Anthony Painter

George Osborne has an interesting article in The Times today where he outlines the Tory economic vision. Firstly, let me say where I think he is saying some of the right things and it is in two main areas: financial and banking reform, and growth strategy.

1. Financial and banking reform. I had a bit of fun at the Shadow Chancellor’s description of his proposals for financial regulatory reform as being ‘Obama style’ on Friday. Today I’m going to give him some credit- if these possibilities have become something we used to call ‘policy’ then he is headed in the right direction. If he were to make it contingent on international agreement then he may get nowhere. So some of the thinking is right. As I argued on Friday, I just doubt that he will get there.

2. Growth strategy. He states clearly in the article:

“Exports and business investment provide the key to a sustainable recovery.”

He goes on to tantalise us with a new world where the UK is invading Chinese markets:

“The Chinese are likely to develop from a nation of manufacturers to a nation of consumers, just as we did in our Industrial Revolution. We can sell them our branded goods, our aircraft engines, our films and television, our pharmaceuticals, our financial and legal services, our higher education, and we can even attract their tourism.”

Sounds great. But how do we get there? And that is where George Osborne’s economic argument completely collapses. There is no plan. Oh sorry, there is the normal drum banging on removal of red tape. Is that really why we haven’t grown an advanced manufacturing base as we might have done- red tape? The argument is just silly- especially when you take into account the fact the World Bank places the UK fifth in its ranking of ease of doing business.

And that’s the problem with George Osborne’s argument (and let’s leave the argument that the recession was caused by government borrowing when the UK had one of the lowest national debt levels amongst the advanced economies as not being serious.) He has some good hopes and dreams but not any clue about how to achieve them. The market either delivers or it doesn’t.

No, the more serious thinking is being done by the Government- Lord Mandelson in particular. The approach is strategic and aimed to coalesce business, finance, government, and education behind strategic economic opportunities. Yes, of course business investment, export growth, banking and financial reform are important objectives. The real question though is which policies have a better chance of achieving those objectives and re-balancing the UK economy in the process.

That’s where the Government has an argument and George Osborne has vague hopes and dreams.