Economists argue UK economic growth could be significantly improved with the right policies
Category: Politics
A new report from the Growth Commission, formed by Liz Truss, claims the average Briton is £10,000 poorer than their US counterpart. This report, launched on Wednesday, points out the sluggish growth of the UK economy, which has resulted in a £10,000 gap in annual spending power between the UK and the US.
The report argues that, with consistent growth levels of 3% by 2040, the UK could boost its economy significantly, with households benefiting from an extra £35,000 in spending. The taskforce, led by Shanker Singham, highlighted that the UK is missing out on growth opportunities that are both “abundant and increasing.” However, the report does not provide specific policy recommendations for achieving the 3% GDP per capita growth rate, focusing instead on diagnosing the issues of low growth.
According to the Growth Commission, the UK’s current GDP per capita stands at £36,568, in contrast to £52,996 in the US, highlighting the stark difference in income levels. The taskforce predicts that if the UK achieves 3% annual GDP growth, the economy would be 65% larger by 2040, equating to an additional £15,000 in annual spending per person and a potential £670 billion in additional tax revenue.
The report follows after Chancellor Jeremy Hunt prioritised tackling inflation over tax cuts, disappointing some Conservative MPs who were calling for pre-election tax relief. The findings echo the concerns Ms. Truss raised during her tenure as Prime Minister, where she emphasised the importance of economic growth, particularly in response to what she described as the “anti-growth coalition.”
Singham called the current gap in income levels “shocking,” stressing that the UK must act now to seize opportunities presented by recent technological advances. Fellow co-chairman Douglas Williams expressed hopes that the report would ignite a non-partisan discussion on how governments worldwide can rejuvenate economies and improve living standards for their citizens.
