Leader: Growth or bust

David Cameron has said he is determined not to lead a cuts-only coalition. He has spoken about promoting entrepreneurship, rightly hailing small businesses as the engine of Britain’s economic recovery. At the last Tory party conference, he paid homage to ‘the doers and the grafters, the inventors and the entrepreneurs’. He was fully behind these ‘wealth creators’, and no, he said, ‘those aren’t dirty words’. And since then: nothing.

As we digest the news that the British economy shrank during the final three months of 2010, it is worth asking what’s happened to George Osborne’s growth strategy. It seemed not to exist during the general election campaign. In August, the Treasury invited several think-tank leaders to discuss the best way of achieving growth. Some of those in attendance detected a lack of clear thinking, but were prepared to wait for the white paper on the subject promised for the autumn. But it never emerged and a new deadline was set for Budget Day at the end of March.

Meanwhile, businesses are beginning to despair. The Confederation of British Industry prefers to exert influence through quiet chats and leisurely lunches, but Richard Lambert, in his final days as chief CBI apparatchik, this week voiced his frustration at the lack of a growth policy. He levelled what is a potent charge against George Osborne: that the Chancellor thinks about political posturing first, and economics second.

The 50p tax has, alas, become emblematic of these priorities. The only question among economists is whether this will deepen the annual deficit by £800 million or £3 billion. From April, the effective top tax rate in Britain will be raised further still, to 52 per cent — the third highest in the world.