Two years too late, there are some modest - but nevertheless encouraging - signs that the coalition are starting to realise that a policy programme designed to stimulate growth might be a good idea. Until now, ministers have tended to implore the private sector to step up to the plate without any particularly coherent explanation about what they are going to do in order to make it easier to actually carry out business in the UK. And the government has somehow managed to manoeuvre the debate into an apparent choice between austerity and growth. If framed in this fashion, everyone is going to prefer the sound of the latter.
Of course, the so-called austerity measures aren’t really a recipe for economic growth. They are simply a prerequisite. The financial crash of 2008 may have brought the woeful state of our public finances into sharp focus, but it was not the underlying cause of the problem. We have spent too long living beyond our means.
The dire state of the global economy merely ensures we are facing up to this reality now rather than later. But we were already merrily driving in the direction of financial oblivion. The banking crisis simply applied more pressure to the accelerator. The coalition’s policy of trying to trim public spending by a little less than 1p in the pound each year might just be enough to ensure we don’t head over the edge of the cliff. But it can’t be expected to achieve much more than that.
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