136. Are Labour’s Growth Goals Meaningless?

0:10Hello and welcome to The Rest is Money with me Steph McGovern and with me Robert Pairsten Now today we are going to talk about growth. We love talking about growth, don't we? Growth makes the world go round, we're not going to complain about it. It's the reason we get up in the morning. But the reason we're talking about it today in particular is because we are joined by Prafful Nagland and Chris Curtis, who have been working on a brand new report. And it's all about, they say, what real people think about growth and what politicians are missing when they set these targets for growth or when they talk about how they're going to achieve it.

0:43And, you know, that's something that really matters to us. It's something we talk about a lot on the show. It's that tangibility of what it actually means in the everyday. I mean, that's completely right. And look, just to be clear, this is not their views, Praffle and Chris. They did an opinion poll survey involving, I think, more than 2 ,000 people. And they've conducted lots of focus groups. They have focused particularly on those voters who switched from the Tories to Labour last time round. So I think it's very important when we have this discussion with them, that listeners bear that in mind.

1:19But the point of their research was to basically get to the bottom of what growth means to most British people. and I have to say when I read their report I was slightly shocked actually by their findings Were you? Because I'm the opposite I read it and thought yeah this is what I feel like I'm hearing all the time from people That's why this is an interesting conversation to have with them because the bottom line of what they found out is that when Keir Starmer as he does pretty much every time he appears in public talks about the importance of growth I think you'll find as a result of this research that what he thinks people are hearing is not, in fact, what they're hearing.

2:06It's worth just saying who they are as well. Chris Curtis is an MP who came in this year, isn't he? He's an MP in Milton Keynes. Yeah, brand new MP. Former pollster, wasn't he? He was at YouGov. He was a senior pollster at YouGov and did, I think, some pretty important measures of British public opinion in the run-up to the election. Yeah, and Praffle as well runs the Good Growth Foundation, which is a think tank he set up. looking into all of this. But he's ran quite a successful fertility business called Create Fertility, which his mum had started and so has that business side of life to him as well.

2:39He's got a business background. He's also, let's say, got some scars from having actually, at the last election, got himself into politics as the Labour candidate for Islington North. And those of you who are students of British politics will know that Islington North is the seat where Jeremy Corbyn has been MP for decades. He was thrown out of the Labour Party. It was Praffle versus Corbyn. And I don't think it was, let's say, the politest of constituency battles. Praffle lost. He's bruised. He's scarred. But he's still standing. And he's not talking about that today. So here is our interview with Chris Curtis and Prafful Norgun from the Good Growth Foundation.

3:29Chris, Prafful, thank you for joining us. It's really interesting, this research you've done, in terms of what public opinion is about growth. It's something Robert and I talk loads about. You know, what does growth actually mean to people? We talk about what GDP is, how it's measured and everything else. But what does it actually mean to people out there living life, trying to navigate through it? And this is what you've done research on, isn't it? Can you just tell us a bit about how you've ended up doing it, the background to this? We're the Good Growth Foundation and people are constantly asking me, what does good growth mean?

3:59And we thought rather than telling people, we'd actually go and try and find out what growth that people would like to see looks like. And I think, you know, in the past, there's been this received wisdom that a growing economy, people generally think it's good for them. But actually, what we found is there's a bit of a gap there. And that's what we've had a deep look at. And so what are you focusing on with the work that you're doing, on the good or the growth? It's a really good question. I mean, some people say to me, sure, we just need any growth. And I think one of the key conclusions of our report is that actually there is a world where even, you know, growth could be taken as a signal of failure on the economy rather than as success, if it doesn't really translate into people's living standards and changed experience in their day-to-day life.

4:40Chris Curtis is also with us, now a Labour MP, was at YouGov. How did you do this research? How robust are these findings? Oh, incredibly robust. So it's a series of mixed methods. We had focus groups that were done earlier on in the process, and then some polling that went alongside it as well. So it really helped us to dig down just into exactly how the public interact with the economy. Because you'll know as much as anyone else, Robert, often the conversations that happen in Westminster in politics can become very, very distant from the conversations about people's ordinary life. And often the more time you spend down in Westminster, the more disconnected you get from real normal people's lives.

