Jim O’Neill highlights the lack of capital investment in the UK as a major cause of stalling productivity and wage growth (“The UK needs a coherent economic strategy”, Opinion, July 24). He offers two suggestions to the next prime minister: incentives for risk-taking activities, and increasing government spending. Instead of incentives, our government offers windfall taxes and corporation tax rises. If it cannot demonstrate an understanding of the importance of stable fiscal policy, how can it be expected to invest successfully on our behalf? An economy that requires greater direct public sector investment is one imperilled by the disincentives resulting from its current strategy. A smaller state would create the best opportunity to see private investment flourish. The added benefit of lower borrowing requirements would be to arrest the decline in the pound. Companies in which we invest would rather reinvest their profits than return them to shareholders. I hope they are given the opportunity to do so.

Freddie Lait
London SW1A, UK