New growth strategy demanded
Pressure is mounting on the government to provide an elaborate strategy for growth ahead of next month’s Budget.
The centre-left Institute for Public Policy Research (IPPR) thinktank made a significant call for an economic ‘plan B’ prior to an expected slump in growth forecasts today.
The slump provides more ammunition for demands that the government rethink or adjust its economic plan.
IPPR argued that chancellor George Osborne should pay particular attention to growth in the budget.
The thinktank said there should be a drive to increase investment levels, a focus on skills, support for innovation beyond tax incentives, devolution of policy levels and a rethinking of Britain’s monetary rules.
Tony Dolphin, IPPR senior economist, said the chancellor needed a new growth strategy.
“So far, the focus has been on taking short cuts to growth through spending cuts, cuts in corporation tax and cuts in regulation. But the lack of growth in the economy suggests this plan is not working,” he said.
Mr Dolphin called for an increased government role in promoting investment and a focus on regional development.
“What’s needed is a ‘plan B’ that takes the high road to growth, with an active, strategic role for government in promoting investment, innovation and job creation,” he added.
“The economic recovery will not be led by the financial sector alone and there needs to be a much greater focus on regional development to support enterprise which creates jobs outside the capital.”
The government came under fire last month for not promoting enough growth. Former CBI chief Richard Lambert criticised the coalition for failing to provide a “vision” for the direction of the economy.
IPPR, the Left Foot Forward blog, and the Friedrich Ebert Foundation are set to publish a collection of essays on Monday expanding upon their preferred growth strategy.
