The Chancellor's Post-Pandemic Choices

Abstract

Conditions for growth are not a mystery. This paper examines the UK’s historical record and identifies the best-performing periods in the past 40 years under two criteria: rising real government revenue and rising labour productivity. It subsequently reviews the economic policies, which facilitated these golden periods, centred around 1993-2003. The policies that spawned these successful periods have a proven track record and can form a practical basis for policies to achieve growth now. The regulatory burden on all productive sectors was much lighter than in 2020. The best performing periods had less financial and labour market regulation, more targeted health and safety regulation, and much less energy sector regulation. But if the government is serious about pulling the UK out of its current financial and economic position, the evidence presented here should weigh heavily on its decision-making.