Britain’s growth calamity: Government’s prioritization of public sector over everything else is madness, says ALEX BRUMMER

There has been so much discussion about fiscal policy, new rules and taxes until the nuggets squeak ahead of today’s Budget that the core purpose of supporting growth is getting lost in the weeds.

Chancellor Rachel Reeves and her colleagues see building more housing and better infrastructure as key to economic expansion.

The evidence from the United States, where I just got off the plane, is different.

The United States, for all its economic dynamism, has a terrible infrastructure. Airports are dilapidated and train service on the key route from Washington to New York makes the much-underrated West Coast Main Line look like a bullet train.

Travel in the United States is so bumpy that it is almost impossible to use a laptop. As for the roads, many are full of potholes and bridges are in urgent need of structural repairs.

In the long term, major infrastructure like HS2 will improve economic efficiency and generate growth at critical points along its length.

The United States’ superior growth rate, which places it at the head of its class among industrial nations, is a consequence of its mastery of technology and innovation.

Elon Musk, with his legally questionable million-dollar gifts to Trump voters, is a politically mercurial figure.

However, its technological achievements increase. Space X’s reusable rocket program seemed like science fiction, but it’s happening. On the streets of Austin, self-driving cars and the new Tesla truck are on display.

Technology must be the key to reviving Britain’s growth. The UK has unique advantages over European competitors.

We have great scientists, technologists, and research universities, and we produce Nobel laureates per capita at a rate equivalent to our American cousins.

Our ability to turn on the “white heat” of technology is greatly weakened. It’s a little late to offer advice to Reeves, but the Government’s prioritization of the public sector over everything else is insane.

The NHS has a huge role to play in unlocking growth. It will not come from increasingly higher salaries for staff, but from implementing revolutionary technology for better monitoring and treatment of patients and becoming a test bed for the UK’s local and overseas pharmaceutical giants.

It is good that the Chancellor appears to have been diverted from plans to increase national insurance (NIC) contributions to employers’ pensions.

This risked being as destructive as Gordon Brown’s 1997 raid on corporate dividends paid to pensions.

Other wealth taxes, including a possible penalty on inherited pensions and limiting lump sum withdrawals, will have their own distorting effect. Reeves needs to make pension fund reform an urgent priority.

Andrew Bailey, governor of the Bank of England, argued to an audience in Washington last week that investment from UK pension funds needs to be unlocked.

As the governor traveled the country, he acknowledged that you are more likely to see Canadian and Australian retirement plans backing Britain than our own.

They have less than 3 percent of assets in the London stock market and a minimal amount in emerging companies or new ventures. Bailey doesn’t believe in “compulsion,” but sees a missed opportunity.

The UK often looks to the Middle East rather than Britain’s £3 trillion pensions giants when seeking new funds to support climate change and other innovative projects. There are signs that the tap is being tightened.

Saudi Arabia’s Public Investment Fund, with $290 billion in assets, is cutting its allocation to overseas investments from 30 percent in 2020 to 18 percent to 20 percent.

Dubai is still smarting from Transport Secretary Louise Haigh’s attack on DP World. Abu Dhabi is reportedly furious at being banned from funding a bid for the Telegraph.

Elsewhere, the Czech Republic is showing more interest in supporting Rolls-Royce’s small modular reactors (SMR) than our own government.

Technology companies are moving forward with SMRs to power data centers. Amazon has partnered with X-Energy, an SMR developer, and Google with US-based Kairos Power.

Britain has the technological means to grow, but is stuck in a morass of inertia that values ​​public space over business.