The Chancellor had another go at presenting a growth strategy yesterday in her second Mais lecture. It was no more successful than her first, which had been all about stability and keeping the deficit down!
There were three major flaws in the argument. Aligning ourselves more closely with the EU will slow our growth further, not increase it. Trying to back winners in new technology whilst taxing and regulating the main US drivers of the AI revolution will not boost growth of that sector, which is one of the main overall drivers of growth generally. Relying on more borrowing to support more public investment will not bring forth growth and will waste capital.
The EU error is the worst. As I have set out recently our growth rate tumbled after we joined the EEC, and fell again as they completed their over regulated single market. The last things the UK economy needs are higher taxes, higher energy prices and more regulations, yet that is what the re set will bring.
The whole re set will cost us big money which will either have to be borrowed or raised in additional taxes. The gift of our fish for the next twelve years condemns us to not growing our fishing and fish processing industries. The bad deal on Erasmus removes the chance of support for UK students to attend non EU universities and the Youth Opportunity scheme puts more pressure on jobs and homes for young people at a time when both are scarce.
The substantial spend on quantum computing comes with no detailed analysis of what the state could spend on in this area that would yield a return. The general enthusiasm for public sector investment ignores the recent cross party disasters of the Post Office computerisation, HS 2 and Councils buying shop properties as investments in time for the big decline in rents and values.
A proper growth strategy would start by lifting the bans on oil, gas and petrol car manufacture. It would remove excessive green and carbon taxes, drive for much lower energy costs and cut taxes on employment and small business. All this could be paid for by substantial cuts in public spending as set out on this blog or by adopting the Conservative party £47bn reduction plan. Cutting business tax would increase the revenues.
March 18, 2026
as trump says the UK needs to drill, drill, drill and deal with the massively out of control immigration situation.
they are the top 2 priorities.
public sector spend to generate IP will only result in that IP leaking to India where they will undercut us.
massive inefficiency in the public sector needs tackling.
yes we need to revitalise our own fishing and manufacturing, with radical regulatory changes to be far more pro British.
March 18, 2026
The common sense economics generally shown here somehow doesn’t find it’s way into the Guardian reading middle-class electorate, why is that? Reeves offer makes sense because she’s appealing to this part of the electorate, who are driven by ideology. The Green, Social Democrat/Labour folk who think cuddly ideals and open doors to criminals will all work out lovely in the end. Starmer just wants to make the rules fo these people and tell them what to do. If they are the majority then we are a dying race. We’re running out of time and resources to fix it.
March 18, 2026
Conservative £47 billion savings then right out of the Reform manifesto.
Alignment withbthe EU is ideological not intended to bring growth. Starmer was the leading advocate of a second referendum and now he’s dancing to his handlers tune.
I just hope the bond vigilantes put an end to this out of control excrement show in Westminster.
The country can’t afford 3 more years of this sabotage.
March 18, 2026
Somebody has to make the obvious riposte so hear goes. There is no growth strategy but there is a no growth strategy.
March 18, 2026
Exactly they do a growth, growth, growth rain dance but every single policy they push is very anti-growth.
The last two Jacob Rees-Mogg videos and the latest Telegraph one are all good on this topic.
For growth ditch net zero, a bonfire of red tape, do not realign with the EU, cut taxes, stop the doom loop anti-growth agenda.
Also anti-growth is a total lack of confidence in the country which you get with people like Two Tier, Reeves, Lammy, Phillipson, Cooper Balls and energy, economy and defence vandal Miliband in charge!
March 18, 2026
Labour paid for lawyer to advise on Angela Rayner’s tax affairs. A leading barrister was asked to examine whether she underpaid stamp duty. Jonathan Peacock KC spent up to five days examining Rayner’s finances.
What a crazy tax system if you need five days of a KC to decided what stamp duty is due on buying a house!
No I suppose they will need another 5 days or so to decide if this is a benefit in kind for Rayner and income tax and NI is due from her on this fee paid for by the Party. Assuming she was given a copy?
But if it take five days of a QC we can hardly blame Ange or even her property lawyers for for getting it wrong can we. Will Labour publish this advice – I assume not!
Tax does not have to be taxing advertise HMRC a blatant lie. Why has the ASA not banned this blatant lie. Taxing in money, admin. costs and time so three times over. Now they have another hammer making tax digital starter under the xxx. Socialists.
March 18, 2026
I doubt if the KC needed 5 days to decide IF tax was due. He/she probably needed 5 days to work out what the best defence position would be.
March 18, 2026
It didn’t need 5 days, but the Barrister, on the Taxpayer squeezed 5 days wages out of us.
March 18, 2026
So Miliband want people to drink warm beer and drinks now to save energy. But he is the one pushing heat pumps for heating! This is exactly what beer and drinks chillers do. Take heat from the drinks and generally use it to warm the pub.
Seems he is only in favour of some heat pumps for heating. But then the economic, energy and defensive vandal is a PPE grad so this thought process is probably way beyond him.
