My party agreed that we needed to stop drifting in the direction of a higher-tax, higher-spend economy being choked by ever more regulation, which was causing sluggish growth, low productivity and a dampening of enterprise and innovation”. Thus wrote former prime minister Liz Truss last week.
As with so much in economics, chickens and eggs spring to mind. For political reasons, Truss might well want a lower-tax and lower-spend public sector, but the evidence that doing so will trigger a growth and productivity revival is, to say the least, limited.
