UK economy needs to be on a war footing, says former PM Brown

The UK needs a “turnaround strategy” for the economy, which should be put on a “war footing” to stimulate growth, former prime minister Gordon Brown has said.

Sharing a platform with another former prime minister John Major to call for government reform, Mr Brown urged the Treasury to escape from its “comfort zone” and help the UK break out of a low-growth cycle.

Mr Brown told a gathering at the Institute for Government (IfG) think tank that the UK’s productivity growth rate was “lower than at any time since the Industrial Revolution”.

Those in government need to “think with almost military precision about how we can put our economy on a war footing so that we are in a position to solve the problems”, he said.

“Investment in this country is far lower as a percentage of national income than almost all our major competitors,” Mr Brown said. “We cannot govern in the way we’ve been doing if we are going to make this a decade when we can see an economic recovery.”

Mr Brown argued that for the recovery to happen, the Treasury must be more than a finance department focused solely on balancing the books and reducing national debt.

“If it really restricts itself to being a finance department, then to me there is not much hope for the Treasury to be able to contribute to the economic agenda in the way it should,” he said.

“But if the Treasury was working as an economic department ... we have a chance to break out of some of the difficulties that we’ve had in the past.”

Mr Brown was speaking as the IfG released its report entitled Power with Purpose, which called for sweeping reforms at the centre of government, claiming “the UK is a highly centralised country with a weak centre”.

Calling for the decentralisation of power, Mr Major said: “In a democracy, power is safest when it is spread around and if we fail to delegate, we waste rich resources of manpower and experience in every part of our political and administrative system.”

The final report of the IfG’s Commission on the Centre of Government said No 10 Downing Street, the Cabinet Office and the Treasury were not up to the modern challenges faced by the UK, and a small, select group of senior ministers should make the big political decisions before they are adopted by the full cabinet.

The report, which has taken a year to compile, said No 10 was seriously “underpowered” and too easily bogged down in detail and micromanagement. It also said the Cabinet Office had “lost its focus” while the power of the Treasury meant it distorted decision-making “in a way that ripples out across government”.