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

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The Independent Online

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.