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Rebalancing the Economy: Calling for Economic Planning?

25 February 2012

With the House of Commons back from its recess, this week saw the BBC’s Daily Politics return to its lunchtime schedule. Alongside the NHS reforms, Michael Gove’s proposed ban on parents withdrawing pupils from schools during term time, and comment on the forthcoming Sun on Sunday, one of the first issues dealt with on Monday was that of rebalancing the UK economy.

Speaking on the programme, Nikki King, the Managing Director of Isuzu Trucks, stressed that there were ‘green shoots’ but later noted that the government had to do more (through planned investment rather than tax cuts) to rebalance the economy. This has become something of a perennial issue with most commentators agreed that ‘something’ needs to be done. But what? And how?

The issue provides an interesting link with 1920s and 30s calls for ‘economic planning’. Then, like now, the British economy was suffering from a prolonged period of uncertainty brought about by a financial crash. But, unlike now, there seemed to be an easy solution for some economists and politicians: simply ‘plan’ what you wanted the economy to do.

This all fed on a looser feeling that ‘something’ had to be done; in fact one of the earliest calls was an essay written by the ornithologist – ie a bird watcher – and conservationist Max Nicholson.  Nicholson’s essay, National Plan for Britain (Weekend Review, 14 Feb 1931), would provide the inspiration for a group of industrialists to form ‘Political and Economic Planning‘ and for a group of politicians and opinion formers to form the ‘Next Five Years Group’ .

Although often regarded as being fairly inflexible (see Hayek), their vision of planning was actually quite loose. Some of the proposals were deliberately short term and many were designed to bolster – rather than replace – the economic system. For some progressive Conservatives it was regarded as a reformist measure that would foster greater cooperation between the state and private industry.

Today, it seems that there is a similar feeling that ‘something’ should be done. But there is less agreement on what, or to what ends. Added to this, we are all a lot more sceptical about how much could actually be achieved. All of which will hopefully be examined in a later post.
Perhaps what this example shows, is that a momentum for change can come from pretty unlikely sources. To this end, maybe Nikki King will become a twenty-first century Max Nicholson… 

See also:

Arthur Marwick, ‘Middle Opinion in the Thirties: Planning, Progress and Political ‘Agreement’’, English Historical Review, 79:311 (1964), 285-298

Nikki King’s Interview


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