Further to Andy Haldane’s piece “The unpleasant fiscal arithmetic holding back UK growth” (Opinion, FT Weekend, October 12), I suspect that merely changing the definition of the UK’s debt headroom, to permit further borrowing for investment, will not suffice to enhance the country’s growth rate or deal with the chronic lack of productivity.
Leaving aside the difficulties of reforming our complex planning system — much discussed elsewhere — one of the major problems facing successive governments, though less acknowledged, lies within the Treasury itself. So long considered a “super ministry”, the Treasury has become almost entirely focused on short-term revenue raising, cash flow and debt management. In other words, acting purely as a finance ministry. This has become embedded in the culture and has often resulted in a brake on government growth initiatives.
Surely now is the time to create a parallel economics ministry with a clear mandate to promote policies for growth over the medium to long term. Indeed, the current government could do worse than simply repurposing the existing Department for Business and Trade, imbued as it already is with some excellent civil servants and thinkers in this space.
But such a department crucially needs stature — in a 21st century world surely the relevant secretary of state should be regarded as holding one of the “great offices of state”. The Harrington Review of Foreign Direct Investment, to which I contributed in a very minor way, made some excellent recommendations, but creating a cabinet-level committee to focus on growth and investment is not, I fear, going to be sufficient. The issue of low growth and the reward for changing our trajectory is so significant that surely it warrants an entire ministry devoted to solving the problems and realising the UK’s untapped potential?
Stephen Hill
Former Lead Non-Executive Board Member, UK Department for Business and Trade, Jersey, The Channel Islands
You must be logged in to post a comment Login