Bold pro-growth reforms

Next Friday will see the Chancellor, Kwasi Kwarteng, deliver a mini-budget that will set the tone for the kind of government Liz Truss intends to lead. That is why it is imperative that it is bold and sticks firmly to the growthpromoting agenda the Prime Minister espoused in her campaign for the Conservative leadership.

Already, the Left is carping about a possible move to reverse the cap on bankers’ bonuses. It is always easier to play class war than fix Britain’s long-term, underlying economic malaise. So the Prime Minister and her Chancellor will need to be brave and pursue novel, even occasionally unpopular measures. They should take heart from the fact that orthodoxy and timidity have got us nowhere.

They should indeed scrap the bonus cap, as well as the rise in National Insurance and increase in corporation tax. A reworking of perennially unpopular business rates should also be considered. And if Mr Kwarteng really wants to signal the advent of a new pro-growth era, nothing would be better than unveiling now the reduction in income tax which Rishi Sunak had earmarked as a pre-election boon.

While the details of the cost of the huge energy bailout will attract short-term headlines, it is these other measures that may come to be seen, long-term, as most significant. For if Ms Truss’s administration can finally solve Britain’s growth problem, she will have succeeded where countless others have failed. The reward for doing so will be great: if everyone is getting richer, not only will few be bothered about bonuses one way or another, but she will also reap a political windfall of her own.