Investment drives growth. That’s why gloomy forecasters are so wrong about the budget | Will Hutton

The Office for Budget Responsibility's extreme conservatism means it has woefully underestimated the impact of Labour's public spending plans

There is a consensus among economists that a precondition for higher growth is higher levels of investment, and that one of the most certain ways of lifting investment levels is for the state toprovide a lead.

Whether European growth in the 1950s, Japan's astounding national income-doubling plan in the 1960s or the dynamic growth of the Asian tigers in the 1970s and 80s, it has been the same story of higher public investment triggering a step change in economic growth. In the US, vast increases in investment spending on defence have induced growth and the tech revolution, given extra economic impetus by President Joe Biden's infrastructure and R&D spending. It was true of Britain in the 1950s and 1960s too, when public investment averaged more than 3% of GDP.