dragged off course by either his own party or the Opposition. From the starting point that Britain must hold to its austerity plan rather than risk an unaffordable hike in long-term interest rates, Mr Osborne's characterisation of tax cuts – that pillar of Tory orthodoxy – as just as unaffordable as the public spending boost advocated by the left was a point well made.

Alas, while politically clever, the Chancellor is proving less so economically. Debt is not the only problem facing the economy. The threat of double dip comes from a marked dearth in demand. At the simplest level are questions about the effectiveness of the Chancellor's latest initiatives in meeting the challenge. The council tax freeze, for example, while difficult to argue against, is unlikely to translate into much of a spending boost given that it does not actually put money into people's pockets. So-called credit easing, under which the Government helps to create a market for small business loans by underwriting the risk, is by far the most interesting idea. But with so few details it is unclear how – or even if – the scheme might work.

But such quibbles pale into insignificance next to the observation that, even taken together, the Government's piecemeal proposals add up to neither a noticeable economic boost in themselves, nor a coherent strategy for stimulating private sector expansion. Mr Osborne says that he will unveil a fully fledged growth plan along with his Autumn Statement at the end of November – an ironic stance for a man busy lambasting European leaders for their failure to grip the euro crisis. In the two months between now and his official statement, thousands of businesses may fold, thousands of shops may close, and thousands more jobs may be lost.

If the Chancellor has a strategy for growth – and he certainly should have, so many months after the recovery began to slide – then why wait to put it in place? The implication is that there is no such strategy. In which case the Chancellor will need a Plan B to rein back the cuts. Such is Mr Osborne's choice. It is a matter of considerable concern that he does not appear to recognise it.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Lettings and Sales Negotiator - OTE £46,000

£16000 - £46000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Home Care Worker - Reading and Surrounding Areas

£9 - £13 per hour: Recruitment Genius: This is a great opportunity to join a s...

Recruitment Genius: Key Sales Account Manager - OTE £35,000

£25000 - £35000 per annum: Recruitment Genius: Have you got a proven track rec...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Read Next
David Cameron visiting a primary school last year  

The only choice in schools is between the one you want and the ones you don’t

Jane Merrick
Zoë Ball says having her two children was the best thing ever to happen to her  

Start a family – you’ll never have to go out again

John Mullin
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn