Perhaps the 40-odd years of British politicians handing more and more powers and responsibilities over to Brussels has neutered our political class and rendered them incapable of providing leadership and imaginative policy ideas to grow the economy. Perhaps this has deprived them of the willingness to make tough decisions in the national interest. This new British disease, decline-ism, must be quickly cured.
We have the highest levels of taxation since the end of the Second World War. We have the highest inflation since the 1970s. Our share of world trade continues to decline as exports diminish. The government has failed to take advantage of the freedoms Brexit provides in terms of regulatory divergence and, as a consequence, the curse of recession hangs over us.
To top it all off, the trade union movement is preparing for a summer of industrial action against the government, starting with the railways. While all this is being hurled at British businesses and consumers, our complacent political class only seems concerned with one-upmanship.
The cost of living crisis is having a devastating impact on consumers, particularly the poorest. To survive, businesses have to increase their prices in order to stay afloat and keep people in work. While some of those employees striking this week are earning very good salaries – and grabbing the headlines – many others are not.
Employees in both the public and private sector are seeing their incomes squeezed from every angle. For every pound they spend on fuel the government takes 50 per cent in tax. For every pound they earn, the government is taking more in National Insurance. And 20 per cent of the price of almost all goods and services in the UK is taken by the government in the form of VAT, which it has resisted calls to cut to help with the energy crisis.
Why will the government not immediately allow private firms to explore onshore oil and gas sites, providing energy security and lower prices for businesses and consumers? Rishi Sunak likes to present himself as a low-tax Chancellor; he is in fact a modern reincarnation of the Sheriff of Nottingham, taxing the people until their purses are empty.
All of these problems facing the UK are due to the fact that there is no serious plan to grow the economy. As a consequence, we are facing the biggest squeeze in living standards since the War with conditions only set to get worse.
We need the government to announce major tax cuts, such as those proposed by the Independent Business Network, to put money back into the pockets of individuals and businesses and to provide a massive stimulus to the struggling British economy.
The government has said it will ensure regulations on future and emerging industries are light touch to attract investment and foster competitiveness. But it has done nothing to lift the regulatory hangover from our membership of the European Union. Estimates have shown that by deregulating the British economy we could add up to 2 per cent to GDP. Above all, we must make more in Britain and increase our exports to reverse our shrinking share of world trade. Making it profitable to invest in manufacturing through a competitive exchange rate policy is key to creating well-paid jobs.
We are at a crossroads at a key moment in our history. The world is becoming less safe and global competitors are emerging. The UK is still one of the best places in the world to do business and the British people are some of the most dynamic and entrepreneurial, with a buccaneering spirit. Employees do not want to strike, they want to work. We need a government that creates conditions where work is worthwhile and where individuals and businesses can thrive. Our present difficulties could be overcome if we had a government with the imagination and strength to commit to the radical change we need.
Brendan Chilton is CEO of the Independent Business Network.
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