Oct 2011 05

Institute of Directors maps out “The Route Back to Growth”6

The Institute of Directors (IoD) has published ‘The Route Back to Growth’, a policy paper by the their new Director General Simon Walker, listing measures the Government should take to boost the UK’s faltering economic growth rate. Yesterday also saw the Chancellor of the Exchequer’s speech to the Conservative party conference in which he reaffirmed the Government’s commitment to its fiscal plan but revealed little new in the way of pro-growth and pro-enterprise measures.

The paper has 15 solid policy proposals on areas such as public sector performance, employment policy and taxation. Mr Walker explained the importance of the challenge to raise the UK rate growth rate:

No aspect of economic policy is more important than returning Britain to a growth trajectory. Without the belief that UK economic growth is expanding, confidence will wane, international investment will dwindle and British consumers and taxpayers will be left picking up the crumbs at the tables of faster growing competitors. The Government’s deficit reduction programme is a step in the right direction – but it must go faster and further before the economy is on track and prosperity returns.

Among the policy recommendations are: abolish of the 50p rate of Income Tax, continue cutting Corporation Tax to 15 per cent by 2020, limit public spending to 35 per cent of GDP by 2020, review EU directives to remove ‘gold plating’ of regulation, decentralise public sector pay bargaining and the introduction of ‘no fault dismissal’ for when work relationships have simply deteriorated beyond repair without fault being apportioned to a single person.

These are the sort of policies Mr Osborne should be studying in detail and implementing if he wants to get serious about growth. Creating a new ‘sub prime’ credit market in bonds for small business isn’t the solution to Britain’s economic problems. Freeing business from over-zealous regulation and over-complicated and burdensome taxation to create the prosperity we need is.

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  • Steve Collins

    Freeing business (especially SMEs) from over-zealous regulation – YES

    The rest of it sounds like a recipe for royally stuffing ordinary employees whilst ensuring that the wealthiest and most powerful can do exactly what they want, when they want, to the rest of us.

  • Blarg1987

    Having read the report I find it deeply disturbing that those who have pay packages increased by nearly 400% over 10 years yet not expanded the buisnesses by this quantity believe the only way for growth is to scrap all the employment law that protects employees from being screwed over.

    There again the last line of the second to last paragraph does show they admit that public sector pay prevents them from downgrading pay in the private sector.

    Perhaps another policy they could add would be they take a large pay cut for failure to provide shareholders profits and not expanding companies but rather make savings which have damaged company performance over the longer term.

  • Sick of the South

    There doesn’t appear to be much in this report for those of us unlucky enough not to belong to the handful of extraordinary wealthy individuals who are likely to be the sole beneficiaries of many of the policies which the IoD is recommending -  They get a huge tax cut and a massive boost to their already considerable fortunes and we get pay cuts, underfunded public services and jobs which we can be dismissed from at the drop of a hat.

    Why not just go the whole hog and reintroduce feudalism?

  • Dave

    It is perhaps unsurprising, but nonetheless shocking, that not one of the IoD’s 15 policy proposals is directed at the damaging behaviours of large private sector companies.

    Was it too much to hope that inadequate governance and boardroom payment for failure would be addressed?

    A rhetorical question. Of course it was!

    And before any of the TPA apologists trot out hackneyed lines on customer choice in the private sector, cost is cost whether it’s taxation or inflated private sector profit.

    • Sick of the South

      Dream on! The IoD are like the bankers - They believe austerity is for the little people.

    • http://twitter.com/rorymeakin Rory Meakin

      Personally, I think there is room to strengthen
      shareholders’ control over companies to reduce the scope for management acting
      in their own interests at the expense of shareholders. But this issue isn’t
      really linked to taxpayers. Perhaps it’s one for a new organisation: the
      ShareHolders’ Alliance?
      That notwithstanding, the IoD’s report does contain
      many solid proposals that would help lower unemployment, increase growth and
      ease the burden on taxpayers.