Tim Leunig

The reality is that Britain needs a new hub airport. Paris has four runways, and so do Frankfurt and Madrid. Amsterdam has more, and American cities more still. Of course, sticking our heads in the sand won’t send us back to the stone age, but connections and prosperity go together. But siting a four runway hub is not straightforward. Airports are noisy and countries have a choice. One option is to put an airport somewhere that works for passengers (La Guardia, Haneda, Dorval) and put up with the noise. The alternative is to put it further out (Newark, Narita, Mirabel) but then passengers do their best to avoid it because it takes longer to get to. That is the way the current debate is framed.

The best of all possible worlds for the pension industry is a buoyant economy. Workers have enough money to save, share prices rise and dividend growth is robust. Interest rates are positive in real terms so annuities are good value. The economy ground to a halt in 2008. The overwhelming priority for everyone is to get growth going again. Without growth the services that pensioners depend on — such as the NHS — will struggle. Traditionally, governments cut interest rates and raise spending to get the economy moving. The Bank of England has cut interest rates as much as possible and the government deficit remains very high. We have exhausted conventional policies, and yet the economy is not growing.