Heat pumps rarely make much sense in the UK – yes you might get two to three times the heat for each unit of energy put in but that energy is electricity which costs about three times as much as gas. Plus you have the winter demand issue. Much perhaps 10+ times more heat is needed on the cold days and this is when heat pumps are least efficient (On COP factor) so you need huge extra electricity generating and grid capacity just for winter wasted the rest of the year. You get virtually no solar in winter so if you want it from renewables you only have wind but you might need 10 times as much on cold days if we are go to heat pumps so this expansive capacity, grid capacity and backup capacity will largely be wasted for most of the year. For hot water heat pumps are even less efficient!
Miliband probably has not thought this through either!
March 18, 2026
Not a NO growth policy but actively – anti-growth from top to bottom!
March 18, 2026
On a more serious note, the three flaws you list, Sir John, are all in Economics 101. Surely at least one senior person in the Treasury knows them? The point is that this is not about economics at all. It is ideological: it is anti-market, anti-capitalism, anti-individual choice, anti-individual enterprise, anti-individual responsibility, anti-nation state, anti-patriotism, anti-Christianity in the name of Fabian socialism and Marxism. Starmer has confessed to being a Trotskyite and that he wants UK to be so close to the EU there is no difference. Starmer’s Gang see the EU as a step towards the global sociaism they truly believe in. What they say in public is sheer propaganda. They talk about improving the economy to pacify the public but they really do think all the disadvantages of EU membership that you mention are a price worth paying to move UK along the path to a socialist world order. They don’t want anything else of UK apart from demolition of the barriers to global socialism.
March 18, 2026
Must be as surely the ministers and advisors cannot really be that thick can they? Same with the lunacy of Net Zero and “renewables” surely they must have one or two competent and honest engineers or physicist to explain reality to them!
They employ a tax KC for thousands for Rayners SDLT tax issue I would explain reality to them for free as would/do many others. Prof. William Happer for example and that Eigen Values chap!
March 18, 2026
Doubtless they would insist on a woman or minority though – Kathryn Porter is sound and honest an independent energy consultant. She holds a Master’s degree in Physics and an MBA, and is an associate member of the All-Party Parliamentary Group for Energy Studies executive council.
March 18, 2026
Well put.
March 18, 2026
You write about Fabian Socialism but this Labour government is simply following the high tax spend and welcome immigrant policies that Conservatives implemented for 14 years.
They have changed their tune now they are out of power but what guarantees do we have that they will not revert to type if they get back in.
We need someone to govern for the contributors not the hangers on but the problem with doing that is it hastens the moment that the client state reaches for the pitchfork.
March 18, 2026
Good morning.
AI is the latest fad now that the Green Revolution seems to be running out of energy. /sarc
For AI to work you need massive data centres. These require large amounts of energy and water for cooling. Once again we are throwing good money after bad.
March 18, 2026
It needs cheap reliable electricity, the water is not so much of a problem it does not have to be used up can be recycles as (usefully) can the “waste” heat in winter especially if well designed. Miliband’s agenda gives us intermittent, unreliable electricity at 4 times the US cost!
March 18, 2026
Never mind Mark, we are building a Fusion Reactor on the site of West Burton power station. We all know it won’t work but hey ho £ 200 billion should sort it.
I worked at Dounraey in the 60s and we were 30 years away, 60 years later we are still 30 years away.
March 18, 2026
@Mark B – ah but, the Secretary of State for ‘Energy Security’ has promised unlimited cheap(cheaper than those we compete with) energy, to make the UK Competitive on the World Stage. After-all as Secretary of State for ‘Energy Security’ he wouldn’t believe the UK having high cost energy would make it competitive and able to keep up…..
March 18, 2026
Miliband, through his renewable devotion, has effectively “dug himself into a hole” from which he cannot possibly emerge. Nothing will change him and whenever I have seen him on TV he almost seems demented waving his arms around so doubtless he will be the same meeting other ministers.
March 18, 2026
Two comments:
I) AI is developing in a way which is resulting in coding being achieved much faster and more cheaply than was previously feasible. This means that businesses are developing potentially transformative products with a much lower capital requirement for product development.
II) UK VC firms are not generally interested in financing product development, preferring to invest when sales are being achieved ie preferring to deliver scale-up capital.
III) it has long been recognised that the UK has a dearth of patient capital.
It seems to me that the solution to the above comprises a) harnessing private investors and b) re-introducing significant taper relief for tax on realised profits on securities held for more than 5 years – a benefit of this approach would be no upfront cash cost for the Government.
March 18, 2026
There is a growing belief in the mind of the public, this Labour government uses the words they know will convey a desirable message, while actively pursuing their policy of nation destruction. The constant suggestion of policies for growth, belies the actual truth of what is happening. Reeves claims to be pursuing an expanding economy, yet she introduces policy that continuously damages growth industries. Higher taxes, destruction of business continuity, penalties for employing people, restrictions on business expansion without state authority in the form of licences or permissions, all these stop growth. Private enterprise is being blocked while taxation is used to support unproductive public expenditure projects. Our essential roads are allowed to decay while HS2 consumes yet more £billion on a rail line few will ever use. The only feature in our economy driving growth of any sort is an increase in population by importing more people. That type of growth is positive GDP (Just) but at the cost of massive additional borrowing.
