Public spending within the new fiscal programme

UK public spending is a massive 40% of GDP, and yet its effectiveness is constantly in dispute, whether in health, education, policing, or almost any area of public involvement. Yet the technical ability of central agencies to communicate and use information efficiently now exists, and with it the ability to coordinate decentralised efforts. Ideas for devolving areas downwards to communities could therefore be widely explored. The ultimate job for government is to remove the obstacles placed by tax and regulative policies on business formation by entrepreneurs. Regulations periodically need to be scraped away to prioritise the business freedom on which our growth and prosperity depend- as illustrated by the Thatcher revolution- see chapter 3 and appendix. A major challenge is to bring the North’s income up to the level of that of London and the South. The policies that will work to generate growth in the North are the same as those that will generate growth across the whole economy. Our new Regional Model finds that general policies cutting taxes and regulative intervention have the biggest proportional effects in the North, because there is less congestion there in resources, both labour and land. There is therefore no contradiction between stimulating the economy as a whole via supply-side policies and ‘levelling-up’.