Next week’s Autumn statement by the Chancellor – and announcement of his growth strategy – is growing in importance almost by the day. At the beginning of the year, it was just going to be a fairly run-of-the-mill attempt to get the economy to accelerate faster out of a recession that had ended. Now, it has turned into a question of saving the UK from being engulfed in Europe’s financial collapse: the fate of the nation depends on it. For many outside government – including MPs and commentators – it has also become a critical test of the coalition, and whether it can deliver. It will be critical to the public deciding whether this unusual two-headed government is a success or not. Matthew Parris – followed as so often by others – said recently that the prime minister (and the Conservatives more generally) are at a tipping point, where the public make up their mind about what they actually think about him – is he a deliverer or ditherer – and they will then hold that view from then on. The huge anticipation and timing of the growth strategy, and the enormous coverage it is bound to get, is likely to mean it is instrumental in helping form this public view. For the Chancellor himself, it will be the most important performance of his career. It was thought until recently that the debt reduction strategy would be the thing that defines the Chancellor – the success of that is what he would be forever remembered by, and judged against. But the growth strategy has now overtaken the debt reduction strategy in importance, in the eyes of the media and other politicians. As a political journalists I always resisted the endless fatuous claims that this budget or that by-election were the most important ever, so I don’t indulge in this thinking lightly. But it is quite likely that the growth strategy next week – and whether it is seen as a success or not – will define the future of the government, the prime minister and the chancellor. It might also save the country. So there’s no pressure, George!
Speculation and commentary in the run-up to the Autumn statement has become almost an industry in itself. Almost every business group and economist has made their own suggestions of what should be done, and ConservativeHome and others are also pushing ideas. When it comes to proposals for boosting growth, we really are all in this together. The will-they-won’t-they battles in government – such as the scrapping many employment rights – has provided a continuous stream of newspaper stories. The communications plan up to the statements is already seeing a steady stream of government announcements – such as the PMs and deputy PM’s launch of government-backed mortgages, and Vince Cable’s proposed reforms to employment protection. Most cabinet ministers fed in ideas, and it seems many are getting their own growth-strategy launches. The really big ideas are being agreed by “the quad” of David Cameron, Nick Clegg, George Osborne and Danny Alexander.
But there is a tangible sense of unease among Conservative MPs, and many commentators, about the growth strategy – that it won’t really amount to much. They fear that when the Chancellor unveils it, the nation will go “is that it?”, like the curtain revealing the puny form of the wizard of Oz. At the heart of the unease – which many MPs have raised with me in recent days – is concern that while the coalition is capable of delivering a debt reduction strategy, it can’t deliver a real growth strategy, for the simple reason is that they just disagree on too much. Radical plans to cut taxes (including most controversially the 50p) and have a bonfire of health and safety and employment rules are bitterly – and often publically – opposed by Liberal Democrats. Rather than cutting red tape and taxes, the Lib Dems seem a lot more interested in boosting subsidies and spending, with Nick Clegg championing his regional growth fund and the government support for housebuilding. In despair, one MP described it as the “pushmi-pullyu” government, comparing it to Dr Dolittle’s two headed horse, which because it is pulling in both directions at once ends up going nowhere. Several senior economists have made similar complaints about the government.
As someone who suffers from optimism bias, I shrug off such gloom ahead of the announcement. But it really is not an exaggeration to say that the fate of the UK economy, the government, the reputation of prime minister and chancellor depend on the Chancellor pulling some big bunnies out of the hat. As I say, no pressure, George.