State cash is no substitute for wealth creation

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A year ago this week a new chancellor was appointed. Making a radio programme shortly after Rishi Sunak’s elevation, I asked Rupert Harrison, the former chief of staff to George Osborne, what the new man in the Treasury should look out for. Covid-19 was then merely a small, indistinct blob on the distant horizon but getting closer and bigger.

The forthcoming budget, Harrison warned darkly, should be dominated by the threat of Covid and the need to prepare for the looming economic smash. He was right, though the scale of the public health emergency and resulting economic damage turned out to be worse than even he envisaged.

In response, governments undertook action on a scale unprecedented in peacetime. The British government spent as much as

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