GEORGE OSBORNE has been accused of tinkering with a British growth strategy instead of pushing for radical reforms to turbocharge the economy.
Free market think tanks say the Chancellor lacks the “political courage” needed to free British business from suffocating red tape and regulations.
Today they have outlined a package of measures they believe are vital to jump start Britain’s flat-lining economy, from slashing the tax code to axing the minimum wage for under-25s and relieving small firms of the burden of health and safety and employment laws.
Yet the Institute of Economic Affairs and the Adam Smith Institute both warned British businesses to prepare for a disappointing “steady as she goes” approach when Mr Osborne delivers his Autumn Statement on November 29.
The Office of Budget Responsibility has already revised down its growth forecast for 2011 and may do so again before the end of this month.
The think tanks said Downing Street’s dismissive response to the leaked Beecroft recommendations last week showed a lack of political courage in the face of stalled growth.
Former venture capitalist Adrian Beecroft said bosses should be able to fire poorly performing staff with a pay-off rather than face tribunals.
The report was backed by the Institute of Directors and the British Chambers of Commerce but was shelved due to Lib Dem opposition.
Sam Bowman, head of research at the Adam Smith Institute, said: “I sometimes wonder what planet people are living on that they still think we have the luxury of keeping Nineties-style employment laws.
“The Coalition doesn’t seem to have any economic policies apart from keeping the deficit down. It is necessary and it may be staving off the worst but it does nothing about the fact that it is an incredibly difficult environment to hire people in.”
He called on Mr Osborne to speed up moves to take low paid workers out of income tax and said minimum wage guarantees for under-25s must be axed. Firms with less than 100 staff should also be relieved of health and safety obligations, he said.
He called for Iain Duncan Smith’s “brilliant” welfare reforms to be accelerated and for the mandatory retirement age to be scrapped.
Mr Bowman also said planning reforms should go further and called for a middle income tax cut from 40 to 35 pence in the pound. “These would be the first steps in my first aid kit for the economy. What will Osborne do? Nothing,” he said.
Both think tanks said the 50p tax band should also be axed.
Published in the Sunday Express here.
13 November 2011
Sam Bowman argues for liberalising employment regulations and scrapping the minimum wage for under 25s in the Sunday Express.