Britain’s progress calamity: The Government’s prioritisation of the general public sector over all else is bonkers, says ALEX BRUMMER

There has been so much discussion about fiscal policy, new rules and taxing until the pips squeak ahead of today’s Budget that the core purpose of backing growth is lost in the undergrowth.

Chancellor Rachel Reeves and colleagues see building more houses and better infrastructure as keys to economic expansion.

The evidence from the US, from where I am just off the plane, is different.

Construction drive: Chancellor Rachel Reeves and colleagues see building more houses and better infrastructure as keys to economic expansion

The US, for all its economic dynamism, has terrible infrastructure. Airports are dilapidated and train services on the key route from Washington to New York make the much disparaged West Coast Mainline look like the bullet train. 

The US ride is so bumpy that it is almost impossible to use a laptop. As for the roads, many are potholed and bridges are in urgent need of structural repairs.

Over the longer haul, great infrastructure such as HS2 will improve economic efficiency and create growth at hot spots along its length. 

The US’s superior growth rate, which places it top of the class among industrial nations, is the consequence of its domination of technology and innovation. 

Elon Musk, with his legally questionable $1million-giveaways to Trump voters, is a politically mercurial figure. 

However, his tech achievements mount up. Space X’s reusable rocket programme looked like science fiction but it is happening. On the streets of Austin, autonomous cars and the new Tesla truck are in evidence.

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 churn out Nobel prize winners on a per capita basis at a rate which matches our American cousins. 

Our capacity to ignite the ‘white heat’ of technology is hugely denuded. It’s a bit late to offer advice to Reeves, but the Government’s prioritisation of the public sector over all else is bonkers.

The NHS has a huge role to play in unlocking growth. It will not come from bunging staff ever higher wages but from deploying game-changing tech for better tracking and treatment of patients and becoming a test bed for the UK’s home grown and overseas pharma giants.

It is good that the Chancellor appears to have been deflected from plans to ramp up national insurance (NICs) on employer pension contributions.

That risked being as destructive as Gordon Brown’s 1997 raid on the corporate dividends paid into pensions.

Other taxes on wealth including a potential 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, the governor of the Bank of England, argued before a Washington audience last week that UK pension fund investment needs to be unlocked.

As the governor travelled the country he recognised one is more likely to see Canadian and Australian superannuation schemes backing Britain than our own. 

They have less than 3 per cent of assets in the London stock market and minimal amount in start-ups or new ventures. Bailey doesn’t believe in ‘compulsion’ but sees an opportunity lost.

The UK often looks to the Middle East rather than Britain’s £3 trillion pension behemoths when looking for new funds to back climate change and other innovative projects. There are indications that faucet is being tightened.

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

Dubai is still smarting from Transport Secretary Louise Haigh’s attack on DP World. Abu Dhabi reportedly is livid that it was barred from financing an offer for the Telegraph.

Elsewhere, the Czech Republic is showing more interest in backing Rolls-Royce small modular reactors (SMRs) than our own government. 

Tech firms are racing ahead with SMRs to power data centres. Amazon has signed up with X-Energy, an SMR developer, and Google with US-based Kairos Power.

Britain has the tech wherewithal for growth but is bogged down in a swamp of inertia which values the public space above enterprise.