We are in danger of playing into Tory hands on growth

Since 2008 the Conservative Party has used the cover of the deficit to attack state provision of services. In 2011 we see the beginning stages of a strategy to use the cover of sluggish growth to attack state regulation and employment protection. We lost the battle to define the deficit. We cannot afford to lose the battle on economic growth.

Growth is the only game in town in British politics. The Tories, wary of the poor performance in the economy that their cuts have caused, realise that getting Britain growing is the only way for them to win in 2015. Labour’s Ed Balls seems ebulliently cheered by poor figures and has set out a “five point plan” for growth. The focus on overall growth in GDP is all consuming and overwhelming.

But what kind of growth? By setting a single data-point as the total focus of analysis and debate in British politics we are in danger of playing into Tory hands. Growth overall is not the same as growth for all. By blaming employment regulation for “strangling” economic growth the Conservatives believe they can manipulate the debate to focus on the ‘luxuries’ afforded to workers – instead of focusing on the lack of demand caused by their own cuts.

The Government’s growth review reiterates that for growth to be achieved there is a need to “stop to the tide of regulation” hitting British companies. Already this agenda is accelerating at pace. From April, an employee will only be entitled to legal protection at work if they have been employed for two years, rather than one. From 2013 workers will have to pay an eye watering fee to have their case heard at all. Watch Matthew Hancock on the Daily Politics attempt to argue that these changes will increase prosperity. The case is logically incoherent. The idea that a lack of supply of labour is holding back growth is bizarre. Millions are unemployed. Yet the malignant contentions that it is the regulations that protect the vulnerable that are holding back growth persist. In 2007 David Cameron said that leaving the EU social chapter was a “top priority”. In 2011 he needs to pacify angry Eurosceptic backbenchers. In the same way that the Tories have attacked public provision of essential services under the cover of the reducing the deficit- they are coming for our employment protections under the cover of increasing economic growth.

Labour must be clearer. Growth is a means to an end, not an end in itself. We need growth for ordinary, working families; not for the richest 1%. The next election will be won by whichever party can position itself as capable of increasing average family’s fortunes. There is no bigger indictment of Labour’s last term in office than the fact that after 2007 middle income families suffered real terms losses in their incomes. The acceleration of this trend under the Conservatives, with real wages having fallen by 5% over two years, only increases the need for Labour to have a real policies on real growth for those who need it.

Measures that tinker around the edges like Ed Ball’s proposal to reduce VAT to 5% on home improvements will not cut the mustard. We need a radical agenda on growth for all. If Labour can’t articulate a coherent message on what sort of growth we’d like to see, the Tories will frame the debate for us instead.