Coronavirus is the most significant new health emergency in a lifetime. But its economic fallout could dwarf the great recession. To maximise the chances of bouncing back, the government should pledge that there will be no austerity for taxpayers and deliver a package of tax and regulatory reforms to sharpen the supply side of the economy, both to fix long-term problems and to enable the economy to best adapt to consequences from the pandemic. The enormity of the emergency means bold, ambitious reforms are needed fast.
We set out the tax reforms needed in Tax changes to ensure a recovery after coronavirus.
We now follow up that tax reform agenda and set out the 20 regulatory reforms needed to free up enterprise to help us recover from one of the sharpest economic contractions in history. These reforms cut red tape to build more housing, promote employment, recover high streets, enhance product offerings in goods and services, and make accessing finance less burdensome for smaller businesses.
The five key themes for reform are:
The housing crisis is still with us and the experience of coronavirus has shown the importance of overcrowding. Give home-owners on individual streets the right to build up to six storeys, subject to a vote on their street and give home-owners a ‘permitted development’ right to add loft conversions at the front as well as the rear, outside conservation areas.
Numbers claiming out-of-work benefits have soared even ignoring the furlough schemes. Action to avoid unprecedented mass unemployment is vital. Let firms offer employment benefits to self-employed workers, remove redundancy consultation periods, raise the pensions auto-enrolment threshold and make home-working more practical by amending data laws.
3. High streets:
High streets, particularly in the hospitality sector, are in distress. Salvaging as much of the prosperity and employment they create will be crucial. Abolish Sunday trading restrictions, let pubs, cafes and restaurants sell takeaway food and drink permanently, and let them use nearby parking spaces and parkland for customer seating. Let pharmacies with no fitness to practice concerns open without restriction.
Getting products to the market and people to their destinations are essential aspects of a functioning economy. Enhance access to goods and services by allowing outdoor weddings and civil partnerships, grant medicines approval automatically if the Americans, Europeans or Japanese already have, relax driver training frequencies, legalise e-scooters, create a single cost of capital for all regulated markets and let childcare staff look after more children.
Smaller, growing businesses need to focus as much of their resources as possible on their commercial needs rather than red tape. Replace time-consuming InnovateUK competitions for grants and loans with matched funding for venture capital firms and exempt larger small firms from mandatory audit requirements by increasing the thresholds for small companies status.