Cut regulation to avoid a double-dip recession and for a happier 2012

2012 was supposed to be the year when everything would start to look up for the Government, according to the received wisdom back in May 2010. This was to be the year when the economy would rebound into strong growth, monarchists would celebrate Her Majesty's Diamond Jubilee and the gaiety of the nation would be lifted upwards as Londoners in traffic jams wished Olympics VIPs Godspeed as they whizzed past in exclusive Olympics traffic lanes. But that's not how it looks now.

A Deloitte survey of Chief Financial Officers has found that 54 per cent now expect a double-dip recession - twice the figure making that prediction last year. Meanwhile, a survey of companies by Lloyds Bank shows business confidence has plummeted back to levels not seen since 2008 and assesses the likelihood of another recession to be 75 per cent.

The sluggish growth in the US and Japan means that lacklustre British economic growth is unlikely to be dragged up by booming export orders. The unfolding debt crisis in the eurozone, meanwhile, means companies are once again battening down hatches and preparing for a possible disaster.

In the UK, high taxes and Byzantine regulations continue to choke off the growth that we'd be enjoying without them. While politicians often say the right things about red tape, it's becoming clear that far too little is happening to reduce the burdens on business and pave a path for prosperity.

Even the Government's moratorium on new regulation for micro businesses employing fewer than 10 people will make little difference as it has emerged that it will only apply to one new regulation, a single new rule regarding forthcoming equalities legislation. Alexander Ehmann, Head of Regulatory Affairs at the Institute of Directors said:

"It's the Emperor's New Clothes. The moratorium exists but it hasn't been applied to anything. Unless it is applied to something it is meaningless."


John Walker, Chairman of the Federation of Small Businesses, summed up the increasing frustration with the Government's failure to act on its diagnosis:

"The Government has talked a good game on deregulation. But small firms are still waiting to see action on the ground that matches the rhetoric."


With the deficit still at eye-wateringly high levels and grim prospects for our major trading partners, the Government needs to take decisive action now to free up enterprise to create the jobs and prosperity which the economy and the public finances desperately need. Announcements and statements are not required. Abolition, amendments and cuts to regulations and taxes are.2012 was supposed to be the year when everything would start to look up for the Government, according to the received wisdom back in May 2010. This was to be the year when the economy would rebound into strong growth, monarchists would celebrate Her Majesty's Diamond Jubilee and the gaiety of the nation would be lifted upwards as Londoners in traffic jams wished Olympics VIPs Godspeed as they whizzed past in exclusive Olympics traffic lanes. But that's not how it looks now.

A Deloitte survey of Chief Financial Officers has found that 54 per cent now expect a double-dip recession - twice the figure making that prediction last year. Meanwhile, a survey of companies by Lloyds Bank shows business confidence has plummeted back to levels not seen since 2008 and assesses the likelihood of another recession to be 75 per cent.

The sluggish growth in the US and Japan means that lacklustre British economic growth is unlikely to be dragged up by booming export orders. The unfolding debt crisis in the eurozone, meanwhile, means companies are once again battening down hatches and preparing for a possible disaster.

In the UK, high taxes and Byzantine regulations continue to choke off the growth that we'd be enjoying without them. While politicians often say the right things about red tape, it's becoming clear that far too little is happening to reduce the burdens on business and pave a path for prosperity.

Even the Government's moratorium on new regulation for micro businesses employing fewer than 10 people will make little difference as it has emerged that it will only apply to one new regulation, a single new rule regarding forthcoming equalities legislation. Alexander Ehmann, Head of Regulatory Affairs at the Institute of Directors said:

"It's the Emperor's New Clothes. The moratorium exists but it hasn't been applied to anything. Unless it is applied to something it is meaningless."


John Walker, Chairman of the Federation of Small Businesses, summed up the increasing frustration with the Government's failure to act on its diagnosis:

"The Government has talked a good game on deregulation. But small firms are still waiting to see action on the ground that matches the rhetoric."


With the deficit still at eye-wateringly high levels and grim prospects for our major trading partners, the Government needs to take decisive action now to free up enterprise to create the jobs and prosperity which the economy and the public finances desperately need. Announcements and statements are not required. Abolition, amendments and cuts to regulations and taxes are.
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