Going for growth is the key challenge for the Coalition. In fact, pretty much all their eggs are in the growth basket. If GDP does not show a marked and impressive upward swing over the coming years, then the government’s overall strategy becomes considerably harder to realise.
You can still start to get the deficit under control in a zero growth world. You can still encourage an upsurge in volunteerism in a Big Society. You can still attempt some structural reforms of our antiquated health and education systems. But these things become a whole lot easier – or at least considerably less difficult – if you’re witnessing 3% growth in the economy, rather than dealing with flatlining GDP figures which may even have been tipped into the negative because of a bad bout of snow.
Frustratingly, the government has turned to the “growth agenda” rather late. Fiscal retrenchment and the Big Society have been the consuming themes of the Coalition’s first nine months.
They’ve talked a big game on deregulation, Nick Clegg’s Freedom Bill was supposedly going to be the most substantial recalibration of the relationship between the individual and the state since the 1832 Reform Act. When it finally emerged last week, despite containing a raft of basically welcome proposals, it is doubtful it will even be considered the most substantial recalibration of the individual and the state to take place this year.
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