Economic growth has become the defining issue of our time. After years of stagnating productivity, squeezed living standards, rising taxes and ballooning government debt, the key question that our politicians are grappling with is whether we can reverse this decline and kickstart economic growth once again.
This centrality of this to our politics is evidenced by the fact that this evening, the O2 will not be headlined by a pop-star or rock band, but by rising stars from across the political spectrum – the Labour MP Chris Curtis, the Conservative MP Katie Lam and my former campaigning partner Dominic Cummings – under the headline of ‘Looking For Growth: Make or Break’.
That question also lies at the heart of ‘Prosperity Through Growth’, my new book published today, co-authored alongside Arthur Laffer, Lord Hintze and Douglas McWilliams.
Its argument is simple: Britain has a proud heritage and economic history, but for much of the past two decades, Britain has been caught in a cycle of low growth and high dependency.
‘Prosperity Through Growth’ offers a blueprint for reversing this decline and restoring our economic dynamism. The book’s 24/7 Growth Plan sets out a strategy to put growth at the centre of government. It’s a call for a national mission to make Britain once again the best place in the developed world to work, invest and build a business.
The 24/7 Growth Plan begins with the fundamentals. Britain must make work pay by reforming taxes to reward effort and encourage enterprise. We propose moving to a flat tax over time, replacing all income and employment taxes, including capital gains tax, with a single flat rate. Corporation tax would be slashed, and stamp duty would be abolished.
Welfare would be put on a more solid foundation, by freezing payments in real terms and adjusting future increases to the state pension to ensure long-term fiscal sustainability. Public sector productivity would be boosted through reducing the size of the civil service and streamlining bureaucracy.
Next, we must build Britain. Infrastructure delays and planning gridlock are holding back growth in every region. Our plan calls for streamlined approval processes, accelerated delivery of energy and transport projects and a planning system that enables homes and commercial space to be built where they are needed most.
We should adopt Smart Net Zero, making UK energy prices globally competitive through faster rollout of new nuclear projects and scrapping carbon targets. This would help allow our manufacturing sector to rebuild after years of decline.
Each of these pillars is grounded in policies that can be delivered within a single parliament. Our proposals are fully costed, and forecasts suggest that they would increase GDP by an additional 7% over five years, and nearly 30% over twenty years. This would take UK GDP per capita from a projected £56,168 to £72,344 by 2050.
None of the proposals rely on vast new spending or unrealistic promises. They rely instead on creating the conditions in which people and businesses can thrive, a growth strategy built on backing the role of the private sector to be entrepreneurial and generate wealth.
This autumn’s Budget will test whether the Government understands the urgency of that mission. Britain cannot tax or borrow its way to prosperity. The only sustainable path forward is through higher productivity and stronger private-sector growth. That means shifting the focus of fiscal policy away from short-termist, hole-plugging tax rises and towards long-term wealth creation.
There is now cross-party consensus that economic growth must be the North Star of any government, but this still requires a clear plan and strong leadership.
For the book, former Chancellor, George Osborne told us that:
I would prioritise economic growth. But when I say prioritise for economic growth, I mean take the necessary hard decisions to put prioritising enterprise, business development, business expansion and wealth creation over other goals that you have in a society.
Osborne’s boss at the time in Number 10, David Cameron, told us:
We’re in a situation of genteel decline – people just putting up with 1% growth. We’re effectively getting poorer, but we’re pretending we aren’t, and we need to convince people it doesn’t have to be that way. But we need to convince people we’ve got a very clear plan.
And Tony Blair told us that he is convinced that economic growth is a perfectly sellable proposition that the country wants, and that if mainstream parties don’t deliver this, challenger parties will instead dismantle the system.
As we look ahead to the Budget, the choice could not be clearer. We can continue with managed decline, or we can seize the opportunity to rekindle enterprise, reward ambition and renew confidence in Britain’s economic future.
It is time to put growth first, because only through growth can we secure the prosperity Britain deserves.
‘Prosperity Through Growth: Boosting Living Standards in an Age of Autocracy and AI’ is published by Biteback. You can order the book on Amazon here.
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