An economy built on shopping...

BRITAIN has to stop leaning on the consumer to prop up its economy and the Chancellor must use his Budget this week to take some dramatic steps to help us do that. Last week saw yet another batch of figures showing households borrowing ever more money to fuel consumption. Credit card debt for example has hit £66billion.

Consumer borrowing is showing signs of easing, but it is still rising at 10 per cent a year and is essential to our recent economic growth. But we cannot keep expecting our addiction to shopping to bail out the economy. The single most important change needed is an improvement in British productivity. A British worker takes five days to produce what a French or German worker produces in four. This is not a reflection of hard work but of the levels of skills, technology and infrastructure in our business and economy. So we need the Chancellor to invest – in skills and education, in infrastructure and in the incentives to business investment.

The Chancellor has some head room in his Budget, thanks to recent strong tax receipts and there are some clear immediate priorities, such as softening the business rates blow to small firms and acting on social care.

But many expect the Chancellor to hold back on other major steps, keeping some powder dry to cope with any problems caused by Brexit. He should not. Boosting productivity and infrastructure in the UK are essential to our prosperity, whatever the outcome of the Brexit talks. It will never be too early to start.

This will cost money and may even require the Chancellor to delay the date when the public finances will balance. Even so he should have the courage to spend. We can depend on Government investment and, yes, perhaps borrowing to build a productive modern economy – or we can keep treading water by maxing out our credit cards. THE Government looks set to scrap its controversial appeals process for business rates – a system that would have meant thousands of appeals being rejected out of hand. It is a small victory for those including The Mail on Sunday who have campaigned against the current state of the rates system.

A complete review is needed, but so are some immediate measures. My own favourite suggestion (made by Virgin StartUp last week) is to set a revenue threshold on rates under which no company with a turnover of less than £300,000 a year should be liable to pay business rates at all.

Go on Chancellor, you know it makes sense.