The next UK general election is in 2015, and the country’s politicians are already engaged in a classic pre-electoral sport: the race to the bottom. They are desperate for policies which please voters and the competition is fierce. Popularity is the aim, populism is the method. None of it is going to do the economy any good.
The opposition Labour party started out with a stunningly bad idea. Ed Miliband, the Labour leader, proposed a twenty-month cap on volatile energy prices in a free-market economy. That is folly, as it ignores the economic reality that energy bills reflect the elevated global price of oil. It discredits Miliband and his economy guru, Ed Balls.
The coalition government didn’t take that foolish blow lying down. David Cameron, the Conservative prime minister, came back with a daft idea of his own – to bring forward the second part of the Help to Buy plan, which provides a government subsidy for buyers of existing houses. The main result will be to increase the price of already expensive housing.
If politicians really cared about affordable homes, they would work hard to increase the supply of housing, not of money to buy houses. Labour does have a big idea – to ask Sir Michael Lyons, a former BBC chairman, to come up with a plan – but whether it will at last provide sufficient construction to satisfy the growing population remains uncertain.
Meanwhile, George Osborne, the chancellor, is doing what he can to keep the government ahead in the bad policy contest. His idea of make-work for the long-term unemployed ignores the two principle causes of unemployment: a lack of jobs and inadequate education.
The incumbent government has one real economic policy – an entirely necessary fiscal austerity plan. But it lacks a serious house-building programme, an integrated transport vision or anything of substance on education, government efficiency, healthcare and urban renewal. Labour, having lost on austerity, is struggling to come up with fresh policies at all.
The UK needs true leadership, not politicians looking for short-term electoral fixes. Perhaps the vote-searchers should put something currently unemployed to work: their brains.