Businesses welcome Reeves’ growth agenda but what about the public?
Rachel Reeves is talking a good game on growth, but Labour won’t be rewarded at the ballot box unless they can help ordinary people to feel better off, says Theresa Bischof
Growth is in. And so too, is business apparently. Last week, Rachel Reeves and her growth brigade took a trip to Siemens in Witney to set out her economic vision. Business groups have welcomed her announcements with a big smile, but what about the public?
Admittedly, Reeves is facing an uphill battle when it comes to getting voters on board with her growth mission. That’s true for a number of reasons: over past years, trust in politicians has been corroded in a dramatic fashion. What’s more, there’s a strong feeling amongst the public that growth is something that benefits others – think back to the infamous heckler that bluntly exclaimed “that’s your bloody GDP, not mine”, during the EU referendum. They had a point – and it’s one that continues to haunt governments hellbent on delivering growth.
Growth that doesn’t feed through to people simply doesn’t cut the mustard. It’s what we call the growth gap: the difference between how politicians and voters think and talk about growth. As we’ve seen in the US, that gap can have fatal consequences. Despite good economic results, the Democrats failed to garner support at the ballot box.
Here in the UK, we risk getting stuck on that very same slippery slope. Indeed, the government faces a twin challenge: it needs to create growth in the first place, and make sure that it genuinely leaves voters feeling better off. The urgency is real – with only one in four voters supportive of Labour’s plan for the economy, according to the Good Growth Foundation’s first report.
How to talk about growth
Now, since doom and gloom is out, let’s get to the positives. The government has already shifted the way it talks about growth, away from “the fastest growth in the G7”, towards improved living standards. We’re getting closer to talking about growth in a way that resonates with voters. But those words need to be backed by action – and the public is desperate to feel a tangible difference as the cost of living crisis continues to ravage pockets across the UK. The Chancellor has a real opportunity to turn around public sentiment, by focusing on policies that put people first. That means investing in better mental and physical healthcare, fewer potholes and better transport links, and opportunity in the form of skills and training.
Asset managers don’t have a vote
These areas were by far the most popular in our research – trailed by housebuilding and clean energy. People just can’t relate to the latter. They have seen new houses go up – but mostly from the outside looking in as many still struggle to get on the housing ladder in the first place. They have seen a focus on clear energy – but they have been hit by rising energy bills that have made it harder to sustain their livelihoods. There’s no doubt that delivering on housing and clean energy has its benefits. But the government has to join the policy up to people’s lives – making clear in no uncertain terms, how they will lower the cost of living. People want an active and stable government that is prepared to invest in ordinary people. After all, our research shows that the public think it’s “ordinary people”, not governments or businesses, that deliver growth.
Of course, Reeves is right to focus on business. Reviving that honeymoon period is crucial to get investment flowing across the UK. But asset management firms don’t have a vote. And growth that won’t benefit the people – growth that makes people feel even more isolated from the economy – has the potential to spell electoral disaster.
Theresa Bischof is head of campaigns at the Good Growth Foundation