Natalie Bennett: We can’t rely on economic growth any more

We need to end our obssession with economic growth.

Back what seems an age ago, but it was only a month, on March 26, I last had the chance to put the question of the dependence of its economic and social policy on GDP growth to the government.

The country had just gone into lockdown, the previous day a depleted House of Lords had been struggling with some of the failures and omissions of the Coronavirus Emergency Bill but reluctantly passed it through committee stage and into law. So we didn’t get the scheduled growth dependency debate.

Today, however, I will get a chance to revive it, in virtual Lords sitting, to respond to the written answer that I received from the government last month: “Our economic priority is to ultimately see the economy grow, therefore, we make no apology for ‘growth dependency’.”

Today’s starter query is phrased in the “neutral” manner that oral questions must be phrased: “to ask Her Majesty’s Government what plans they have to protect the prosperity and wellbeing of UK citizens from the effects of the COVID-19 pandemic on UK GDP and the global economy.

An expert who I’ve been consulting on the issue said he feared that the phrasing would allow the government to wiggle out of the debate with platitudes about their current spending plans.

That’s always a risk. But I hope that collectively the House will be able to get deeper, and return to the most topical aspect of the question of growth dependency, for, as I wrote on PoliticsHome last month, relying on growth now is like a doctor prescribing unicorn horn, or planning to use alchemy to fund the treasury.

Mainstream economists are saying that the economy is unlikely to return to the pre-coronavirus level for three years,  China is finding that even having apparently contained the virus and loosened restrictions citizens are understandably clutching their pursestrings, and it has just emerged that the US GDP fell an annualised 4.8% in the first quarter of the year, leading to predictions that the second quarter fall will be between 30 and 40%.

Even before coronavirus, despite massive money creation and low interest rates, the world had not been delivering the levels of growth that traditional approaches depend on. And that now looks even more unachievable.

I heard one academic this week refer to our era as “the age of shocks”, looking to financial instability, food insecurity, health threats, and of course climate chaos  – the containment of which of course also demands that we not keep trying to have infinite growth on a finite planet.

Relying, as the richest societies have been since the Second World War, on growth in GDP to maintain social stability and progress in health, education and other services, is clearly impossible.

Particularly in recent decades, with inequality soaring, workers’ share of national production plummeting, austerity slashing away at the provision of services, governments have been relying for legitimacy on the claim that if the pie got bigger, even the increasing numbers only getting crumbs from it would at least get a few more crumbs. 

That, in a nutshell, has been the claim of neoliberalism, together with the demonstrably nonsense claim that “anyone could make it”, and not just by winning the lottery, that social mobility was possible and as Pierre Bourdieu labelled it, the “imaginary universe” could deliver every prize, instantaneously to everyone.

We see it quarter after quarter, year after year: the single figure of GDP growth leads the news bulletins, tops debates in the Commons as ammunition for government or opposition, is seen as THE measure of success or failure of a leader.

Few political leaders, globally, and certainly in the UK, have been prepared to say: “Stop. This is the wrong goal. A dangerous goal that threatens our survival and stability.”

Meanwhile, rising child and pensioner poverty, growing food insecurity, soaring numbers of zero-hours contracts, rising temperatures and declining wildlife populations play second fiddle – and very seldom is the link between the God of GDP and the misery of people made clear.

So what I’m seeking the government’s answer today is not “how it will restore growth”, but how it will change its focus, its economic management and political approach, to focusing on ensuring that everyone in the UK has the resources for a decent, secure life, free from fear of not being able to put food on the table and keep a roof over their head, in a nation that has seen major shrinkage in GDP.

We start, compared to many other comparable states, in a position of insecurity and vulnerability. But that makes the need for change crystal clear.

It is easy to say “we have to deal with the virus first, then think about the future”. But the emergency decisions being made now will have a major impact on the shape of society for many years – so if we bail out the taxdodgers, they’ll continue to dominate our economy.

Now is the time to face up to the failure of our existing philosophy and approach.

In a second debate today I’ll be talking about one practical part-answer to changing the shape of our society to resilience and security – a universal basic income.

But this first debate is asking the government to take a much bigger step, to acknowledge that its job is to deliver a society in which everyone has the resources to live a decent life, even in times of crisis like the present, while we live within the physical limits of this one fragile planet. And that means many who are consuming a lot now have to take out a lot less.

It’s a work in progress – creating a new economic and social model – but a project that we have no choice but to deliver.

Natalie Bennett is a Green member of the House of Lords and an associate editor of Left Foot Forward

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2 Responses to “Natalie Bennett: We can’t rely on economic growth any more”

  1. Natalie Bennett: We can’t rely on economic growth any more - Politics Highlight - News from the Left and Right

    […] 30 April 2020Politics Highlight We need to end our obssession with economic growth. Author: Natalie Bennett | Source […]

  2. Recognising the UK's Growth Dependency | House of Lords debates w/ Baroness Natalie Bennett, Mar/Apr 2020 - Limits To Growth

    […] the government’s answer not to ‘how it will restore growth’, but—as summarised in her corresponding blog for Left Foot Forward—”how it will change its focus, its economic management and political […]

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