All governments are tempted to chase short-term headlines for political gain, by tinkering with the economy, without taking the hard decisions needed for the long-term. During times of prosperity, that is an easy option. Labour’s largesse extended to creating public sector jobs and creating a bewildering system of benefits, credits and one-off payments. In an age of austerity, it is even more tempting to make the headline-grabbing gesture in an attempt to receive support and a positive front-page.
This Government has altered that normal course of political life, by remaining resolute to the Chancellor’s deficit reduction plan. That is an important part of a long-term route towards a new era of prosperity. The peril of pursuing an “easy” target for short-term growth is that it ignores the fundamental problems of our economy.
A vital piece of work undertaken in opposition by Messrs’ Cameron, Letwin, Maude and Osborne, was taking the time to review and understand the interlinked nature of different government departments. It was an acknowledgement that an action taken in one department can affect the whole of government. That work means that ministers now recognise there is no “silver-bullet” that will solve all our economic woes. There is a determination to stick to a longer-term plan for our economy and that includes pushing ahead with important reforms across many departments.
Let me highlight the work of three departments that has the potential to transform our economic prospects over the next few decades.
Local government: The Localism Act is one of the largest pieces of legislation that this Parliament will implement. That is unsurprising. It fundamentally redefines the delivery of local services and gives communities real powers, allowing them to transform their neighbourhoods. It sets out the basis for planning reform that will allow nationally important infrastructure projects to proceed more quickly than before and encourage house building where there is a need, rather than by Whitehall decree. That reform will provide a kick-start for our construction industry leading to real growth.
Education and skills: School and training reforms will lead a generational change in the economy, by teaching the basic skills that too many students lack. In a recent radio discussion, on youth unemployment, I heard an employer bemoan the numerous application forms he receives littered with basic grammatical errors and spelling mistakes. That is a symptom of a haphazard and sloppy approach to teaching over the last decade. The creation of new Free Schools is an ideal way of introducing innovation in to the system.
Engineering companies, in my own constituency, benefitting from a growing energy sector are unable to fill jobs from the local labour market because of a lack of skills. We need greater educational flexibility attuned to local needs. John Hayes is leading a renaissance in apprenticeships; displaying that ministers understand a vocational education is as valuable for the economy as a university education.
Health: With so much of the national budget dedicated to the National Health Service, reforms that direct spending to front line health care, whilst reducing bureaucracy are vital. There is no point in ignoring the symptoms now that will require surgery that is even more radical in a decade or two, if left untreated. A reformed NHS has the added bonus of improving the economy; a healthier nation means a healthier workforce and a more productive country. A healthier nation need less support from the state through the benefit system that is why a greater emphasis on public health is an important component of the Government’s health strategy. Ministers seem ready for the long haul on NHS reform, as they take on the vested interests and medical establishment, that portray any reform as an attack on hardworking doctors and nurses and the end of free universal healthcare.
These are only a few examples of how departmental action, outside the Treasury, also has an impact on economic growth. Other cross-departmental initiatives are the creation of Enterprise Zones, the establishment of Local Enterprise Partnerships that are business-led rather than managed by the civil service and support for super-fast broadband.
Often, when we discuss the economy, and growth, the focus is on the Treasury in isolation. In reality, that is not the case – government is a more complicated jigsaw of influences. On entering government, we worked hard to piece these different elements together. The groundwork, quietly undertaken in opposition, is paying dividends, allowing the Government to move rapidly on a wide range of issues. It is a different approach to the Labour Government, which did so little for so long. We need that different approach to give our country a more productive future along with sustainable growth.