Reeves is aided and abetted in the ongoing national destruction by her fellow cabinet minister Ed Miliband. Incredibly she has just green lighted borrowing of another £2.5billion to throw into the fusion development pot. Ed has announced there will be a working power plant on the once very productive coal fired power plant at West Burton Nottinghamshire by 2040. This ongoing drive for fusion power is consuming huge investment in time and money and has been doing so for 70 years. We are no closer to commercial scale fusion power today than we were in 1955. Why Miliband thinks he can achieve commercialisation in the next fifteen years is anybody’s guess.
Why are they so determined to block one of our most important industries and revenue generators North Sea energy.? Why do they shun the tax revenue from that, and why do they shun the energy security it would provide?
March 18, 2026
There is no growth strategy; there never was. Their primary objective is to completely align us with the EU, in order to justify rejoining.
Everything they are doing is to try and accomplish their primary objective.
Perhaps, if we’d had a Government between 2016 – 2024 which delivered LEAVE; hadn’t turbo-charged Net Zero; hadn’t flooded the country with 3rd world immigrants and hadn’t shut down the economy for 18 months over a bad ‘flu, they wouldn’t be in a position to do it.
March 18, 2026
Hello Lord Redwood
“That’s no growth strategy” in the eyes of this Parliament you are completely wrong, there has been growth in State expenditure, there has been growth in tax & borrowing, there has been growth in sending money out of the country to appease, ingratiate foreign governments.
What there isn’t is the wealth creation to pay for it all.
March 18, 2026
Wouldn’t the flaw be, that if the UK ‘drills baby’ as suggested the PM & Parliament would hand the output over to the EU
March 18, 2026
is pure dichotomy.
Socialists must go to bed dreaming of new ways to introduce taxes – no doubt they get a warm glow out of imagining the fair society they are creating by making everyone equally poor and dependent on the state for their survival.
They are certainly perplexed by technology or they would dig into it’s possibilities before throwing huge sums at it, but I don’t imagine our Chancellor has ever created a business case for anything, never mind in her present role.
Tax and spend really does sum up labour – they have no worthwhile attributes.
March 18, 2026
Donald Trump “I’m disappointed with PM Starmer” – aren’t we all?
They had some minister on TV saying they were paying £3,000 or so to “create jobs”. We’ve seen before that these same jobs probably disappear when the subsidy stops. Are they mad when they say they are creating jobs. The only jobs they create, for example, is if they start a war and enlist people to fight it.
Government is there to create the conditions which will provide growth and jobs and thus far Labour falls woefully short.
March 18, 2026
Lord John, I am sure that our PM and Chancellor agree with everything you’ve written because as Fabians they understand that since socialism depends upon making and keeping people poor they do not want to see any growth other than the growth of government, the civil service and the judiciary. Net Zero continues to sabotage our industry and economy to the enormous benefit of China and it only remains a mystery to me how much support Labour still receives from the Unions despite these Fabians efforts to de-industrialise and destroy their members’ jobs. I’m sure the research on quantum computing is again to assist China whose 150,000 “students” in our universities will have the access to all our research and development projects. Quite possibly a condition requested by China in our SoS’s secret Net Zero deal with China in order to be supplied with our Net Zero infrastructure built using China’s cheap, CO2 emitting coal and quite possibly employing slave labour.
March 18, 2026
“It [a proper growth strategy] would remove excessive green and carbon taxes, drive for much lower energy costs and cut taxes on employment and small business.”
The cost of our energy is now all a far cry from the 2021 ‘Net Zero Strategy – Build Back Greener’, which stated on p19: “Our power system will consist of abundant, cheap British renewables, cutting edge new nuclear power stations, and be underpinned by flexibility including storage, gas with CCS, hydrogen and ensure reliable power is always there at the flick of a switch. This 368 page Net Zero Strategy document has now become the longest suicide note in history and its purpose was always to cause de-industrialisation and hence poverty using the false belief that increasing atmospheric CO2 will somehow cause the planet to overheat and the oceans to boil.
March 18, 2026
As the latest interview by Liam Halligan confirms, the British car industry is shrinking rapidly from its successful recovery under Mrs Thatcher to a point where Chinese products will completely dominate by 2030. The decision to remove tariffs on Chinese cars while penalising British manufacturers who are unable to sell unpopular electric cars and vans is already resulting in 10% of sales going to China. The only conclusion must be that this deluded government does not care if our manufacturers close because it transfers CO2 off our books, while it increases worldwide, and that cheap electric cars are the main priority. They have already started to put bigger incoming mains into houses in order to charge then while running a heat pump.