Gaping gulf between Margaret Thatcher and Rachel Reeves exposed in four words

What has happened to our country when we are relieved to see 0.1% growth?

Treasury mandarins will have punched the air when official growth figures revealed we are not in recession.

An expert at one leading investment company described the UK’s GDP figures as “much better than expected”.

How have we ended up in a situation where we celebrate the fact we are stagnating rather than in outright decline? We exclaim “Phew!” when the economy is flat-lining rather than crashing.

Such poverty of ambition would have horrified Margaret Thatcher, who became leader of the Conservative party half a century ago this week. She said she came to office with the “deliberate intent” of transforming the UK into a “get-up-and-go, instead of a sit-back-and-wait-for-it, Britain”.

But Chancellor Rachel Reeves has not set free entrepreneurs to get out there and create the prosperity the country needs. Her first Budget contained more than £40billion of tax rises – including the £26billion increase in employers’ National Insurance contributions.

Her big growth speech would have left Thatcher unimpressed.

Rather than liberating employers and innovators from red tape and tax, the big announcement was her support for a third runway at Heathrow – a project not expected to be built until 2035. This is the definition of “waiting-for-it”.

The decline of British prosperity is not about spreadsheets and lines on graphs. It is about the erosion of opportunities for people to work hard and improve their lives. The expectation that each successive generation will have better living standards than the one before is rapidly perishing.

The latest growth (or non-growth) figures show that living standards have taken another knock with GDP per head shrinking for the second successive quarter. As the Taxpayers’ Alliance pithily put it, people are experiencing a “personal recession”.

This shrinking of household prosperity is mirrored by the hollowing out of the high street. Business rates have killed entrepreneurship for too long, and the reduction in rate relief – combined with higher staffing costs – will intensify the woes of retail.

Thatcher described small businesses as the “roots of a free society,” saying they are “indispensable to the creation of jobs and of wealth”. The Treasury needs to rediscover this truth.

The production sector – the bit of the economy that makes things – is calculated to have fallen by 0.8%. This is the latest in a series of falls.

The Treasury must wake up to trouble in the engine room that demands urgent attention.

The combination of near-absent growth, a bigger tax burden and high is disastrous for Britain. The Chancellor would be under intense pressure to cut if Tony Blair had not granted independence to the Bank of England.

Instead, the country is waiting to see where the axe will fall if – as keenly expected – spending cuts are announced next month. This is a sad taste of what to come if the country fails to grow and public services and we take for granted become unaffordable.

The Chancellor says she is “still not satisfied with the level of growth that our economy is achieving”. That’s good – but if she is serious about restoring prosperity then she must allow entrepreneurs to get on with their vital work.

If she needs advice, inspiration and courage, she would do well to look to a grocer’s daughter from Grantham.