Should growth really ‘trump everything’?

AS TAPAS has already noted in earlier Editorial Opinions, the Government’s driving ambition to achieve economic growth is sweeping all else before it, or rather, in many respects, arguably sweeping other important things out of the way. This applies across its activities, including of course transport.

Once again this week, the Chancellor — at the helm of this over-riding mission, alongside the Prime Minister — has sought to ‘go further and faster’, both in some of the specifics of her economic development plans, and in the messaging to the markets and investors she wants to get on-side and to help fund the infrastructure plans that she sees as essential to facilitating the journey to higher economic growth. Underlying it there seems to be something of a driving anxiety to not miss out on a perceived technology-led ‘new industrial revolution’ now underway.

Whilst the supposed ‘go ahead’ to the third runway and further expansion at Heathrow Airport has grabbed the headlines, it might be seen as more symbolic than significant in its own right, given that formal parliamentary approval already exists for the project, and it isn’t a Government decision whether the runway will now be built, but one for the airport owners to activate, and fund. Nor is it a project that would deliver anything tangible in this government’s first term.

But this mood music from the Chancellor’s speech at a high tech health sector plant in Oxfordshire went further, with the messaging about delivering a so-called European Silicon Valley on the Oxford-Cambridge arc. This too, has been touted by previous governments and reflected in the plans to develop the East-West Rail link between the two cities, already well underway. What was new in the speech, was confirmation that proposals for New Towns along the new railway had been received ‘with 18 submissions for sizeable new developments’,and that development of the new mainline station at Tempsford — the nexus of the East Coast Mainline, the A1 and East West Rail — would be speeded up.

Elsewhere, the nod to other schemes seen as driving economic growth was given, a number of them involving transport-related access projects, which will now be fast-tracked. This is in line with the Government’s narrative that matters like planning approval and economic and environmental impact assessment are just irritating hurdles dismissively described as ‘red tape’ and simply opportunities for ‘blockers’, ‘naysayers’ and NIMBYs to stand in the way of progress. It is surely only a matter of time before the word ‘Luddite’ joins the lexicon for anyone not entirely happy with the plans.

To the Government, it seems that progress for the nation is inseparably embodied in achieving economic development, and as fast as possible. In that belief it aligns with the message being sent to global financial interests that Britain is a good place in which to invest, and that pretty well any ‘exciting new technology’ or ‘world -leading ‘enterprise will be welcome, and given a protected and supportive environment. Things like AI research and development sites, data centres, biotech and life-sciences all tick these boxes. The core message is that big and new are beautiful, international big-name companies are trophies to have, and their presence will ensure long-term prosperity for the UK economy. In alignment with this, most of what they ask for should therefore be granted.

Things they ask for- or perhaps just expect as indications of suitable government thinking- include airports, ports, roads, and other elements of transport delivering ‘connectivity’.

This agenda is therefore now the driving force of transport policy, where the script is being written in the Treasury and at numbers 10 and 11 Downing Street, rather than the Department for Transport, as clearly indicated in the Chancellor’s speech last week. Almost embarrassingly, working papers coming out from the Treasury and the Ministry of Housing, Communities and Local Government, led by the Deputy Prime Minister, are laying down all the significant elements of transport policy without any acknowledged involvement of the DfT or its Secretary of State in shaping it. It was the Chancellor who announced a go-ahead for Heathrow airport, for The Lower Thames Crossing (with a private finance deal to pay for it), for new housing and development principles around railway stations. Transport Secretary Heidi Alexander had merely a ceremonial role in subsequently confirming the Government’s plans for Heathrow in Parliament and a review of the Airports National Policy Statement, plus endorsing further efforts towards developing Sustainable Aviation Fuel to ameliorate the carbon impacts; though only with targets for SAF accounting for 10% of the fuel burnt in 2030 and 22% by 2040. Significantly, the Chancellor’s formal announcement of the Heathrow policy was simply dutifully re-stated in full in a DfT media communications post later on the same day.

Meanwhile moves to ‘streamline’ infrastructure decision-making and delivery in the cause of growth continue at pace with steps that will take teeth out of the established planning process, environmental assessment, mitigation requirements and the opportunity for legal review, not to mention removal of Parliamentary scrutiny. A flurry of working papers and consultation documents to this end fill our news pages in this issue. The lack of any mention of the supposed forthcoming Integrated National Transport Strategy in any of the documents from the Treasury, MHCLG and DEFRA is surely telling.

In particular, “Given the unprecedented pressure facing the infrastructure planning system”, the government says it is considering “a general process modification power to be used on a discretionary case-by-case basis”, which could mean the ability to disapply any rules at whim. An obvious totem of the Government’s thinking is to be the promised National Infrastructure Strategy Ten Year Plan that will ‘give certainty’ to investors, the construction industry, and supply chain, but little recognition, it seems, to the affected people, the environmental consequences, or even the views of local councils.

The shape of this policy has the Treasury mind and priorities written all over it. Has the government- even internally- subjected this ‘dash for growth’ to any real scrutiny? Who is asking the ‘what if’ and ‘ are we sure’ questions about the policy itself and the commitments it will involve? We have an Office for Budget Responsibility, but not one for Policy Risk and Unintended Consequences. With the forecasts of climate breakdown and its economic costs surging by 2050, the economy is not a self contained entity.

All of this therefore inevitably prompts the question of whether this Labour government is right to make achieving growth so central to its missions and, as the Chancellor has said, one that trumps all other considerations?

