Our future will be bleak unless we get back on the road to growth

If the people of Britain are lucky, our economy will inch along for the next twenty years, growing at a snail’s pace. If the people of Britain are unlucky, we won’t even get that.

If we end up with Labour, propped up by the Lib Dems, then we can all hope to be doing about the same as we are now, if not worse, in twenty years’ time as our competitors drive on past us.

The sad truth is that we are relying on the global economic weather for our nation’s future growth. As an interesting report from the independent Growth Commission this week shows, it isn’t enough to just hope the sun shines on us – Britain needs to make its own weather again.

We need to take the difficult decisions to get Britain back on the road to growth and regain control of our own prosperity. The legacy of Blairite bureaucracy – high taxes and stagnant growth – is taking money out of your pocket now, and even more in the future.

But it doesn’t have to be this way. I don’t agree with everything that the Commission says but, taking their report as a whole, they reckon we can unlock an extra 23.4% of GDP growth with the right reforms, making the average household £26,200 better off by 2044.

Housing is at the heart of this. Hardworking homeowners have always been the engine of the British economy, but it’s an engine that’s running out of fuel. Our cities are a shadow of what they could be; the restrictive planning system is strangling the supply of new homes – particularly in our city centres – and denying young people the chance to start a family of their own.

By cutting through the red tape, and focusing our efforts on our cities, we can unblock the supply of new homes and get Britain building again, creating jobs up and down the country. Planning reform alone could make the British economy 6% larger by 2044.

It’s not just housing that’s in desperate need of reform; our welfare system needs more work. A system that was designed to help people back into a job, needs to take the next step. Tougher requirements on people claiming benefits would encourage more people into work, cutting the costs to the taxpayer and helping businesses grow quicker.

Common sense policies like these are a necessity. None of this will matter though, unless we give people the freedom to spend their money as they see fit. It’s customers with money in their pockets that make local high streets thrive. It’s businesses with money to spend that hire more workers. It’s hard-working parents wanting to pass on something to their children, who put the hours in to help these businesses succeed.

Our current tax system punishes all of the above. The frozen 40p tax threshold is dragging down disposable income and limiting the amount of money spent in our local communities. The lack of a truly transferable tax allowance means families can’t live life on their own terms. IR35 has hit hardworking contractors and the entrepreneurs that we should be supporting. Stamp Duty stops people from both getting on the housing ladder, and downsizing later. Death taxes are taking the value out of hard work.

None of this is inevitable. By making our tax system family-friendly, we can reward hard work and success, putting our economy back on the path to growth.

Britain’s future need not be bleak, but it will be if we don’t take the tough decisions. With the right reforms, we can all look forward to real, meaningful growth. By growing our cities, getting people into work, and targeting tax cuts to back hardworking families, we can put more money in people’s pockets and look forward to a brighter future.