Top economists urge action for growth

The experts are behind a "manifesto for growth" which demands investment in transport, energy and house building schemes.

This evening's launch is the conclusion of the London School of Economic's growth commission which sets out to end "political procrastination."

The commission's co-chairman Professor Tim Besley said a "bold and decisive strategy with an approach driven from the heart of government" is required to end austerity.

Improvements in education also feature highly in the report which calls for "better buildings, smaller class sizes, higher wages for teachers."

The report states that "improved education for the disadvantaged has a double dividend" which will reduce "endemic" inequality and boost the economy.

TUC general secretary Frances O'Grady said the report echoed calls the TUC had been making for several years, including for "greater investment in schools and apprenticeships to a new business bank to support SMEs (small and medium enterprises)."

She added: "While we don't agree with all the proposals, the main thrust of the report - that government should take centre stage in a drive for growth - is absolutely right."

Campaigners also cautioned that elements of the commission's manifesto for growth does remain linked to discredited boom and bust policies.

Left Economics Advisory Panel co-ordinator Andrew Fisher rubbished claims in the report that one of the issues stopping growth is "insufficient competition in the banking system."

Mr Fisher told the Star: "The LSE report identifies some of the key long-term problems that have stifled growth - lack of infrastructure investment, the failure of banks to fund new business, and even inequality.

"To achieve their aims, the banking system needs to be publicly controlled, as per TUC policy, not merely made more competitive.

"Despite identifying inequality as a fetter on growth, the report endorses 'flexible labour markets' and advocates nothing to redistribute wealth."