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Furthermore, it seems disingenuous for a Tory chancellor to be advocating less competition between European states while encouraging more competition between various parts of the United Kingdom. But that is what he doing. The Enterprise Zones he is setting up in Birmingham, Bristol, Leeds and Sheffield will use lower taxes and lower regulation to encourage jobs — more than 50,000 of them, by Treasury estimates. A heartening figure, which makes one wonder just how many jobs could be created in Britain if this tax-cutting remedy were applied nationwide.
Britain is facing two emergencies at present: social and economic. As James Forsyth argues on page 10, David Cameron has a worrying habit of responding to crises by making speeches while all too seldom following these up with action. Last March, for example, he promised that his Chancellor would ‘unveil the most pro-enterprise, probusiness budget for a generation’. The budget that followed failed to live up to a fraction of this promise. The Chancellor’s own Office for Budget Responsibility judged that there was nothing in it to affect either jobs or growth.
Privately, ministers moan that they would like to do more for the economy but that their hands are tied by the European Union. They cannot offer VAT holidays, or cut regulation in the way they would like. Businesses are confronted with an ever greater regulatory burden, from Brussels with love. Slowly, ministers are beginning to share a conclusion which most voters reached long ago: that membership of the EU makes Britain poorer and less free. The membership fee for this club now stands at £4.9 billion, a larger sum than is planned in cuts to police and prisons.
Whatever the eurozone countries agree, the EU is likely to need a new treaty, which in turn will need Britain’s assent. What should be the price for that signature? What do we want from Europe? The answer is not greater fiscal union between France and Germany. Britain’s national interest lies in the repatriation of powers over tax, regulation and employment. The Treasury may be right that the Enterprise Zones will create 50,000 jobs. But according to the CBI’s estimate, when the EU directive on part-time workers is implemented in Britain, 250,000 jobs will be lost.
The eurozone does face hard questions. Osborne, however, would do better considering the questions facing him. Given the depth of Britain’s social crisis, is it right that the international aid budget will soon be bigger than that of the Home Office? Given that his last budget failed to stimulate growth, what more effective measures could he take next time?
He is right to boast that British job creation is the second-fastest of any major industrialised country. But why is all of that increase accounted for by foreign-born workers? Are we in the business of creating workers, or importing them? Under Labour, 99.9 per cent of new jobs were accounted for by the arrival of foreign born workers. One would imagine it is hard for this figure to become much worse. But in the first year of the coalition government, employment rose by 181,000 — and there were 278,000 more foreign-born workers. What is the point of economic growth if British dole queues are getting longer? Blame lies not with the industrious immigrants, but with a dysfunctional economic model where welfare competes far too effectively with work. Many British workers, once introduced to a life on benefits, have no incentive to leave for a job.
In the interview on page 14, Iain Duncan Smith talks as if we are facing a battle. Michael Gove has long behaved this way, and acquired the scars to prove it. The Chancellor, too, should realise that Britain is facing an economic emergency. If the tools to deal with it lie over the English Channel, then he ought to reclaim them. Now is not the time to act as an unpaid consultant to the Franco-German alliance. It is time to make Great Britain into a national Enterprise Zone. The riots have lent a sense of urgency to all this. If we fail to fix the broken economy, the results are now horribly easy to imagine.
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