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Daily View: Plans for economic growth

Clare Spencer | 09:27 UK time, Tuesday, 26 October 2010

Commentators dissect David Cameron, Vince Cable and Ed Miliband's speeches at the Confederation of British Industry's annual conference setting out how they would encourage economic growth.

Tim Page says in the Guardian that Mr Cameron and Mr Cable's plans don't use enough money:

"There is little wrong with what either of them has said. More money for infrastructure. Technology innovation centres. A green investment bank. A carbon capture and storage demonstration plant. A focus on 'export-led growth'.
"The trouble is, so little is to be invested in these worthwhile initiatives that it is difficult to imagine them gaining traction... The British government has previously said that the UK needs at least £200bn to be invested in infrastructure, over the lifetime of this parliament, so the £8.6bn over four years of capital spending announced in the CSR and the £30bn over four years for transport spending announced today are very welcome, but clearly fall far short of the challenge."

The Independent editorial argues David Cameron hasn't taken into account that big business and small business have different needs:

"The Prime Minister made approving reference in his speech to the letter last week by 35 well-known businessmen in support of the Coalition's plans to wipe out the deficit over the course of the Parliament. But a danger lies in the assumption by ministers that the heads of large businesses speak for the entire private sector. Very often, they do not. Mr Cameron seems to have missed the fact that the Federation of Small Businesses was sharply critical of the Government's deficit cutting plans."

In the Guardian Eamonn Butler has his doubts about Ed Miliband's alternative proposals:

"His solutions sounded - well, distinctly Brownian. A bit of subsidy here, a little tax rebate there, a support somewhere else, and firmer regulation all over.
"And, of course, a Miliband administration would seek to 'create jobs in the industries of the future'. Whatever they are. If you or I could predict what the industries of the future were, we'd be billionaires. I'm not quite sure how Miliband proposes to identify them."

Mary Riddell says in the Telegraph that Ed Miliband may do well to be vague:

"[D]oubts feed the mounting clamour for Mr Miliband to get himself 'a plan'. That is very bad advice, given the vagaries of the economic future and his recent accession. To demand, at this early stage, a universal theory that would define a vision and save the country would be like asking Alexander Graham Bell, as he pondered the first telephone, why he wasn't inventing the worldwide web."

Iain Martin says in the Wall Street Journal that he thinks Mr Cameron ignored that the government is limited in what it can do when it comes to economic growth:

"[W]hat government can do successfully in terms of taking action in this area is actually very limited. Of course it should endeavour to try and avoid blowing up the economy, unleashing inflation or encouraging insane behaviour by promising to have abolished the economic cycle (boom'n'bust). But that's about it.
"Politicians don't like being told that there's not much for them to do other than to find ways in which they can stand aside. It suggests they are not in control. Most love forming committees and working groups which pledge action and on the growth-front come up with economic plans so laboriously constructed and complex that market conditions have usually changed by the moment of implementation."

The Times editorial suggests [subscription required] Mr Cameron missed out on bringing in a cheap way of enhancing growth: making it easier to employ people:

"The fact that employment regulation is a creeping burden does not make it any less onerous. For the creep is only one-way. Those who portray businesses as whingeing fat cats, reacting to every new law in apocalyptic terms, have never had to work out how to put tax credits through the company payroll. They have never been dragged to an employment tribunal by a disgruntled employee hoping to make a fast buck. They have not launched a bid for a struggling company, only to find that transfer of undertakings regulations require them to take on people from that company on terms and conditions more generous than those of their own loyal staff, whose efforts made their business a success."

Links in full

Tim Page | Guardian | David Cameron's growth plan lacks punch
Independent | There is nothing pro-business about risking another slump
Eamonn Butler | Guardian | Ed Miliband's New Labour economics
Mary Riddell | Telegraph | Ed Miliband must trade in a grand plan for a careful brief
Iain Martin | Wall Street Journal | Growth and the Limitations of Government
Times | Feet on the Ground

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