His ambition to cut taxes is predicated on a need to get welfare spending down and increase public sector productivity. State spending in the UK has ballooned following a series of economic shocks. The furlough scheme during the pandemic cost £70bn in total.
Russia’s invasion of Ukraine also saw the UK government spend around £78bn on an energy support package that subsidised bills and gave extra support to poorer households. At the same time, public sector employment has grown from around 5.4m pre-pandemic to closer to 6m at the end of 2023.
The French state remains much larger than Britain’s, at 58pc of GDP in 2022. However, the size of the British state – 44pc of GDP – is much bigger than the US, where public spending is equivalent to 36pc of GDP.
Mr Gill said the US was better equipped to deal with shocks because of its system of less generous welfare, more local decision-making and a willingness to let badly performing companies go bust.
UK public spending accounted for around 38.5pc of GDP pre-pandemic and had broadly been closer to the US since 1989, according to data published by the International Monetary Fund (IMF).
The IMF expects the US to grow by 2.7pc this year, far higher than Britain’s growth rate of 0.5pc and France at 0.7pc.
Mr Gill said America’s dynamism was one of the reasons the US was able to bounce back from the pandemic so quickly, surpassing its pre-Covid size within a year of the first lockdown.
Mr Gill said: “When it comes to shocks, I think the US approach is always much better.”
He added that America’s willingness to “experiment” during the pandemic instead of imposing blanket lockdowns meant states were empowered to make different decisions.
“There was much more experimentation. Some countries kept their markets open, they kept the schools open. So as a result, what happened is that if you really needed a job, you went to South Dakota, right? The other thing is I think that there’s enough pressure to get back to work because the safety net is not that deep. The third thing here is you actually find that there’s a lot more births and deaths of firms.”
Mr Gill also described the closure of schools in both advanced and developing countries as the “biggest mistake” made during pandemic lockdowns.
