We have to make people care about economic growth

There are few problems more important than low economic growth. Beyond any other metric, economic growth determines job opportunities, salaries, living standards, and poverty levels. It provides more money for government spending projects, fuels human aspiration, and is a crucial building block for a prosperous society.

Economic growth is not, however, tangible. For most people, the difference between whether Britain grows by half a per cent, one per cent or two per cent (and it rarely gets higher than that these days) doesn’t make the slightest bit of difference. Like a number on a spreadsheet, economic growth isn’t something people can reach out, touch, or even concretely see in their day-to-day lives.

Instead, the impact of minuscule economic growth only occurs over the long term, through the powerful effect of compounding. Since 2008, British economic growth has averaged a sluggish 1.2 per cent, America 2.1 per cent, and China an extraordinary 6.7 per cent — failing even to contract during the great lockdown of 2020. Over those past 18 years, while the UK’s economy is almost 25 per cent bigger, America’s has grown by nearly 50 per cent, and China, 220 per cent.

If this trend continues, by the time Britain’s 2008 economy finally doubles in real terms, in 2065, America will be 220 per cent bigger, while China will be nearly 40 times bigger.  Economic growth, while practically imperceptible in the short term, is one of the defining features of most people’s lives over the long term, as GDP per capita slowly improves.

Indeed, properly understood, economic growth is a lynchpin to a whole myriad of social and economic problems. Paying the Triple Lock state pension, which rises by at least 2.5 per cent per annum, would be much easier if the economy kept pace with the single largest welfare expenditure. The NEETs and graduate jobs crisis could be solved if there were, well — more jobs. The arguments for mass immigration, supposedly needed to keep the economy going, could be pulled apart if economic growth remained high.

Yet despite growth’s almost puppeteer status at the centre of our modern national story, few people associate their everyday problems with it. Eliminating poverty, by far the greatest raison d’etre for left-wing politics, is not associated with economic growth, even though economic growth is the single greatest alleviator of poverty throughout history.

By contrast, most other political problems are tangible. Stopping the small boats is highly tangible. Taxing the rich is tangible. Saving “Our NHS” is tangible. Remilitarising is tangible. Even stopping the “Brexit Betrayal” is more tangible than growth. Until it’s made more tangible, economic growth will continue to be a low priority in voters’ minds, and therefore, not be taken seriously by politicians. The “invisible hand” Adam Smith wrote of over 250 years ago in The Wealth of Nations is just as invisible today.

Worse, to prioritise economic growth, the government must make considerable cutbacks elsewhere, to budgets that are very tangible in the minds of voters. As Lord Moynihan points out in volume one of his brilliant thesis, Return to Growth, a ten per cent increase in state expenditure as a percentage of GDP penalises growth by about one percentage point.

The right has a rich history of coining new phrases to tangibly describe changing political realities

With GDP just over £3.1 trillion, a ten per cent cut to public sector spending today would be roughly equivalent to scrapping the NHS and police services, or the entire defence budget nearly five times over. That is, to put it mildly, a radical budget for even the most reforming chancellor.

Thankfully, the right has a rich history of coining new phrases to tangibly describe changing political realities. In 1998, the advisors to the then Tory Shadow Chancellor invented the term “stealth tax” to highlight the cost of New Labour refusing to raise tax thresholds in line with inflation. It has been part of the political lexicon ever since.

“Stagflation”, the “nanny state” and “virtue signalling” have all been invented by post-war conservatives. “Boriswave”, coined only two years ago, has been so successful it has surely confined the most seemingly lovable politician of a generation to the political graveyard. Most masterfully, “Take Back Control” captured in three words the total absurdity of Britain being ruled by an undemocratic supranational regime in Brussels.

Salesmen often say that to sell an intangible product (like life insurance), you have to sell the benefits. So it is with economic growth. If the right wants the public to take it seriously, it is going to need a new term that encapsulates the prosperity-inducing, life-giving benefits of economic growth. Until then, it will remain as intangible — on spreadsheets or otherwise — as ever.