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And I thought it was about the economy

Jeegar Kakkad April 26, 2010 15:56

Back at the start of the year, we said the election was worrying the markets. That's no longer true.

It's the politicians that are worrying the markets.

While the politicians are increasingly talking about politics, the economy - and questions on how to repair the public finances and generate balanced growth - is simply forgotten as political posturing heats up in advance of a hung parliament.

While we have seen little in the way of detail about how the main parties would repair the public finances, we’ve seen even less on how they would rebalance our economy towards higher investment and increased net exports.

Coming out of the recession, there has been a lot of noise about the importance of manufacturing to our economy. But so far, the election has only focused on the public finances half of the economic equation. Economic growth and the role of manufacturing have unfortunately taken a back seat.

What our economy needs is an honest debate on the wisdom of ring-fencing spending budgets at the expense of economically damaging cuts in capital spending.

We should be talking about the details of fundamental tax reforms – including a VAT raise – that boost revenues and encourage capital investment and business growth.

And we need to see real details on how more productive government spending and targeted investment could boost manufacturing growth, even as we scale back the public sector.

The shift to a better, more balanced economy will require the next government to think and act differently. And with less than ten days left before the general election, the political parties need to refocus on rebalancing or risk repeating the follies of the past 30 years.

 

Disclaimer
This is an informal blog about manufacturing and the economy written by EEF's policy and representation staff. While it is written from an EEF perspective, contributions should not be taken as formal statements of EEF policy, unless stated otherwise. Nor does it cover all the issues on which we campaign - you can check these out in more detail at our main site.

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