Wanting better economic growth can of course be justified as seeking improved living standards for UK citizens — although there is an important issue of the distribution of the benefits of that growth, and any adverse consequences which might be social and environmental as well as financial, and in the current era the impacts of massive technological upheaval in matters of technology - most specifically AI, and potentially in other dimensions yet to be identified.

Some might see this very zealous emphasis on growth as more akin to the agenda of the government’s political adversaries of a very different hue, reflecting Thatcherite and now Trumpist approaches to freeing the private sector from what they saw as the impediments of government and other constraints on markets.

A real issue meanwhile remains concerning whether the Government’s plans will really deliver the growth it wants, and the precise form of the impacts. Where will the benefits be, which people will gain, will there be casualties on the way as businesses seek to make profits and create value, rather than increase staffing or pay, how will externalities be controlled and will there be any way to secure re-investment rather than the export of value and rewards?.

Will there be equivalent investment in local facilities that make the daily lives of individuals better — for example in public transport and better urban realm and neighbourhood design and placemaking?. Or will this be ‘crowded out’ rather than ‘crowded in’ by the concentration on the high-cost and showcase schemes like airports and major roads. The evidence given last month by the Chair of National Infrastructure Commission, certainly suggested that might be the case, with his emphasis on road rather than rail ( or urban light rail) as priority. There is also a danger that the government is giving undue prominence to achieving growth in areas where the economy is already strong. Will the growth benefits really spread to the areas where more activity and prosperity are needed most? What is the incentive for the investors to take their rewards there?

The Prime Minister himself has indicated a ruthless focus on a certain kind of ‘macho’ investment. “We will rip up the bureaucracy that blocks investment. We will march through the institutions and make sure that every regulator in this country, especially our economic and competition regulators, take growth as seriously as this room does”, he has said, and the Chancellor unashamedly told her TV interviewer before her Oxford speech that she was “ripping up the planning system”.

Pressure is also being put on various elements of the Government and public sector institutions to get out of the way if their main task might interfere with the growth drive. That certainly is the message that has been given directly to the heads of the various regulatory bodies, with one of them being dismissed for his apparent intransigence. Isn’t the right challenge for them to examine whether they get the trade-offs they must make broadly correct?.

Such bodies are there for a purpose, one generally supported by all previous governments It is odd that it is a Labour Government seemingly bent on pulling their teeth. There will be a high price to pay if the result is another financial meltdown and genuine local democratic and community voices are disempowered by being dismissed as blockers and NIMBYs — something the political right were even generally too scared to do. And if it is building additional airport runways that the Climate Change Commission have said should not take place, that is also reversing a previous relative cross-party consensus on environmental priorities.

Meanwhile the enthusiastic drive to harness pension funds to finance the infrastructure the Government dreams of must surely ring alarm bells of a re-run of the 2008 financial collapse when the miss-allocation of others peoples’ money brought the banks and other institutions crashing down. Might the phrases ‘release surplus funds’ and ‘create larger consolidated funds to invest in high growth companies’ - both uttered in her speech by the Chancellor regarding pension money - not come to sound a little hubristic?

Changes made to financial regulations after the financial crisis were intended to prevent another crisis, so how is it sound to water them down now, in an even more unstable world? It was hitherto usually the Conservative view that deregulation is always desirable, and cheerleading the importance of private finance that allowed the financial crisis to happen.

It has been pointed out that politicians are nearly always tempted to prioritise near term growth over longer term growth. Growth that involves speeding climate change, or winning high stakes international technology market races , is not sustainable, and instead may lead to the current generation taking resources away from future generations at a time when some acceptance is perhaps overdue that constant growth may not be possible, at least whilst we steady the planetary ship we all travel on.

Equally, measures that appear to signal a short term rush for growth at the cost of increasing economic instability may reduce future wellbeing and create dangers and crises counterproductive in terms of having a long run stable economy.

There is, too, a danger of equating measures favoured by business with measures that will enhance growth. It is also dangerous to assume that measures that favour the wealthy must invariably help growth bring general benefit.

Of course, looking at this growth equation overall, there is a balance to be struck. The beneficial outcomes need to be seen alongside other matters. Not just economic ones, but the way society develops, confidence in democracy and fairness, and what makes up a good life and feeling of hope and purpose amongst ordinary people - or the ‘working people’ the Prime Minister is so frequently heard referring to . Their futures may be threatened by a technological revolution that itself needs management, and control of the forces it could release. We’ve been here before with the original industrial revolution . Whilst an incredible era of development, it was not one of unmitigated improvement to either the lives of most individual people, or the planet, as we now know to our collective cost.

An appropriate observation on this might be this one below, by Richard Henry Tawney, the English economic and social historian (albeit from another age, and incidentally an ethical socialist) in his book Religion and the Rise of Capitalism.

“Few can contemplate without a sense of exhilaration the splendid achievements of practical energy and technical skill, which, from the latter part of the seventeenth century, were transforming the face of material civilisation, and of which England was the daring, if not too scrupulous, pioneer. If however, economic ambitions are good servants, they are bad masters.

The most obvious facts are most easily forgotten. Both the existing economic order and too many of the projects advanced for reconstructing it break down through their neglect of the truism that, since even quite common men have souls, no increase in material wealth will compensate them for arrangements which insult their self-respect and impair their freedom. A reasonable estimate of economic organisation must allow for the fact that, unless industry is to be paralysed by recurrent revolts on the part of outraged human nature, it must satisfy criteria which are not purely economic.”

Peter Stonham is the Editorial Director of TAPAS Network

This article was first published in LTT magazine, LTT908, 3 February 2025.