5:20So it's so important to be doing research on this, even if the topic is as big and significant to this government as economic growth. And just to be clear, this is a government that says its number one priority is getting the growth rate up. When you put that to the people that you've been talking to in both the big poll, couple of thousand plus people, plus your focus groups. What do they hear when Keir Starmer says that? Most people, I think, from the research that we've seen, understand the importance of economic growth. But we also need to make sure that we're explaining as we go along in this process, actually, why that economic growth can create all those other things that are really important to your life as well.

6:06I mean, one of the lines that the Chancellor has made perfectly clear, for example, is if economic growth in this country over the last 14 years had been the same as the, or last decade, had been the same as the OECD average, that'd be five grand on average in the pay pockets of every family in this country. That would be billions of pounds extra going to the Treasury in order to fund the National Health Service without having to make a penny difference to any tax rates. So actually making sure that we're telling the story about why growth has been one of, if not the biggest driver of the problems.

6:35Lack of growth has been one of the key drivers of the problems that this country has faced over the past 16, 17 years, and why getting that growth rate back up again is the most important thing in ensuring that we get back on track. One of the things that I was particularly interested in, because it's something Robert and I talk about a lot that was in your research, is about who growth actually benefits. And Praffle, this is something that came up as a big theme, didn't it? It's that people think growth benefits somebody else not them and so one of the things that you say praffle is for many people getting the growth rate up is for them failure because they see growth as rewarding privileged people and none of it coming to them and they're fed up yeah with the gap between them and and basically wealthier richer people getting even wider yeah that's very much the spectre from the research You know, we ask about what good growth means.

7:34People do think growth is important. They generally think it's good. As soon as you dig in a little bit further, they go, well, has it actually ever been that good for me? You know, they don't feel that the rising tide lifts all boats. If anything, they think growth always seems to benefit someone else over there, maybe big business or the wealthiest. And so when you ask them what would be that success measure, it's certainly not GDP. It's not the figures. It's those real changes in their lives. And in particular, this laser focus on the cost of living. Can I ask you, Steph, because, I mean, you know, you talk about this all the time.

8:09Does this resonate with you? If you, you know, where you live, you know, in the northeast, if you were just to talk to a random selection of people and you said to them, Keir Starmer wants to get the growth rate up, that must be great. what would they say to you they'd say that means nothing to me because so for example this week i met up with a lady who runs the food bank where i live it's a brilliant food bank in the sense of they're incredible to the local area but they've also managed their donations well at a time when they've massively reduced and demand has massively gone up and they're you know she was talking to me she'd come to see me because i'm a patron of the charity about what can we do to future proof and make sure they've still got everything.

8:52And for them, nothing has got better for years. It's just got worse and worse and worse. I was looking at the figures and it's gone from handing out a couple of food parcels every day to literally thousands a week. And this is one area. This is one part of like North Tyneside. It's not even, you know, a big area. It's one suburb of Newcastle rather than the whole of it. and so for people like her that she just she was really miserable about life she's a very much an optimistic woman she was a teacher for a long time she's gone into the charity sector as a volunteer and she just was like i don't i can't see this getting any better so all i need to focus on is how can we just get more donations rather than you know what what's happening to these people these are working poor as well so she's saying to me a lot of these people it's the pay packet is not seeing them through completely.

9:45So at the end of the month, they're having to come reluctantly to the food bank to get a parcel, even though they're working and they're doing as much as they can, I guess, with what they've got, and it's just not enough. So just to be clear, Prathol, you're saying, and this very much ties in with what Steph was just saying, that when you say what would be good for you if this government succeeds in this economic mission of getting growth up, what they come back to is they've got to reduce the cost of living. Overwhelmingly. I mean, the cost of living is the alpha and omega on the economy. It's seen as the cause of economic dysfunction and stagnation.

10:25And it's seen as the marker of whether or not the economy has got better, whether or not their cost of living pressures have eased. But the other thing which I thought was sort of bizarre, really, is how they, in a sense, understand this and experience this is the prices they pay for the stuff they need you know whether it's you know going to the supermarket or you know energy when you ask them what if pay goes up faster than prices that was somehow not so convincing to them i mean it's very much shaped by lived experience right so you know people have seen that prices are just shooting up all the time So there is a natural scepticism that if wages rise, their prices won't just eat into their wage packet even further.

11:10And that's very much the default position. So they want to see prices to fall. They want to see, you know, essentially the cost of their shopping basket come down. Is that what they're desperate for? I mean, literally in focus groups, people would talk about things used to costing X. Now they cost double or whatever it might be. And they'd mark success as when it costed X again. But not how much they're paid. Yes. And actually, we would ask them, you know, well, what about your wage increase? My bills will just go up. That's not to say that what we should be actively pursuing is deflation. I think the point is, is that the level of scepticism is high based on the experience over the last few years.

11:46And there is this deep desire to really see these personal visceral changes in their lives. I mean, we talked about, you know, you spoke about, you know, GDP rate or the growth rate. When we asked people, you know, what would you point to as, you know, an economic marker that would be important? They talked about productivity. They talked about wages. They didn't talk about GDP. But, you know, a person can be productive. But think about it, right? A person can be productive. Yeah. A person doesn't have a personal GDP number. No, but I'm interested that they've mentioned productivity then, because that is something that is really hard to measure and understand, I always think.

12:21But do you think that's more understandable than growth to people? Well, I think it's about what's intuitive, right? And one of the things that we talk about in the report is, you know, what is more intuitive? What does resonate? What will relate? And the things that resonated were all very much borne out and lived experience. If you think about health, for example, people quite naturally drew a connection between an NHS with very long waiting lists and an unhealthy society and the fact that the economy was stagnant and many people were too ill to work. Right. So they drew that productivity conclusion quite naturally and intuitively.

12:56The same on skills and training, which they really saw. I mean, that was probably the strongest, most intuitive policy area that people bought into skills and training. They saw as a game changer. Well, it links into this growth is something that benefits someone else. And the challenge can then become when a growth measure seems distant or far away or benefiting a narrow group of people. And sometimes even jobs, you know, more jobs. Well, if I'm not going to get that job, what does it mean to me? Or if I'm not going to get to use that infrastructure, what does it mean to me? But skills and training is an enabler.

13:27It suddenly shortens that distance between that thing over there, that big growth mission project, and my own lived experience. If not for me, then maybe my kids. So, you know, skills and training in particular, very, very popular. We're going to come back, I think, in a minute and just develop the whole skills, you know, what that actually means in practice. What could the government do that would connect with what people feel they need? But if I could just ask Chris, there is nothing that this government is currently doing which would reduce the cost of the shopping basket, right? I mean, it's not remotely on this government's agenda.

14:06Do you think yourself, on the basis of the research you've done, that there is any practical policy for this government in the space of trying to get the cost of these essentials down? I mean, I'm reminded, for example, that during the COVID crisis, President Macron in France did institute a policy of saying, but, you know, the price of these basics must not be higher than a certain amount. And he reached agreement with the big supermarket chains on that basis. In the last election, right, both candidates, both Kamala Harris and Trump spoke the language of getting prices down. Now, in practice, I suspect Trump will do absolutely.

14:53In fact, I suspect in practice, given what he's doing in terms of introducing tariffs, the opposite will happen. But nonetheless, it was a major theme in the American presidential election. Is there any way that a Labour chancellor can somehow grasp this agenda? So I'm probably slightly more optimistic on this side than the conversation that's been happening so far. I mean, take this argument a little bit further. The main reason why people are not getting this connection between where it sort of doesn't matter if wages go up without costs going up, that's really good for the amount of money in my pocket.

15:29The reason there's that cynicism about that is because people haven't been seeing it happening. So if we can actually prove it is possible to not have those price rises, but to start getting more money into people's pay packets, which will then increase the disposable income, the really important mission of this government, then we can alleviate that cynicism. But a lot of the difficulty with public opinion research like this at the moment, many of the challenges we face as a government, we talk a lot about the broken public services. We talk a lot about the broken economy and the lack of economic growth.

15:57But we're also operating in a context where, probably caused by those first two problems, voters have very little trust, very little faith that politics can provide the answers, that can provide the solutions to the issues that they've been facing in their life. And this needs to be the government. You know, a lot of what we do is sort of following using public opinion research. On this one, we just need to prove them wrong. Sure, they're cynical. Sure, they have low trust. But we need to be the government that proves them wrong. We need to prove that we can be the people that work towards an economy that operates again.

