Parliament may be in recess for the summer, but all of the parties are hard at work developing their offer to the voters for the coming election. The Government hope that green shoots of economic recovery will soon appear but actually the grim economic news keeps on coming which is shaping the offer to voters. Any snippet of better than expected figures are seized upon but the longer term view suggests little room for optimism.
Growth is flat and forecast to barely increase next year. National debt is currently the equivalent of annual GDP and the Government is paying more each year to service debt than it spends on education. Interest rates are higher because Prime Minister Truss crashed the economy which led to higher mortgages and taxes are going up, as last week’s alcohol duty hike shows. All that means whichever party forms the next Government there’s little room for manoeuvre. Liz Truss showed what happens when Governments make unfunded commitments which rules out any unaffordable wish list.
It also underlines the importance of higher and sustained growth, without which broken public services will not be fixed. Nor can they be fixed without reform such as shifting healthcare to a more preventative approach or shifting to a green energy policy which will reduce bills and give back control over our energy security.
This analysis may seem as gloomy as this summers weather but it doesn’t rule out being ambitious. On the contrary hope depends on ambition, provided it is built on the rock of serious and responsible economic policy.