What do Labour mean by a "growth strategy"?

[Johnnytheboy]

Listening to Ed Balls waffling on about the urgent need for measures to promote "growth and jobs" on the radio, I realised that I really didn't appreciate what these growth measures were.

My broad understanding is that infrastructural investment would have a positive effect on economic activity. But I suspect that this isn't what Labour mean - judging by their record in power.

I have a feeling that what they mean is hiring lots of extra people to do what the current public payroll accomplishes already, and/or paying the current payroll more.

So what exactly is it that labour think the government should be doing that they aren't already?

[Johnnytheboy]

Gosh, two pages since I started this. Can't answer anyone but lots of good points.

12gauge said:

Mr GrimNasty said:

Christine Lagarde(IMF):

"...you see the gain that resulted from the fiscal consolidation that was decided on 2 years ago has been that result, the credibility of the UK government and it's ability to borrow at extremely favourable rates."

"And when I think back myself to May 2010, when the UK deficit was at 11% and I try to imagine what the situation would be like today if no such fiscal consolidation programme had been decided... I shiver."

In those few words you have the confirmation of New Labour's incompetence, and the confirmation of the fact that DC and the Tories have achieved a minor miracle so far.

You wouldnt know it watching the BBC. Or the fact the OECD today praised the UK. Osbourne has stuck to his deficit reduction target. Obama on the other hand, who the BBC idolize, has quadrupled bushes last deficit whilst promising to halve it!
http://uk.reuters.com/article/2012/05/22/uk-oecd-b...

Yep, Radio 4 reported her at length at lunchtime, then in the hourly bulletins concentrated solely on her comments about a "growth strategy" being needed, and Ed Balls agreeing with this.

martin84 said:

Its well and good to criticise Ed Balls for not having a growth plan but the more important fact is the actual Government doesn't have one either.

I still don't know what we are referring to by a growth plan. All Ed Balls will be pinned on is a temporary cut in VAT, then he just waffles.

Dracoro said:

alangla said:

Dracoro said:

I think the problem we have is the wrong political party in power at the wrong time.

In good times (say late 90s to early/mid 00s) if we had thrift then, people would not have noticed it (as the economy was growing, times were "good" etc.) and we could have run a very low (or even no) deficit.

This actually happened - when Labour were campaigning for the 1997 election, they committed to maintaining Tory spending levels for several years (3 if I remember correctly) - during this time, there was a huge budget surplus & Brown paid off an enormous amount of national debt (remember Prudence & the Iron Chancellor?). Needless to say when that pledge expired, the taps were turned on...

True. I remember this being the main reason they got in power. People didn't trust their economic record and were fearful of rising tax/debt so they said they'd stick to Tory spending plans (which had done a decent enough job after the economic woes of the early 90s) so people would "trust" them. Then, as you say, they got the 2nd term.......

I seemd to recall they made a big show about not putting up the basic rate of income tax, then put up NI instead.



The only way this thread has left me unsatisfied is that we still don't know what a growth strategy is, or should be.

I govern my own finances by the principle that I won't borrow to buy something that won't increase in value. I guess what differentiates a "growth strategy" from generalised public spending would be application of this idea. In other words, money should be targetted in making our economy more productive.

In terms of law rather than spending, we should be making this country more business and export friendly, and yet that seems to be exactly what Labour (and Vince bloody Cable) don't want to happen.

[Johnnytheboy]

This is the nub of it: I don't think Labour realise that to be pro-growth is to be pro-business. That's pretty obvious, isn't it?

[Johnnytheboy]

RichardD said:

cardigankid said:

Lots of good stuff
(ending with)
What they need to do is reduce VAT.

I don't quite get that last bit. Reduced VAT is to stimulate what exactly? ....Retail?

Yes, I'm not convinced by this reliance on VAT as a stimulus measure.

Sure, that encourages UK domestic demand, but does little for export.

I still think growth measures should target enabling businesses to be more internationally competitive.

[Johnnytheboy]

I may be being stupid here, but would an artificial "growth strategy" without genuine economic growth behind it not be more inflationary than austerity would be?

[Johnnytheboy]

sidicks said:

The frustrating thing for me is that, at this point, the Labour fkwits will no doubt claim that this is proof that they were right all along (i.e. austerity was wrong) and a policy for growth should have been done much earlier, which I believe will be opposite of the truth.

Which is why they (and their BBC chums) seized on the suggestion by Christine Lagarde that the government should consider stimulus measures if things get worse to say that austerity was a bad policy, despite the fact she also said at the same time:

""...you see the gain that resulted from the fiscal consolidation that was decided on 2 years ago has been that result, the credibility of the UK government and it's ability to borrow at extremely favourable rates."

"And when I think back myself to May 2010, when the UK deficit was at 11% and I try to imagine what the situation would be like today if no such fiscal consolidation programme had been decided... I shiver."