A liberal growth agenda for the UK
This is not liberal in the sense of Liberal-Democrat, but liberal in the sense of promoting freedom. The core liberal diagnosis is that the British state has crowded out private dynamism through taxation, regulation, and monopoly provision of key services. Its agenda stems from that insight.
There should be a flat tax on income. The current multi-rate system should be collapsed into a single rate (perhaps 20%) with a high personal allowance (£20–25k) that effectively exempts the poor. This would eliminate the complexity that consumes billions in compliance costs and distorts behaviour at every margin.
Corporation Tax should be abolished entirely. It is ultimately borne by workers and consumers, and abolition would make the UK the most attractive destination for business incorporation and capital deployment in the developed world. The lost revenues could be replaced through consumption taxes, which are less distorting.
The VAT threshold should be dramatically raised. It is currently set so low it actively prevents small businesses from scaling up. Raising it to £500k+ would unleash a vast layer of micro-enterprises currently frozen just below the threshold to avoid the compliance burden.
Inheritance tax should be abolished. It is double taxation and punishes capital accumulation across generations. At a practical level, it locks up family business capital in unproductive estate planning.
Stamp duty, capital gains tax on productive assets, and dividend tax are all taxes on capital returns that reduce investment at the margin. Removing them would see capital flow in.
The minimum wage should be repealed, or at least radically devolved to regional levels, since a wage floor set for London destroys employment in Sunderland. Labour markets should be allowed to clear at local rates.
We should move to unilateral free trade, abandoning all remaining tariff and non-tariff barriers regardless of reciprocity. We should import cheap food, energy, goods, and materials, Consumers would gain immediately and inflation would fall structurally.
Planning permission should not be needed as a general requirement. It should be replaced by a liability system. You can build what you like, but you bear full legal liability for harm caused to neighbours. This is Coasian bargaining rather than bureaucratic gatekeeping.
Financial services need to be radically deregulated. The post-2008 regulatory accumulation has made London's financial sector significantly less competitive. We should strip it back to fraud prevention and basic disclosure requirements.
The Climate Change Act obligations need to be revisited. At a minimum we should remove the mandates and subsidies distorting energy markets. We should let energy prices reflect genuine supply and demand. This would accelerate investment in whatever actually produces cheap, reliable power.
Every child should receive state educational support at current per-pupil spending (roughly £7–8k), payable on their behalf to any registered school, public or private. This would break the state monopoly on education, drive up quality through competition, and eliminate the postcode lottery.
NHS competition and pricing should be introduced, bringing genuine price signals and competition into healthcare. We should allow insurers to compete, allow providers to price, and allow patients to choose. The current system rations by queue; a market system rations by price but generates the investment and innovation that expands total supply. This would save and improve the NHS.
The BBC, Channel 4, and all remaining state media should all be privatized. There is no justification for state-owned broadcasting in the internet age. Licence fee abolition alone would be a meaningful tax cut for every household.
We should sell the remaining state asset portfolio, including land, commercial property, and public sector pension liabilities. They all represent claims on future taxpayers. We should monetise them and use proceeds to cut taxes or reduce debt.
Through attrition, voluntary redundancy, and genuine elimination of functions we should shrink the civil service by a third, The Whitehall machine has grown substantially without visible improvement in outcomes. We should reduce it and push functions out to markets or local government.
An independent or rules-based monetary policy should be put in place, ideally moving toward a monetary rule (NGDP level targeting or even a currency board) that removes discretionary central bank intervention. We might even look at free banking, abolishing the Bank of England's monopoly and allowing competitive note issuance.
Bank bailout guarantees should be done away with. Deposit insurance and implicit too-big-to-fail backstops create enormous moral hazard. We should remove them and let banks self-regulate for solvency.
We should ease immigration controls for skilled workers. Those who can support themselves and are needed at the high skills end should be admitted, giving the economy the workers it needs.
We should abolish all occupational licensing beyond genuine safety requirements. The UK requires licences for hundreds of occupations, from taxi drivers to interior designers, where the primary effect is to allow incumbents to suppress competition.
There would be transition pain. Removing planning controls, minimum wages, and NHS guarantees simultaneously would create real short-term disruption and losers.
Such a genuine liberal growth programme would produce very rapid growth, however, with capital inflows, business formation, and immigration of talent, alongside significant distributional disruption. The UK would look more like Singapore or pre-intervention Hong Kong than contemporary Europe. But it would lead to massive and sustained growth, the rising tide that raises all boats, and the wealth that could allow us to afford better things.
Madsen Pirie