On December 5th George Osborne, the British Chancellor, delivered the Autumn Statement, where he outlined the British government's economic policy for the next few months. We are hosting a round-table discussion of the Statement and related issues. Our first contributor is Eamonn Butler, director of the Adam Smith Institute, a think-tank.

“THERE IS a great deal of ruin in a nation,” wrote Adam Smith. And the unexpectedly strong growth reported in the Autumn Statement conceals a fair amount of ruin. Genuine economic growth is led by investment, from firms that see real business opportunities. But rather than investing, firms are sitting with £500 billion ($816 billion) on their balance sheets. Exports have stayed flat, despite the slide in the pound. Our big customers in the eurozone have their own headaches.

Like the boom that turned to bust in 2008, this recovery is led mainly by government and consumer spending. With interest rates rock bottom and inflation outstripping earnings, households have been running down their savings. Policies to help borrowers have created a scramble for mortgages and a renewed housing bubble. At a time when ordinary people have had to cut back quite savagely, the government is still spending half the nation’s income.

We need a growth agenda, but so far that has been faltering. There are promises of productivity-enhancing new infrastructure and education projects, but few shovels have yet hit the ground. The extension of rates relief and the cap on rates for small and new businesses are welcome, though they come at the cost of some complexity—and in any event, business rates are not fit for purpose and need to be replaced long before the next revaluation. Tax allowances for shale oil are a welcome way of boosting what could be a game-changing (and bill-cutting) new source of energy for Britain, but the companies involved will tell you that it is planning, not tax, that is the stumbling block.

Planning reform could be a costless way to boost growth, particularly at a time when we need to help firms restructure from their boom-time configuration into one more suited for present times. That restructuring requires easy relocation and changes of use if it is to happen quickly. But the Chancellor’s Autumn Statement pledge to ‘unblock planning’ is focused on housing rather than business – and planning reform is never fast.

It was rising pension age that caught the headlines, but once again, our state pension system needs fundamental reform. A retirement age of 69 might be fine for desk jockeys but not for those in repetitive or manual labour. Far better to replace our Ponzi-style system – which will always promise more than it can deliver – with one based on personal accounts, tailored to individuals’ needs.

What was largely unseen, however, is that the forecasts for economic growth and for employment made by the Office for Budget Responsibility (OBR) and the Bank of England are even more optimistic than the Chancellor’s own. In fact, George Osborne seemed to be trying to steer a line between reporting growth to be so slow that it is politically embarrassing and so fast as to set alarm bells ringing. For if the OBR and Bank forecasts prove correct, such surging growth is bound to prompt the Monetary Policy Committee to raise interest rates. And with so much of the economy and its recent growth balancing on the tip of a debt pyramid, even a small rise in rates could well lead us into another credit crunch and tip households and businesses into bankruptcy.

But also largely unseen in the Autumn Statement coverage is a quite astonishing series of comments by the OBR that suggest that Britain’s economic restructuring is going to proceed a lot faster in the future. That might not sound difficult, given the miniscule, almost negligible, real cuts in public expenditure that there have been. But the OBR papers suggest that the government has ample margins to balance its books and get into surplus by 2018-19, and that four-fifths of that improvement will come through public spending falling as a percentage of national income. In fact, says the OBR, the 2018-19 spending figure will be the smallest percentage of national income since 1948.

This may not be a figure that the government wants to advertise. Electors have got used to thinking that the purpose of government is to spend, spend, spend. But such a planned rebalancing from the public to the private sector is perhaps the one thing that could convince firms that the government means business and that it is, at last, time to grasp the future, invest and generate real growth.