Whisper it, but things finally seem to be looking up. Investment is rising, unemployment is falling, and the deficit seems to be coming under control. But it could be a lot better. Real wages will not recover to their pre-crisis peak until 2020. And expected growth of 2.7 per cent this year is well below what we might expect in a real recovery.
The question is, how can we get the strong growth we all want? Tax cuts are nice, but hard to sell as long as the deficit remains large. And calls for business deregulation are often too vague to be useful. But there are clear areas for reform in planning, immigration, and money, and none would threaten the deficit. Reform these areas – the PIMs, we might call them – and real, booming, sustainable growth will come.
In today's City AM I outline a fairly simple growth agenda that would, I think, deliver very strong growth without requiring tax cuts (which are very important, but seem to be politically dead in the water right now). My three items are reform of planning, immigration and money (the 'PIMs', as I call them), by rolling back the green belt outside London, allowing high-skilled immigration, and targeting NGDP instead of inflation: