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Economic Rebalancing

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Although, as discussed below, the Labour government also utilised the notion of economic rebalancing after 2008, the argument that New Labour had allowed the UK economy to become unbalanced formed one of the key critiques, alongside that of profligacy, of their predecessors in office by leading coalition figures. Rebalancing therefore exposes one of the discursive anomalies, or ironies, of the post-crisis era in the UK; in short, rebalancing renews the longstanding discourse around economic ‘decline’ often indulged by elite actors in the UK since the Second World War. Moreover, the emphasis on promoting manufacturing and Northern England, ahead of finance and the City of London, lends weight to some of the most critical declinist accounts of…show more content…
Is it possible therefore that the Conservative discourse of rebalancing actually contradicts the mutually beneficial relationship between austerity and financialisation that appears to have been at the heart of the coalition and Conservative governments’ economic policy agenda? This chapter argues not. The extent to which the public discourse on rebalancing actually propels economic policy-making in practice can of course be questioned (as with the discourse around austerity). Yet the chapter’s principal objection to the possibility that rebalancing contradicts austerity and financialisation by endorsing the notion of a finance-induced decline is that rebalancing discourse actually stops well short of endorsing the view that the UK economy (and the way it is governed), or any of its component sectors, is fundamentally flawed. The industrial and regional policy agenda to which it appears to have given rise offers little threat to the key elements of the pre-crisis growth model. Indeed, parts of this agenda constitute integral elements of the elite politics of austerity, insofar as austerity heralds an adjustment to the aspects of the pre-crisis growth model deemed most problematic, rather than its wholesale replacement. The chapter begins by documenting examples of coalition and Conservative rhetoric on rebalancing, and exploring its relationship with austerity. It then focuses consecutively on the most important dimensions of economic rebalancing, as espoused by policy elites in the post-crisis period; firstly, industrial policy, and secondly, devolution to
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