When the new government doubled down on making faster growth its main aim I was delighted. When they boldly said they would make the U.K. the fastest-growing economy of the G7 I was surprised.
So far this century the US economy has greatly outperformed all the leading EU economies and our own. We have watched as their unique blend of fast growth in high-earning domestic oil and gas production alongside brilliant world leadership in everything digital, great financial and business services, innovative health companies, and world-leading defence supplies has ensured their productivity and growth rate far exceeds European levels. The U.K. economy will take radical changes in so many areas to grow faster.
Now we are out of the EU we could outgrow the US from our lower base, but it would require changing many rules and policies we took on as EU members and have continued with since Brexit. We would need to drill many more wells to find and produce more oil and gas, We would need to allow our auto industry to judge its output of ICE and electric vehicles according to demand. We would need to simplify and internationalise our financial and business regulations. We need to copy the Joe Biden/Donald Trump common policy of onshoring industry to the U.K. instead of shutting it down and importing as we do today following EU carbon rules and taxes. We would need to follow fishing and farming policies that maximise domestic food output instead of giving quota abroad and paying farmers not to farm.
What is worrying is how the government is announcing announcements that will impede growth, not boost it. They have decided to stop new oil and gas licences, accelerating the decline of a high value-added well paid jobs sector so we import more. They have speeded up banning our successful automakers making more diesel and petrol cars that people want to buy. We will be importing lots of nearly new ones instead no doubt.
They have placed a new tax on our best private sector schools, limiting their domestic pupils with the danger of closing the weaker ones down. They have set out punishing taxes for rich people who used to come here to spend money, create jobs, and invest so there will be a continuing exodus of money and investment from the U.K. They have announced completing nationalisation of the railway which will likely lead to more losses and service cuts. It has already led to cancelled capital investments needed to improve services.
They have kept in place the failed bond sales programmes of the Bank of England, in a jointly agreed portfolio between Bank and Treasury. These result in huge taxpayer subsidies to the Bank starving more deserving causes of cash. They have decided to start cutting some public investment programmes including the A303 and A 27 road improvements.
They have hinted at more tax rises to come, probably aimed at savings and investments, the very things we need more of to invest in growth. They have awarded well above inflation rises to the public sector without pressing for productivity improvements that could help pay for them. The collapse of public sector productivity since 2019 is a major cause of poor U.K. growth this decade.
To get the U.K. on track for faster growth we need supportive and positive policies for more sectors. We need better public sector leadership to get up to 2019 levels of productivity rapidly and then establish a sensible trend of growth. We need lower tax rates and fewer taxes, especially on small business, the self-employed and on saving and investing. The Government must show it loves and promotes enterprise more. Then faster growth will come and with it the additional tax revenue for good public services and higher real incomes for many.