A New Economic Model: Part 4

(Graphic: Left Foot Forward)


A New Economic Model: Eight Benchmarks for Britain.

This is my analysis of George Osborne's economic policy should the Conservatives win the next election.

3 Get Britain working

Conservatives, reduce unemployment? Is this a dream? The fact is that the Conservatives record on unemployment is not very good. They get into power, they cut whatever they can and then unemployment goes up. Conservative policies rely on cheap labour and the only way to guarantee cheap labour is to increase unemployment. The problem, of course, is that the electorate do not like unemployment, hence the reason why Osborne is repeating their 1979 election campaign that "Labour Isn't Working". After the Conservative victory in 1979 unemployment shot up, so it is a warning to us all: don't believe a Tory about unemployment. The graphic above (from Left Foot Forward) shows what a recession under Conservative rule means. For the current recession unemployment returned to the level before the recession after seven quarters, for the Thatcher recession it took 21 months. Who knows what heights unemployment will go to, or when it would fall back to the current level during a Cameron recession.

The details:

"We will reduce youth unemployment and reduce the number of children in workless households as a key part of our strategy for tackling poverty and inequality."

Of course, this is government policy already, so yet again the Conservatives are saying they will continue with the Labour policy while making cuts.

"[Removal of the planned rise in] employer and employee National Insurance by 1% in 2011."

"Any new business started in the first two years of a Conservative Government will pay no EmployerNational Insurance on the first ten employees it hires during its first year."

"We will work to reduce the very high marginal tax rates faced by many people on low incomes who want to return to work or increase their earnings."

No one likes tax rises, but to avoid swingeing cuts the only possibility is that taxes have to rise. Cuts in taxes (or removing rises) have to be costed and the money found from elsewhere, and yet there are no concrete plans about what will fund these tax cuts.

The other details of this "benchmark" are to create training places (Labour has already pledged training for all young people); a vague and curious pledge to "set further education free… where government funding follows the learner" which sounds suspiciously like a pledge to privatise higher education and a pledge to "build a network of business mentors" which is uncosted and has no benchmarked figures and no indication of any possibility of sucess.

The verdict:

Other than the figures of the number of training places (which are less than Labour will create) and pledges to cut some taxes and not to implement other taxes, there are no real benchmarking figures here and no mention of what will happen if the benchmarks are not achieved. Again, this is not a benchmark.