16:30We need to be the people that show that those problems they're facing in their lives can be solved by government and by politicians. And by doing so, we can start that really difficult, really hard process of building trust back up in politics again. It's obviously getting prices down, going back to an era that we had in the 1970s of price controls is what you might say fashionable in political circles at the moment. But Praffle, telling British people who you've been talking to, they're wrong, that this is what we should be doing is, I mean, it's quite tricky there. I wouldn't say that sounds like a route to electoral nirvana.

17:07The challenge with price controls is that it does in the end actually have to work. I mean, one of the things that we got quite clearly from the research is that, you know, the proof is in the pudding. Will money in their pocket actually increase? Will they actually see a change in their living standards? And the challenge often with price controls is that the costs just end up somewhere else in the system and you end up, you know, maybe with queues and the world changed in other negative ways. And so the question then becomes actually, you know, yes, they start with scepticism. But can you reset the dial on that?

17:37Can you actually get that productivity, that wage growth to happen in a way that does genuinely outpace the cost of their goods? And actually, to be fair, quite a lot of things are happening that are pushing in that direction. You know, you've got the Employment Rights Bill, which is going to raise the floor on standards and work. You've got minimum wage increase. You've got lots of big things on infrastructure happening, which will hopefully corral investment. So all of these things may well actually end up with, you know, disproving them to some extent. I was interested as well that, you know, we again, because of the fact I live in the north and Robert's down here in the south, we often talk about the north south divide.

18:11But in this research, what you guys found from talking to people as well is there's divide within the regions and that. And I actually agree that that is the bigger problem because, you know, it's that there'll be cities that see a lot of investment and then the kind of areas outside of it and the towns and whatever else outside that don't see the investment, that feel hard done by. And there's that. I suppose it's a bit like when you are a Middlesbrough fan, you know, you're a diehard Middlesbrough fan and will always, you know, football I'm talking about. And, you know, you will always go against, you know, you'll always support the North apart from when it comes to something like football.

18:48you hate the Mackhams, the people from Sunderland, you hate the Geordies. And it's like that. But yet when you're not in the area, you're like, all the Northerners are all together, we all support each other. It's the North versus the South until it comes to football. And it's a bit like that. When you dig down, there are these big divides. Yeah, you're completely right. And the conversation is often had between disparities between London and the South East and the rest of the country. But this growth happens to someone else does feed into much more local environments. I mean, I remember a chap from Wakefield talking about how he always felt Leeds was the place that got all the investment and all the opportunity.

19:23And I was born in Bradford originally. You know, you know regional rivalries, right? And it comes to actually some of the challenges around devolution that we found, that sometimes people can get their head around how this would actually work in practice, especially when they see these divides even in their local areas. Really interesting, though, Chris, just on this, the government's got to prove, you know, the people wrong that it's about you know getting prices down for me as somebody who is you know basically paid to watch the political game and comment on it the thing that that the government doesn't seem to get is they do talk about growth the whole time your report says this is broadly but you know paraphrasing too nebulous a concept for most people you've said it should all be about the government proving over the years that's in government that it is improving living standards but one of the great lessons for example of trump's victory is if you want to believe that that is what you are doing you've also got to talk about it morning noon and night and let's be clear this is not a government that talks i mean it talks about growth it doesn't talk about making people better off as much as you say they have to so i think that we should be talking a lot more and in our language using a lot more talking about the ordinary everyday economy that people experience rather than those top line um concepts i i certainly think that that's a that's a reasonable argument for you to make robert um and we certainly need to be doing that look i mean in the speech that the prime minister set out his milestones we did start to see some of that shit the economic metric that we're going to be measuring ourselves on is, is there more disposable income in the pockets of people in every part of this country?

21:11Because yes, growth is the most important mission of this government. But if that growth doesn't mean leads more money in people's pockets right across this country, then it will be a mission that has still failed. And to the same extent, that's one of the reasons why the economic growth that we've seen in the US didn't lead to the Democrats being reelected, because it wasn't growth that was felt in ordinary people's pockets so we do need to insure at the same time but let's be clear about that it was in people's pockets they just didn't feel it was it was the vibe the problem was not the economic reality the economic reality is biden made most people better off but the vibe was wrong people didn't believe it well that i'm i'm not sure there were lots of metrics uh under which uh the biden uh economic reality wasn't felt by a lot of ordinary people so i'm not sure that's quite as clear cut as you're I can give you the data.

