Azara Blog: Cameron has no clue about economics

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Date published: 2010/10/26

The BBC says:

David Cameron has promised a "forensic, relentless approach" to ensuring the UK's future economic growth.

The government would offer help to ensure new companies can prosper, the prime minister told the CBI conference.
The government argues that, while 490,000 public sector positions are forecast to close as public spending is cut, new jobs will be created by the private sector.
The prime minister said the UK had sometimes been "complacent about our competitive advantages", whereas the coalition wanted a change in attitude.

He told business leaders a "forensic, relentless focus on growth is what you will get from the government".

Unveiling what he said was the UK's "first-ever national infrastructure plan", Mr Cameron said countries such as China had been investing massively in new roads and rail links while the UK had "stood still".

"Even in this very constrained time, we will invest over £30bn in transport projects over the next four years," the prime minister said, adding that he wanted government action to help "unlock" £200bn in total public and private sector investment in transport, energy, telecommunications and other critical sectors.

CBI director general Richard Lambert said Mr Cameron showed an understanding "that only business will create growth".

Cameron was speaking to the CBI so was bound to say things the CBI wanted to hear. But most of it is ridiculous. First of all, the government has no plausible reason why the private sector will magically pony up 500k jobs, especially given that the government has massively reduced demand by sacking 500k people.

And while China might be "investing massively in new roads and rail links" it is trivially obvious that not only has the UK not done this but under Cameron the UK will continue not to do this. Indeed, most new road projects (e.g. the A14 upgrade) have been stopped. And 30 billion pounds is peanuts, and what is not being spent on maintenance and the odd road project, will mostly be wasted on glamorous rail projects, for example Crossrail. Basically, Cameron is taking the piss on the transport front. And the rest of his blurb is not much better.

And Lambert is just being plainly ridiculous to claim that "only business will create growth". There are many examples, including university science research, where it is government that is (indirectly) creating growth. The CBI just represents big business, it does not represent reality.

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