Last year there was a golden summer for Great Britain. Team GB hauled in a record 29 Olympic gold medals at London 2012, more than every nation except China and the USA. But as with all collective successes, it took some investment. The major funding body for the Olympics, UK Sport, spent £264m on the Games, an increase of £30m on Beijing 2008.
The Olympics moment has confirmed what I’ve always believed: you gain success on the back of investment. Yet our current government doesn’t seem to share that thinking. Even worse, they’ve seen no hypocrisy in applauding the country’s golden investments whilst driving the rest of the country down a path of cuts and austerity. Sport might very well deserve millions of pounds. But what of the nurses, teachers, home builders and child carers who are losing their jobs under this government’s axe?
The Coalition has shown no stomach for the tough decisions required to win back jobs and kick-start the economy. Currently the UK is the only G8 country without a body helping lend to small- and medium-sized enterprises – businesses like the one I’ve run for the past ten years. SMEs should be the engine of growth. We are the backbone of the productive economy, consisting of small shops on the high street, new entrepreneurs, and start-ups looking to change the world.
Businesses know all too well how the anaemic economies in Britain and Europe and new, tough banking regulations have led bankers to scale back loans and tighten their lending criteria. Yet the Government has continued to drag its feet on a British Investment Bank. In addition, its major policy response, the £80bn Funding for Lending scheme, has no assurance of success. Andrew Montlake, director of mortgage broker Coreco, has pointed out that there is no incentive for banks to target the money at those borrowers who aren’t already well catered for.
A British Investment Bank would be a good start. But there is so much more we could be doing as well. Infrastructure spending must be ramped up and put to work on sensible projects that will create good-paying jobs to be spent in local economies. Tramlinks, cycling lanes, improved tube and bus systems and repairs to our aging bridges and roads are desperately needed.
Investments in our depleted social housing stock must also be made. With over five million currently stuck on waiting lists, a serious investment in home building would remedy an urgent crisis whilst putting people to work and therefore stimulating demand into the economy. It’s a sensible approach that could be funded in part by asking more, not less, of those who were formerly in the 50p tax rate.
In the longer-term, the foundation for a strong economy must be built. That means getting every student the education they need to compete in a global economy. All graduates should have IT and science skills, and those who are not driven towards an academic path must receive better training. We should build on the positive legacy of Sure Start, and look towards countries that have a high female labour participation rate and very low child poverty. All the evidence shows that quality early years education is the best bet against a life of poverty and criminality.
Those who led the UK to teeter on the edge of a triple-dip recession would argue that there’s no money. They argue that spending money now will transform the UK into Greece. But that’s fiction. Since the UK continues to control its own currency, the economic reality is that we are graced with significant latitude to invest smartly and grow our way to economic recovery. There may be disagreements about how money should be spent, but in the current economic landscape there should be a cross-party consensus to invest. And we must do so before Britain experiences a lost decade, like Japan in the 1990s, which left a lost generation of young people in its wake.
Last summer, Britain remembered how good it feels to compete hard and win. But the underlying lesson of how we got there – through investments – has barely made a dent in the current government’s economic thinking. Perhaps they need something to focus their minds on. In that spirit, might I recommend a Jobs Olympics? Imagine if in 2022, the world’s politicians gathered in London to compare their efforts of the past decade – not just on growth, but in terms of building an economy that works for all. Which countries would medal at having a sustainable economy, one with a spirit of entrepreneurship and plenty of good-paying jobs? Would we be able to say that Britain’s economy stood out, in the same way its athletes did a decade before? Or would we be hanging our heads with shame at the bottom of the standings?
The next general election will prove a decisive moment. With the current government unwilling to invest in our future, Labour must be ready to come in and start investing in Britain again.
Prem Goyal is vice-chair of Bermondsey and Old Southwark Labour party