A New Economic Model: Part 1

A New Economic Model: Eight Benchmarks for Britain.

Wow, something from the Conservatives to challenge Marx, Keynes, Friedman? No. Not a new economic theory, nor a new economic model, just Osborne's plan if he gets into the Treasury. The Conservative policy makers like to play with words, and they are definitely having fun with this title.

A "benchmark" gives you an impression of a horny-handed artisan crafting an exquisite and intricate item and placing it on the work bench in front of him while his apprentices look in awe and with ambition: they know that if they too can create such a beautiful item, showing that they too have such skill, they will become an artisan. So Osborne has presented eight benchmarks that show the skill and imagination of a Tory government? Something that future governments can use to compare their effectiveness? No. Unfortunately this 24 page document is merely a series of platitudes and aspirations. The "benchmarks" simply list the aspirations that Osborne has for the economy.

Before we examine the "henchmarks" we first have to cover what a "benchmark" is.

0 Benchmarks?

bench·mark (bench'märk) n.

1. A standard by which something can be measured or judged

To be judged by a benchmark there has to be some metrics. This means that Osborne's "benchmarks" must have a series of figures (dare I say, targets?) and a series of deadlines for when those achievements have occurred: "By 2012 the national debt will be…" You would expect lines in the sand. You would also expect some penalties (what is the use of a benchmark if there is no penalty?), for example: "The Chancellor will resign if benchmark x, y, or z is missed; we will call an election if benchmark a, b or c is missed." Indeed, George Osborne agrees on this point, he says:

"And for the first time, the British people will have eight clear and transparent benchmarks – Benchmarks for Britain – against which they can judge the success or failure of their Chancellor and their government over the next Parliament. We will be accountable."

So how will you be accountable, Mr Osborne? Oh yes, I know, we get one chance, once every five years to express our opinion. So that is the same as at the moment, right? If Osborne is claiming that he will be more accountable he has to outline how he will be called to account. Yet again, he fails to produce anything new.

Here is the list of "benchmarks":

1 Ensure macroeconomic stability
2 Create a more balanced economy
3 Get Britain working
4 Make Britain open for business
5 Ensure the whole country shares in rising prosperity
6 Reform public services to deliver better value for money
7 Create a safer banking system that serves the needs of the economy
8 Build a greener economy

Well, they are not particularly catchy are they? If I was to create a list of benchmarks I would make each one simple, with a metric and deadline. Curiously, the Conservative policy document on health outcomes shows how to do this properly, for example here are three:

Five-year survival rates for cancer in excess of EU averages by 2015
Premature mortality from stroke and heart disease below EU averages by 2015
Premature mortality from lung disease below EU averages by 2020

These are benchmarks, you know when you have achieved them, you know when you have failed. Osborne's list are not benchmarks, they are merely a series of economic policies. It appears to me that one group of policy writers created the bulk of the document and then the PR department looked at the rather dull paper and thought "how can we make this a bit more exciting?" and bolted-on the concept of "benchmark". The concept is inappropriate, of course, but the word is catchy and it gets headlines, and that is all that the document needs to do. These eight are not benchmarks, they are not lines in the sand, they are simply platitudes.

In the following blog posts I will go through the eight and examine each one in more detail, to see what the benchmark is, how it is measured and what the penalty for failure will be. Don't get too excited because as I will show, much of the document is a list of policies already announced by the Conservatives, reassertions of existing Government policy and some unobtainable aspirations added simply to bulk out the document.