by Peter Watt
There is nothing like a bit of hysteria to whip up a good story. The report from venture capitalist Adrian Beecroft into possible changes in employment law was finally published this week. I say finally, as the draft report leaked to the Telegraph was dated October 2011. The reaction of much of the left has been so frenzied Labour is in danger of missing a trick.
First things first; the report is not in itself going to deliver growth in the economy, it is not in fact in any shape or form a growth strategy and, as far as I can tell, no one from the government is claiming that it is.
People keep saying that we need a growth strategy, as if growth is simply in the gift of the government but no one has yet established quite what this holy growth grail looks like. Hikes in spending aren’t possible and the options to tax raise tax to fund investment are limited. And so, whoever was in charge, would face the same problem.
Labour of course has its “five point plan for growth and jobs” which is ok as far as it goes but it really isn’t going to singlehandedly turn the economy around, even if it was fully implemented tomorrow. No, the uncomfortable truth is that the road to growth is likely to be paved with luck and a series of small and not very exciting stepping stones that cumulatively help encourage investment and inspire consumer confidence and thereby, help our economy to grow.
The government has however put all of its economic eggs in one basket; as David Cameron seemed to confirm this week when he again claimed that the only way to deliver growth was austerity.
In the face of this, it is right for Labour to criticise the government’s lack of ambition on growth and or even tweak its economic approach in light of evidence that it needs to do more. Where is the creativity, the innovation or the optimism? Some measures may work, others may fail but when faced by a flat lining economy, surely it is worth trying?
The government could continue to cut spending while taking some modest steps that may help deliver growth. Some of these measures could be very local or regional whilst others, as Peter Mandelson and Ed Balls set out, should be delivered internationally.
So why then has Labour become near-hysterical about the Beecroft report. Logically, looking at removing barriers preventing firms from employing people has to be a sensible thing to do. It doesn’t seem unreasonable to allow a government to remove red tape to allow business to prosper.
