Letters from Lord Sassoon, Andy Burnham and Paul Romer, among othersby Prospect / March 23, 2011 / Leave a comment
Published in April 2011 issue of Prospect Magazine
ENGINE FOR GROWTH
Alistair Darling’s critique of the government’s economic policy (March) is misguided. A year ago, Britain’s AAA credit rating was under threat because of Labour’s economic mismanagement. As Lord Myners put it last August: “the mistake we made as a government was to run large deficits in the middle part of the decade when the economy was clearly running at full capacity.”
George Osborne had no choice but to come up with a comprehensive deficit reduction plan—not to merely halve the deficit over four years, but eliminate it. The government has also set up the office for budget responsibility, to ensure we have independent economic forecasts. This has secured the UK’s AAA credit rating, while the Bank of England has kept interest rates low. These are the prerequisites for sustainable growth.
But we must go further. This is why corporation tax is coming down; why we have substantially reversed Mr Darling’s proposed jobs tax; why we have reduced the burden of unnecessary regulation; why David Cameron is promoting British business around the world; and why the chancellor’s latest budget is strongly pro-growth.
Darling takes far too pessimistic a view of the private sector’s capacity to grow. Between 1992 and 1998, total employment rose by 1.3m while government employment contracted by 0.5m. The recovery is likely to be choppy, but we are committed to making it possible for the private sector to again be the engine of British growth.
Commercial secretary to the Treasury
NOT THE HEIRS TO BLAIR
James Purnell (March) is right to warn Labour of the dangers in appearing opposed to public service reform, or of returning to a comfort zone. But the expensive reorganisation of the NHS and Michael Gove’s free schools programme are not a continuation of Labour’s successful approach; they are a fundamental break with it.
Take Labour’s academy programme: a pragmatic approach to raising standards in areas of educational under-performance. By contrast, Michael Gove’s academy and free school programme is ideological. He has no clear plan for raising standards. Allowing new schools to open anywhere, in converted buildings with unqualified teachers and no regard to national pay agreements, could destabilise existing provision. It also can’t be right that the government is showering what little capital funding it has on a small number of favoured schools.