Amol Rajan: How do we make Britain great again? Easy ...

Last week I argued that, like the rest of the West, Britain has entered a long period of relative decline, and the best optimistic antidote would be to pursue a politics of national greatness. What would such a project look like?

The first thing it would have to do is recognise that there is no more money. At the 2015 General Election, the main party leaders will be akin to three bald men fighting over a comb. Gone are the days of lavish spending funded by borrowing – or rather, deferred taxation. The deficit might fall (slowly); but our national debt at the end of this parliament will be around £350bn higher than it is now.

Our deficit is the difference between national income and expenditure. On both sides, radical reforms can be made. On income, the state has to find new ways of generating revenues through taxation. Tax should follow a simple logic: tax bad things, and cut tax on good things.

One very bad thing in our economy is the monstrous inflation in house prices over the past two decades, and consequent speculation on property prices. The rise in house prices is also income earned through good fortune rather than endeavour. It is therefore a legitimate object of taxation.

We need to shift the burden of taxation from earned to unearned income; from income and consumption generally to wealth; and therefore to new taxes on property and land. Such taxes are unpopular among the aspiring middle-class who decide elections. But they are morally and economically necessary.

On the expenditure side, we should cut spending on wasteful projects. The current retirement age is unaffordable; the sooner it is raised to 70 the better. And the safety net of welfare has to be converted into a trampoline that bounces people back into work rather than trapping them in dependency.

We have to spend our limited money better too, by investing heavily in the sources of our future strength. These are: education at all ages; national infrastructure; entrepreneurialism, especially of the digital variety; and scientific research, especially in medicine and the environment.

These three elements – new revenues through fair taxation, shrewd spending cuts, and investment in our future – have the common aspiration of a country restored to greatness. Under the banner of patriotism, they could stiffen our sinews, stir our blood, and mobilise our government and our people towards a better future.

All it needs is a leader to champion and sell it. Any takers?