Candidates such as Liz Truss are right that growth should be the next PM’s priority. UK productivity improvements have been anaemic since 2008, behind only Italy in the G7, leaving us 25 per cent poorer relative to our pre-financial crash trend. Even if that path was unrealistic, we can’t be content remaining 15 per cent less productive than the United States or France, particularly with the Office for Budget Responsibility predicting slow growth for decades. Weak growth means lower wages, higher deficits and nasty, zero-sum politics.
Thankfully, better policy could boost growth, or at least the level of GDP, without compromising tax revenues or requiring vast new outlays. Relaxing arbitrary green belt designations and building density and height restrictions around the UK’s most productive cities could deliver more new housing construction. Cheaper homes, more permitted business development and lower industrial rents would allow workers to move more easily to better jobs, densify industrial clusters, and drive down costs for important sectors such as social care and supermarkets. The result would be higher productivity, delivering lower consumer prices or higher wages.