It is a significant moment, when senior economists write to the Sunday Times warning that we need to cut the deficit to sustain the recovery. It is even more important that they think deficit cutting should mainly come from spending cuts, not from tax increases. They delphically warn that some tax increases on employment and investment could make things worse.
This government’s tax increases already threaten us with less investment, fewer companies staying here, and fewer entrepreneurs taking risks here. We need tax and regulatory cuts to favour company investment and more enterprise to have a chance of growing our way out of some of the financial trouble we are in. Our corporation tax regime is now a threat to jobs, and the new higher income tax rate will add to the grief. When I first warned of a coming financial and business crisis and the UK’s growing lack of competitiveness in 2007 it was a fairly lonely position. Today it seems at last to be mainstream. Now we need a government to do something about it.