When the coalition government took power in 2010, Chancellor George Osborne made a fine speech about rebalancing the UK economy. It was time, he said, to move away from debt-fuelled consumer spending towards investment, exports and manufacturing. He proclaimed a ‘march of the makers’, helped by policies such as cutting corporation tax and cutting ‘red tape’. This was how the government was going to eliminate its budget deficit: economic growth due to a resurgence in production rather than consumption.
With the economy growing at a respectable 3% in 2014, has Osborne succeeded? Sadly no. Growth has returned, but it is the traditional British type of growth.Manufacturing has yet to recover from the recession, exports are weak and company investment is recovering slowly from a huge fall.
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