You could be forgiven for having missed it, but in between fielding questions about free glasses and banning outdoor smoking areas, Labour has recently announced a three month review of the pension system with a view to boosting UK investment and growth. (Thanks to Jesse Griffiths of the Finance Innovation Lab, without whom this development would almost certainly have passed me by.)

This news has given me pause to reflect on a problem with Labour’s dash for growth that I hadn’t really thought much about before. Obviously, I can critique the “growth” part of this equation till the cows come home. But here I want to focus on the “dash”.

Labour has five years to prove that it can deliver tangible change to ordinary people’s lives, or its “sandcastle majority” (James Meadway) will be unceremoniously stomped on. In the absence of any other big ideas, and with its hands tied behind its back by its own fiscal rules, it has bet the house (or rather the sandcastle) on growth.

Rachel Reeves’ comments to Cabinet on 9th September give a good summary of this strategy: “Unless we grow our economy, we will not see the improvements in living standards and public services the country deserves, [and] we must first restore the state of public finances to deliver that central mission of government.”

This puts the government on a seriously punishing timescale. In the absence of direct public investment – which would be by far the quickest way for it to deliver growth – it will take time for any policy tweaks to translate into economic activity. It will take more time for that activity to translate into the promised public spending. And it will take more time still for that spending to pay dividends in improving our daily lives. Starmer needs solutions, fast.

But it turns out that – quelle surprise – there isn’t a growth fairy. That the reasons why there hasn’t been much growth over the last fifteen years are complex and deep seated, and are not simply a result of the Tories being somehow too incompetent to find the switch marked “growth” in Whitehall, or too indolent to press it.

And so we’re left with a three month review and the promise of a pensions bill before the year is out. Starmer is fond of standing in front of podiums which proclaim that he is “fixing the foundations”. If our investment system is one of the foundations of a strong economy, the cracks in it go so deep that I sincerely doubt they are going to be fixed by Christmas.

It’d be one thing if Labour had come to power with a strong set of ideas for how it might do this, and the review was essentially
a formality to confirm the wisdom of what they’d already decided. But I don’t have the sense that they even have a clear analysis of what the problems are, let alone how they might solve them.

In any case, we’ve been here before. Under Vince Cable, we had the Kay Review of UK Equity Markets. Though different in scope, it was addressing the same basic problem: the fact that capital markets no longer seem designed to actually mobilise capital for anything socially useful. Indeed, in some ways the Kay Review was more enlightened than the current effort, since it was specifically focussed on “long term” investment – while Labour’s main concern seems to be trying to get growth going as fast as possible.

Still, you might have noticed that capitalism hasn’t become perceptibly less short-termist in the years since the Kay Review. Nobody has been able to solve this conundrum by tweaking the system we already have, rather than opening themselves to the possibility that the system itself is fundamentally broken and we need to imagine something radically new. And certainly nobody’s been able to solve it by tweaking pensions legislation. The problems are structural.

Reflecting on all this, I had the sinking realisation that we are about to see an entire cottage industry spring up of “growth washing”, as armies of lobbyists compete to step into this policy vacuum and show why their pet policy is in fact precisely what’s needed to deliver growth. Sure enough, the pantomime has already begun – and the level of brazen self-interest on display would be laughable if it weren’t so dispiriting.

Last week a City report argued that if it wants to achieve its growth targets, the government needs to focus on providing “incentives for investors” to mobilise private capital to invest in housing, energy and water – otherwise known as basic public goods. (In other news, leading bears say the way to get growth is to shit in the woods, while today’s report from the Pope points to a £1trn Catholicism deficit, recommending “incentives to convert”.)

This week, it’s housebuilders asking for more subsidies for home ownership to give them the “confidence” to invest – even though we know this only serves to push prices higher. In any case, all the experts are saying that the government’s housing targets will be impossible to meet without the public sector building far more social homes. And it’s well known that the housing crisis is not simply a matter of not enough homes, but who owns them and how much they cost.

These proposals have one thing in common: they would make the necessities of life even more expensive by enhancing opportunities for private investors to extract rent from them. This flow of rents is, incidentally, one of the reasons the economy is stuttering in the first place. Turbo-charging it may or may not produce GDP growth, but it certainly won’t put more money in the pockets of ordinary people.

Both the government and the private lobbyists wooing it are performing increasingly elaborate contortions as they dance around the elephant in the room, which will surely become ever more glaringly obvious and hard to ignore: rebuilding the public realm is a prerequisite for “fixing the foundations” of the economy – not the other way around.

Around the same time that he led the Kay Review, John Kay wrote a book called “Obliquity”, about how our goals are often best achieved indirectly. The prime example given in the book was how the relentless pursuit of “shareholder value” – operationalised as the maximisation of next quarter’s returns – had actually destroyed value for everyone.

I remember reading the book and thinking that Kay had in fact stumbled upon the fundamental brokenness of modern capitalism, rather than some general law of human endeavour. But after two years of long covid, I’m more sympathetic to his thesis. Certainly, in my recovery process and in life, I have found that the more I’m able to relax and let go of chasing milestones, the more things flow, and the easier it feels to make progress.

By contrast, the more rigidly goal oriented I become, the greater my tendency to sabotage myself – even more so when I put pressure on myself to achieve results within an arbitrary, usually unrealistic timeframe. I become tense, inflexible, less open to new possibilities and creative solutions. Often I exhaust myself without achieving anything much at all. If this is the mindset our leaders are currently in, it is very bad news for the country.

It seems to me that there are two possible outcomes from this dash for growth. One is that Labour spends the next year chasing its tail, desperately trying to deliver quick fix solutions to deep seated problems, and ends up achieving nothing very much. The other is that they do things that are actively harmful or misguided, but which can promise to produce a quick buck – for instance, pushing new building developments through the planning system irrespective of their green credentials or the needs and wishes of the local community.

If the calculus is “back whatever can deliver growth the fastest”, then it is the exact opposite of fixing the foundations, the exact opposite of what our economy needs to be put onto a sustainable footing. And – if John Kay was right, which I think he was – it probably won’t even deliver growth.

One wonders what value will be destroyed in this mad scramble to produce GDP, what long term economic problems we are storing up for ourselves. Manchester Metropolitan University has long been trying to sell off my local meadow, Rye Bank Fields, for housing – to staunch opposition from the local community. It is a magical place, and has been a big part of my recovery from long covid. I fear for its future in this environment.

I wonder how many beautiful green spaces like this will be destroyed to make way for shit identikit houses. I wonder how many communities will end up sicker and poorer for being stuck in those houses without that green space, paying over the odds to banks and landlords for the privilege of living on the graveyard of some beloved ecosystem. I wonder how long this legacy will last, for how many more decades we are locking in a built environment that doesn’t help us live good lives, how much harder and more expensive the process of reversing that will be.

I try to be mindful these days of the energy I’m putting out into the world. I try not to write things that only serve to reinforce other people’s sense of doom. But honestly, I’m struggling to find the silver lining in this one. Our leaders have essentially staked their political careers on being able to deliver growth quickly without any idea how they will do it – and that’s going to put us all in a very dangerous position.