The Government has a problem – and it’s of its own making. It joined in with almost all the pundits in their minute-by-minute commentary on government borrowing costs along the path to the Truss regime’s downfall.
Labour has no right, then, to expect different treatment when markets last month reacted similarly to its own approach.
There is a significant difference though, between the Truss escapade and the current government’s issues. The former was clear about her mad plan – even though in carrying out the madness, our mortgages rose and the PM fell.
Labour’s problem sits in the gap between what was said and what has been done, creating uncertainty for businesses and citizens alike.
Different organisations demand different types of decision. Simple businesses need agility, taking decisions quickly on the hoof. Safety-critical organisations like nuclear energy decide slowly, with many checks and balances. Success depends on understanding the organisation you have and acting accordingly: but governments are pulled in both directions. Their survival depends on fleetness of foot and reacting well to events, while success rests on critical thinking, deliberation and determined action.
The antidote to this conflict is a clear and consistent strategy for government that soars above the knocks and crises below. Unfortunately, we don’t have that clear or consistent strategy yet.
Growth is just a slogan if you’re not creating the conditions for it. For example, NI contribution increases obviously do something different from what the Government says it wants. They are a drag on investment and employment across the land, costing more than £2,300 per year, per staff member. Challenging for every business, and for charities providing community services – like those being faced by Riversmeet Leisure Centre in Gillingham – these costs are calamitous.
So many things depend on growth: a social care solution, investment in health and stronger defence in Trumpian times. Making it easier to build through planning reform is a good start, but choosing Heathrow expansion seems more like picking a fight than a serious economic move.
Our trading position is crucial, and our relationship with the EU is back on the agenda for its importance to growth. Countries make trade deals to lower barriers and increase trade:
we left the EU and raised barriers, reducing trade.
Liberal Democrats want a UK customs union with the EU to increase our trade in goods, help farmers and encourage smaller businesses to re-start exports to the EU. There are trade-offs for this, such as on youth mobility and fishing, but it would not stop us from negotiating independent deals on services, which are among our main competitive advantages.
Decisions like this are more strategic and would do more for us – but would need courage
to lead.
We need and expect the government to make more consistent and less contradictory decisions that will deliver much-needed growth. Really tough decisions include questions like relationships with the EU … and it’s time to get serious again.
Gary Jackson
North Dorset Liberal Democrats
