The return of Stephanomics


In case you missed it, Stephanomics returned to Radio 4 on Tuesday morning.

I brought three distinguished economists round a table to debate a crucial economic commodity we talk about most when it's not there: growth.

Nick Crafts, the economic historian, had some interesting light to shed on the 1930s experience, and what we could learn from it right now. He reminded us how important house building was in helping the UK avoid a truly Great Depression.

Kate Barker, an ex-member if the Monetary Policy Committee who has spent more time than most thinking about UK housing supply and planning rules, wasn't sure we could repeat that experience today. She had her own ideas about spurring growth - starting with the banks.

But the grandest - but also perhaps the most depressing - vision of future growth in Britain came from the Oxford academic, Dieter Helm, who has spent many years advising the government and businesses on UK energy and infrastructure issues.

He thinks there are at least £500bn worth of crucial infrastructure investments that the UK needs, to raise its productivity and achieve more durable growth. But that cannot come from another government borrowing spree, in his view, and it cannot come quickly.

So it was a realistic debate - no magic bullets on offer, I'm afraid. But the debate was lively, and I think we did get past some of the tired old arguments about "austerity versus growth". What they said might also help you understand what the Chancellor George Osborne is on about on Wednesday morning, when he unveils his plans to encourage private infrastructure investment in the next few years.

If Dr Helm is right, transforming Britain's growth prospects is going to be difficult - and it won't be quick. But to paraphrase the young George Washington, if growth is going to take that long to cultivate in Britain you might say there was no time to waste.

The programme is repeated on Radio 4 at 21.30. Or you can catch it on the iPlayer.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this

    Comment number 16.

    *Everyone with a good credit record borrows up to the hilt and spends it on chinese tat. Growth soars. A good idea?
    *Growth would have been -ve for ages if we hadn't been doing this.
    *Investing in infrastructure would be good for the country long term, increase growth, and reduce unemployment. Easy peasy! So why haven't successive govts done more of it? Ans. Crazy public sector accounting systems.

  • rate this

    Comment number 15.

    For years now these people keep on burbling about Billions and Trillions.The fact is London has had a doom boom, (and all the goodies from the Olympics) and it's where the burbling class live, mostly.

    So they haven't a hope of realising what's really going on: It's not 'the economy, stupid!' -but 'Trust'--and Trust's bust.
    Now the bad guys win, good guys just look stupid-that needs fixing first

  • rate this

    Comment number 14.

    I'm extremely unsympathetic to the notion that the tax payer would be labelled as the final underwriter for private sector investment/risk. And if the outcome of private investment is toll roads and renting hospital beds then I would much rather find better business partners than what appear to be extreme parodies of the dragons den: "Want twenty G? Give me half your business.". No thanks.

  • rate this

    Comment number 13.

    How can people be so naive? We live on a crowded island with population levels rising through the roof. We have to fight increasingly hard for diminishing food and mineral resources being snapped up ever faster by China and the rest of the world. In the short run the UK may achieve some growth, but the Jevons Paradox and our chronic overpopulation will inevitably bring us poverty and chaos.

  • rate this

    Comment number 12.

    You need a distinguished economist to tell us that we should build affordable housing (in 1930s at the expense of defence mainly) to stimulate the economy. I could tell you that.

    I can also tell you that the current economic 'crisis' is not at the end it isn't even at the end of the beginning.

    Still the crooked leeches continue to receive their bonuses. I can also tell you that.

  • rate this

    Comment number 11.

    @5 U N - Monopoly money. Imagine starting a game & discovering someone misplaced all the money - it's lost. So, rather than give up and play another game we play monopoly by each player (and the Bank -that's key!) writing IOUs to other players. As long as we have paper & pencil we can play forever. So it's not monopoly money that's a problem - it's monopoly debt.

  • rate this

    Comment number 10.

    Don't bother. Listened this morning to a dull over simple discussion about nothing other than classic status quo thinking with perhaps the tiniest tangent of outside thought.

    A waste of airtime to soothe the gullible.

  • rate this

    Comment number 9.

    I am not advocating low interest rates
    or 1 penny bailout to rich bankers
    just that the only viable source for vital infrastructure projects
    is govt defecit
    private debt and rich men spending will not stop the lights going out
    will not provide affordable housing
    will not keep the trains running
    and all those train commuters off the roads
    etc etc

  • rate this

    Comment number 8.

    Disappointing program. Did not answer the fundamental problems with the structure of the economy. I.e. How to stimulate high quality and interesting employment and produce products and services which can be exported to help reduce our trades deficit. The bottom line is we need more scientists and engineers and less shelf stackers!

  • rate this

    Comment number 7.


    You must be joking? What do you think is happening with all people's savings for the last 5 years? they have been decimated,,

    Low savings rates in banks, high inflation, £ devaluation..

    The BoE/goverment has decided to punish the savers and give money to the reckless....

  • rate this

    Comment number 6.

    but uk govt has rolled over debt for 400 years
    each generation adding to the last
    it can do it for eternity
    QE proves it doesn't even have to pay it back with taxes
    the power of the currency issuer is the only viable source for those infrastructure projects
    and the growth it can promote
    will increase tax revenue and cause welfare payments to decline
    rich people don't want risk their savings

  • rate this

    Comment number 5.

    Growth!... the last hope of a system in denial.


    Incipient inequality.
    Reducing disposable incomes.
    Widespread institutional corruption.
    The destruction of trust.
    Sovereign and private debt.
    Monopoly money.
    A system that tolerates 'fixers'.
    The political power of lobbyists.


    ... and the weakness of politicians - too afraid to face these issues.

    Faced, they will have to be.

  • rate this

    Comment number 4.

    The more I listen to Economist the more I understand why we are in so much trouble .....

  • rate this

    Comment number 3.

    Pity they didnt turn their great minds to just how the old infinite growth paradigm actually squares up to the reality of finite planetary reources. GDP may have had a place in the past but it's a crude and distorting driver of economic activity. Somewhat like equating health with eating more & more food. There are alternatives worth discussion at least but sadly rarely seen on Mainstream Media.

  • rate this

    Comment number 2.

    Not sure why we we should be interested in what MPC members say!! They and M.King have failed the country.

    We had the crisis, we have very high inflation for 5 years running (Still have!), we had the libor gate, we have the banks bonuses and we have still no growth. They are utter failures.

    Finally, can you ask the MPC member why their pension fund switched to index-linked bonds on 2007?

  • rate this

    Comment number 1.

    3 economists dancing round the elephant in the room but fail to see it, its called debt. everywhere one looks we see debt. Countries, Companies, Banks & finally Families in October, will not be able to pay the interest on their Debt.
    cheers m


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