The royal family has been accused of a great number of things, from extravagance to vulgarity. But to blame the Duke and Duchess of Cambridge for limiting UK economic growth in the second quarter to 0.2 per cent — as the Office of National Statistics did this week — is a bit rich. If an extra day’s holiday for the royal wedding in April closed our offices and factories, it surely boosted the tourist industry and sent bone china manufacturers into overdrive.
George Osborne would be ill-advised to bring up the subject of the royal wedding or any of the other excuses given by the ONS for the sluggishness of the economy: the Japanese tsunami, the warm spring weather and consumers — allegedly — drawing in their horns in order to save money for Olympic tickets. Our national statisticians are behaving like the board of a failing company which will resort to any old excuse to try to justify its bonuses in the face of bad results.
What the ONS has failed to mention in its analysis of economic growth, on the other hand, is the slow progression of the government’s pro-business agenda. How much greater might economic growth have been had Whitehall stuck to last year’s coalition agreement? We were told that it would be possible to set up a business ‘with one click’. The public was to be given a chance to nominate unpopular laws for abolition, and a ‘one in, one out’ rule was to balance any new law with the repeal of an existing law. The reality is a long way short of matching the promise.
Nothing has been done to repeal Labour’s mountain of employment law. Public sector bodies this year will be forced to spend £30 million complying with the duty — enshrined in the new Equality Act — to conduct ‘equality audits’ of their staff. Far from repealing this, the equalities minister, Lynn Featherstone, has threatened to extend the duty to private companies. Moreover, businesses find themselves on the receiving end of new and expanding ‘green’ taxes, many of which have been imposed as a result of Britain’s unilateral commitment to cut carbon emissions by 80 per cent by 2050.
The government has spoken often of the need to rebalance the economy through cultivating manufacturing, yet the EU emissions trading scheme encourages companies to cash in on the carbon credits by closing down British factories and reopening them in Asia, where no credits are required. There is an incoherence throughout this government, where it seems that those calling for deregulation and growth are outnumbered by ministers with pet projects they wish to foist on society. This was the problem in the Labour years. It is a malaise which afflicts this coalition, too.
The economy needs someone who speaks for business. Instead it has Vince Cable, perhaps the only Business Secretary in the free world who denounces capitalism. George Osborne is said to be too busy doing the job of a deputy Prime Minister. But we need a full-time Chancellor focused on a growth agenda. A look around the eurozone shows what happens to countries with huge deficits which fail to encourage economic growth.
Compared with the gentle diversion of the royal wedding, excessive regulation is a serious impediment to economic growth. We live in an era in which countries have to compete for businesses. It is time this government realised as much.
Our winning side
Thank heavens for cricket. In a week full of economic gloom and horror, England’s team provided a much-needed moment of cheer on Monday as they beat India at Lord’s. The victory shows that the country’s cricketing fortunes — in contrast to our financial ones — are on the up. If England go on to win the series, against the world’s number one team, they can justifiably claim to be the greatest team on earth. (If they win by a two-Test margin, even the official league table will agree.)
Andrew Strauss, the captain, and his young team possess a rather un-English gift: the ability to win. Unlike many of their predecessors, players such as Stuart Broad and Matt Prior seem to perform best under pressure.
It’s silly to read too much into sporting triumphs. But they can offer consolation, and England’s cricketing success is a useful reminder that we aren’t rubbish at everything.
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