21:59The data is they were better off. They just didn't believe it. We're sort of getting into this quite complex argument about the politics and the public opinion and the reality. But it is also incredibly important that we ensure as politicians, as we're going through this process of kickstarting the British economy, as we're going through some of the difficult decisions that need to happen in order to do so, we also need to make sure, as you say, that we're talking about it, we're talking about the benefits of it, and we're using language that is rooted in people's everyday lives. Else, you know, we're not going to be able to take people on that journey with us.

22:27Yeah, it does. That's the fundamental thing. It's the point you made about food banks as well. But it's also the point, even if you're not the sort of person who's at that level of using food banks, in recent years, it's people who used to go on a foreign holiday every year and haven't been able to do so. It's people who used to like taking their family out for a meal out or a couple of meals out at a restaurant and currently can't afford to do so. It's about all of those small cutbacks and inconveniences that people now have in their lives. Basically, because we've had an economy that hasn't been functioning in my adult lifetime.

22:56And my God, it would be so good to be able to give people those small luxuries back in their lives. I would just add as well, it's the small business owners and people like that too. That's the ones that I'm seeing locally who are really taking the hit. It's worth saying on this, is it price? Is it something else? You're right. Trump, even Farage have really cottoned on to the cost of living being at the heart of the economic agenda. But when you talk to people and listen to them in the focus groups, they talk about not being able to afford luxuries. They talk about their high streets and their communities and the crime and all the other visible signs that life isn't good anymore.

23:32And there is this general sense of, you know, actually quite a strong despondency about the country. I mean, we we asked people a fun question, you know, how would you describe Britain, Britain's economy as a car? And I think, you know, the kind of most common answers we got were things like Ford Fiesta, Reliant Robin, Old Banger. There was this gentle despair about the state of the country. Not your Citroen. Not my Citroen. Citroen was on the list somewhere. I love my Citroen. Is Britain your Citroen? I think it's more my dad's Talbot Horizon. Oh my goodness. That's taking us back in time. No, back in the day.

24:12So look, there's much more to dig into so we'll come back to all this in a minute or two.

24:21everyone knows who listens to this show that i'm obsessed with skills and i know robert is as well it's interesting that that was a big priority because the the sense that i get from people all the time is people want to work they don't want to be on benefits the the people who are for example a family friend who's on benefits at the moment worked for a long time got made redundant can't has tried for at least a year now to get another job and really struggled and is you know is older, doesn't feel like they can work in retail, even though they're applying. They keep applying for jobs. They're applying for absolutely everything.

24:56They're applying for supermarkets. And they're just struggling to even get in. And they don't want to be on benefits. They want to work. And so that skills, that re-skilling has got to be part of how we get growth. Yeah, and it is incredibly popular. I mean, you know, it rang towards the top pretty much whenever we were testing which levers are the ones that people care about. it's very tangible, it's very personable. As I said, if it's not for you, it's for your kids. And it even works at bridging the gap between industries that might seem far away. I remember in one focus group, people talking about, you know, why do we need to help the digital sector?

25:32They're already doing really well. Why do they need any more help? But skills is this, you know, if I can get the digital skills and I could go and work in that sector, it completely changes the conversation. And I think actually a lot of the time when growth is talked about as something very far away, skills and training is this great mechanism of opening up to everyone yeah but it feels like chris there's not enough happening in that area in terms of making people feel valued for the skills they have and understanding they're transferable i know so many people who feel like they're being left out now by society you know bridget phillisman's talking about stuff in school education there's very little about the kind of adult lifelong learning that's going to be really important as the population gets older and keeping people in work what are your thoughts on that i think we have been doing quite a lot already and i know that there'll be a lot more policy area to come and i'm from uh mp for milton keens i've got the open university or any my patch you know brilliant labor invention which is really um focused on lifelong learning and i think that the connection that praffle was trying to make there's a really important point a lot of the reason for a sort of lack of trust in the economy and politics is political failures in recent years.