(i) to reduce price inflation to a running average of no more than 1 per cent per annum;
(ii) to achieve and sustain an average rate of growth in national output of 3 per cent per annum;
(iii) to reduce unemployment to 3 per cent of the workforce.
These objectives would meet with widespread support. Moreover, the same objectives would be suitable for the EC as a whole and, if adopted, would strengthen support for the steps towards monetary union set out in the Maastricht treaty.
Hamish McRae ('The case for setting long-term targets', 29 September) draws attention to Japan's five-year plan for low inflation, a 3.5 per cent growth rate, 2.25 per cent unemployment and substantial improvements in the infrastructure.
If Japan can plan - and with considerable success - why can't we? In Britain's case we need a new institution to be responsible for economic policy and management, preferably independent of the government. In addition to formulating and implementing plans to meet the national objectives, the new body should be responsible for monetary policy and the broad thrust of fiscal policy. It should be answerable to Parliament and not to government and its chairman and board of directors chosen and appointed by an all-party parliamentary committee.
To meet the objectives, the plans should include:
(i) a major expansion of education and training to close the gap between Britain and competing countries;
(ii) a steady increase in investment (ie, gross fixed investment as a proportion of gross domestic product) to an average of 23 per cent;
(iii) a programme for the modernisation and expansion of the
What we now need is clear leadership to unite the country, to restore confidence and the will to succeed. We need a long view, extending beyond the lifetime of a parliament, with our national economic management in the hands of a national institution unfettered by petty party politics.
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