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


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

Year 5 Teacher

£80 - £140 per day: Randstad Education Leeds: Year 5 Teacher KS2 teaching job...

Software Developer

£35000 - £45000 Per Annum Pensions Scheme After 6 Months: Clearwater People So...

Systems Analyst / Business Analyst - Central London

£35000 - £37000 per annum + Benefits: Ashdown Group: Systems Analyst / Busines...

Senior Change Engineer (Network, Cisco, Juniper) £30k

£30000 - £35000 per annum + Benefits: Ampersand Consulting LLP: Senior Change ...

Day In a Page

Read Next

i Editor's Letter: A huge step forward in medical science, but we're not all the way there yet

Oliver Duff Oliver Duff
David Cameron has painted a scary picture of what life would be like under a Labour government  

You want constitutional change? Fixed-term parliaments have already done the job

Steve Richards
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Salisbury ranked seventh in world’s best tourist cities

The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album