3 September 2012 Government promises of a growth push have a hollow ring to them
Chancellor George Osborne signalled the MPs’ return to Parliament this week by setting out his stall for government growth this September.
Among the plans discussed on the BBC’s Andrew Marr Show were the UK Guarantees initiative (new legislation coming soon) and efforts to speed up the planning regime. Osborne, determined to make sure this did not sound like a move towards a so-called ‘Plan B’ of fiscal stimulus, was clear that he wouldn’t be spending much money.
Nonetheless, the Chancellor sounded a bullish note, insisting that the government is ready to go back to work after the summer recess and will be stepping on the accelerator towards economic growth.
“This government means business and we come back this autumn from the Olympics and Paralympics absolutely determined to overcome the challenges,” he said, attempting to draw parallels between Team GB’s exploits in east London and Team Coalition’s assault on the economy.
But how much impact can ministers really have to improve the economic outlook in the coming weeks?
After all, Parliament is only in session for a shade over two weeks before we hit conference season, and then won’t return until mid-October. By then, all attention in the Treasury will be firmly focused on the Autumn Statement, meaning any new measures are unlikely to come out of government until then.
That goes too for the PFI review, with ministers unlikely to be ready to sign off on the scheme over the next two weeks.
All in all, then, Osborne’s comments that it is back to work ring a little hollow – as do the pronouncements on new infrastructure plans and going for growth. Over the past few years, we have heard plenty of comments from government ministers on the importance of infrastructure and their plans to put it at the heart of the growth agenda. But we’re still waiting to see any significant movement that will kick the economy into life.
It’s possible – though by no means assured – that the UK Guarantees scheme will have some positive impact in the short-term and get shovels in the ground quicker than they otherwise would have been.
But we won’t know what impact the scheme will have until early next year at the earliest.
When Osborne talks of the government “upping the tempo”, he is probably talking about the tempo within the Westminster village, which appears to work on a rather different time zone to the rest of the country, where projects are needed now.