The desire for economic growth among our political leaders in Britain is limp and lacking in determination. The politics of envy, grievance and moral panic is widespread. Hoping for economic growth in this intellectual environment feels futile.
It is, then, refreshing to see the new book ‘Return to Growth: How to Fix the Economy’, released today, making the case for reigniting growth in Britain. The author is Jon Moynihan, who knows a thing or two about entrepreneurialism, wealth generation and encouraging business start-ups (and hasn’t simply read about these alien concepts in a dusty textbook). It contains as much a moral argument as an economic one for how we get back to growth.
As Moynihan reminds us throughout, it is too easy to belittle the impact of improvements in standards of living over time, which have in fact transformed opportunities for humans to live productive and stable lives. It is that dirty word ‘growth’ which provides the raw ingredient for most things we have taken for granted. A large economy can afford higher per capita spending when providing public services to its citizens. It guarantees standards of living in which wages satisfy more of our needs, wants and happiness. It means new business, new industries and new opportunities for individuals. It enables us to adapt to global events, be they natural, political, economic or technological.
We seem to have a hugely disconnected conversation on economic growth, separated out from the stifling of desire for self-improvement, or the ability to find new and better job opportunities to earn a better real wage for work. Away from the gravy train of state largesse and growth-defeating agendas of HR diversity workshops and green taxes, the UK requires an entirely different view of the role of business in our national life.
The book makes clear that we have allowed EU retained law, excessive home-grown regulation and moral panic to blind our ambition. Consider the decades-long regulation of financial services, healthcare and of the gig economy. Look to the regular licensing of taxi and vehicle drivers. Regulation from GDPR through to cigarettes, through to politicians banning/regulating safe nuclear, hydrogen and fracking which would support a nationally cost-effective energy supply. We are wrapped up in planning regulation prohibiting housing development. All the while, the supposedly virtuous enemies of growth are allowed to succeed. What was so wrong with the cause for economic optimism?
The presence of excessive regulation and over-taxation will only lead to much slower (or no) growth, but there are many solutions from Moynihan. Take corporation tax back to 19%. Remove windfall taxes. Abolish the stamp duty on shares. Reduce national insurance for employees and employers. Reduce VAT to 18%. Reduce business rates. Moynihan has many great ideas – the current Government might consider these proposals by learning from sage, time-tested advice, or as often happens, by the force of the inevitable failure of existing policies.
Our last opportunity to grow even just slightly faster each year in the modern era, as Moynihan warns, has major repercussions for us all, not least the younger generations joining the workforce. If we could have grown our economy faster, we would have been able to offer improved material and financial benefits to workers in the economy, combined with a less destabilising financial picture for our country.
However, ‘Return to Growth’ offers a positive and constructive alternative: the overarching hope is that current and future governments can plot a more effective path to restructure Britain through thoughtful government policies, with low tax, workable regulations and a high-growth economy to deliver a wealthier and freer future which benefits all.
Jon Moynihan’s book ‘Return to Growth’ can be purchased here.
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