Cuts & Growth

I’ve recently published an article on Conservative Home that focuses on the need for ‘early and greater’ intervention to help restore the UK’s public finances back to health – you can read the article here. I've made the following case:

• An ‘early and greater’ approach to fiscal consolidation is needed to restore the public finances back to health.

• We should adopt a two-pronged approach: re-focusing public spending towards frontline public services; and applying the concept of GDP-targeting to public spending, while redefining the provision of welfare support.

• This approach should help to manage risks both to the process of economic recovery and the UK’s sovereign debt rating.

The context for this approach lies in the hardening of sovereign risk around the UK’s public debt burden, which has attracted increasingly critical comments in recent weeks (see articles here and here).

In thinking how we can rejeuvante our national economy, it’s worth considering the case of the West Midlands. A recent FT article (see here) has highlighted that the UK economy grew more slowly in each year of the last decade than any other decade since the war. The FT’s analysis has showed that average annual GDP growth in the West Midlands nearly halved from 2% in the 1990s to 1.1% in the last decade. Why should this matter? In many ways the West Midlands serves as the engine-room for the UK, with a range of activity across the agriculture, manufacturing and services industries and will provide the litmus test for a future Conservative Government – in other words, we will need to get it right here if we are going to get it right across the wider country.

I’ll be focusing on this theme in another article, thinking how the ‘Cuts & Growth‘ debate might impact on areas such as South Staffordshire and Worcestershire. This is clearly going to be a year of challenges for our country as a whole and for communities such as those in the West Midlands.