Labour has no idea how to break Britain’s spiral of decline

The government came into office promising to prioritise economic growth. Now, after their first Budget, I suppose we have some idea of what that means: more borrowing to fund public sector capital projects, and higher tax and regulatory burdens on business. This does not seem very likely to prove a successful recipe, and furthers the impression that this government is likely to fall into the same trap that ensnared its immediate predecessors: managing Britain’s relative economic decline, with no clear idea of how to break out of it.

The biggest single item in the Budget is the £25 billion increase in employer National Insurance contributions. There are a few things to say about this. First, it is a tax on labour income and therefore a tax on workers. (It is also, by definition, an increase in National Insurance – which the government pledged not to increase.) The fact that it is paid by employers makes no difference.