Changes to the fiscal system (taxation and spending) could address both the weakness of growth and the redistribution of incomes. In Britain, workers are clobbered by income taxes. In contrast, there are two key areas where taxation is much below the OECD average. Not surprising, since it can be responsible for 40 per cent or more of all spending. For the last five years, Britain’s level of investment has been way below Italy’s, long regarded as a hopeless case for industrial renewal.