UK economy being held back by ‘five giants’ – neglect, gridlock, discouragement, myopia and powerlessness – warn business grandees

A group of business grandees has hit out at the ‘five giants’ putting a straitjacket around the UK economy.

In their dire warning, the Prosperity 2030 Alliance – which includes the chairs of FTSE 100 giants NatWest, Diageo and National Grid – said neglect, gridlock, discouragement, myopia and powerlessness were the main factors choking off growth.

The first of five reports assessing the main challenges facing the UK economy drew on the famous Beveridge Report of 1942, which identified five ‘giant evils’ to overcome in a post-war society.

The Alliance is chaired by Rick Haythornthwaite, also chair of NatWest bank.

He said: ‘Ask any young person whether they expect a better life than their parents, and increasingly the honest answer is no.

‘That’s not defeatism, it’s 20 years of growth we didn’t deliver. Beveridge named his giants for a different generation.

‘We think today’s giants are solvable too, but only if politicians start investing and planning for the country they want to pass on, not just the next few years.’

The report said the British economy was suffering from ‘neglect’ because of a lack of investment from the private sector amid poor choices by the Government, leaving the UK trailing other G7 nations.

It said ‘myopia’ referred to a lack of long-term thinking in Government that could lead to better outcomes, while ‘gridlock’ had been caused by creating too much red tape. This has left businesses struggling to navigate a proliferation of growth-destroying regulations in recent years.

Meanwhile, a badly designed tax system laden with disincentives has prompted ‘discouragement’.

The report finally identified the excessive concentration of power in the central state, leading to ‘powerlessness’.

‘Britain is one of the best places to work, invest and do business,’ Mr Haythornthwaite concluded, adding: ‘But realising the potential of the 2030s will require greater ambition and a willingness to confront the choices needed to strengthen our economy.’

It comes amid heightened speculation of more tax rises in next month’s Budget, the first of Andy Burnham’s premiership, to help pay for a series of unfunded commitments the new Prime Minister made during his first few weeks in Downing Street.

While it emerged last week that the economy unexpectedly grew 0.4 per cent in July, more tax hikes threaten to further choke off Britain’s sluggish growth amid rising debt repayments.