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George Osborne: Where are those green shoots?

It wouldn't be allowed: this has been rated on good authority as one of the two most depressing sentences to be heard in British boardrooms. The other is: why doesn't the government do something about it?       

They must now be depressing George Osborne. The green shoots of economic recovery have started to shrivel — always an awkward moment for a Conservative chancellor, and awkwardly timed for the party conference season.  Worse still, the conventional fertilisers are out of stock. However much he might want to boost demand in the economy, he has no scope for borrowing and spending more money, nor can Bank rate, now at its lowest for 317 years, be usefully cut any further.

Still, if demand must be left to take care of itself, there is always the supply side. (Margaret Thatcher popularised the phrase but could never improve on it.) Ministers can try to make the economy work better, either by getting involved in more detail — intervening before breakfast, as Michael Heseltine preferred — or, on the contrary, by enabling the markets to work by removing the obstacles to competition and choice.  

Intervening is always popular, at least to start with. It shows that the government is doing something. But many of the obstacles began as interventions. They are easier to install than to remove and some will finish up as focal points of resistance, making life more difficult for the government as the Chancellor and his colleagues are finding out.

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Damian Hockney
October 31st, 2011
1:10 PM
A superb commentary which just about covers every aspect of what is wrong in this area. And of course there is so little will in government to get out of the way, because every force is pulling in the opposite direction.

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