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20 hours ago
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Ministerial speeches have two functions. They tell the audience what the government is doing and they explain why. Both elements were present when Rachel Reeves addressed an audience in Oxfordshire yesterdayon Wednesday, but there was a lot more policy than argument. The chancellor listed many actions to kickstart growth in the economy. There will be a lot of new infrastructure and new transport links – including expansion of Heathrow and other airports. The area between Oxford and Cambridge will be developed into Britain’s Silicon Valley. Ms Reeves pledged more international trade and more state subsidies for green technology.
The list was long, the persuasion was cursory. The chancellor’s economic case is that weak productivity growth has been the malaise holding back Britain’s economy. The remedy is a supply-side assault on regulation. The government will ease rules that are deemed to have thwarted crucial developments in the past. It certainly can take too long and cost too much to build in Britain. The saga of HS2 – approved in 2012, started in 2017, not due for completion until 2033 and likely to cost nearly double the original £37.5bn estimate – is a parable of that dysfunction.
If the Treasury can secure investment and accelerate an upgrade of Britain’s infrastructure, future generations will be grateful. Up to a point. As opponents of a third runway at Heathrow point out, the carbon impact of some projects is a cost that needs to be taken more seriously. Wanting to avert climate catastrophe is not selfish nimbyism.
This is where Ms Reeves’s political argument needed to be more developed. Her basic premise is uncontroversial: a growing economy creates jobs and generates revenue that can be deployed for good causes – “wealth created and wealth shared” in the chancellor’s phrase. She said her goal would be achieved “when working people are better off”. She envisages “the next generation [having] more opportunities than the last”. Those boilerplate pieties could have been said by any chancellor from any party at any time. What was absent from the speech was any sense of urgency in pursuit of progressive social outcomes as well as positive economic data.
When it comes to fiscal discipline as a precondition of economic stability, the chancellor has concrete prescriptions – the bill for sickness-related benefits must come down. But when it comes to the actual experience of people receiving those benefits, there is a blank. Ministers are quick to boast of their courage in taking “tough decisions” while offering flimsy platitudes when asked to explain the purpose of those decisions.
There is a balanced debate to be had around the merits of Ms Reeves’s economic argument and what it omits. Supply-side reform may be necessary. But it is not a sufficient condition for growth. Boosting foreign trade is important, but to discuss it without reference to the European single market is disingenuous. If fiscal responsibility is a goal then it should be achieved by ways other than cutting social spending.
But, economics aside, the cumulative effect of those omissions makes the chancellor’s speech sound desperate and shallow. That doesn’t mean the Treasury’s plan is doomed to fail. It might indeed spur growth. But it is presented without a meaningful political argument, without imagination, compassion or moral purpose. Those qualities might not be necessary to boost gross domestic product, but a Labour government is badly diminished without them.
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