Queen's speech: Coalition's piecemeal plans will not bring economic growth

9 May 2012

In response to the Queen’s Speech, the Adam Smith Institute gives its reactions to some of the key areas:

Coalition plans need to be far more radical to ensure economic growth
“The government seems determined to tinker around the edges of business and employment regulation. The tepid piecemeal modifications the government is proposing will do virtually nothing to make doing business easier in Britain, and that's the only hope we have of generating a strong recovery. Our export markets are weak and domestic demand is stagnant – without a supply-side revolution that slashes business taxes and employment regulation, we will not see growth.

“The Communications Bill is particularly concerning. One of Britain's best comparative advantages internationally is its dynamic and fast-growing tech sector. So far, the government has talked the talk about protecting this sector, but not walked the walk. The Communications Bill should establish the exceptionalism of the internet and protect it from the stifling regulation that is holding back the rest of the economy.

“Instead of more regulation like the immigration cap and the Communications Bill, the government should be throwing out the regulation book and starting from the ground up. It should determine which regulations are absolutely necessary and ditch the rest. In the meantime, companies with 100 employees or fewer should be encouraged to register their employees as self-employed under contract, to side-step much of the existing employment regulation. Growth won't come from anywhere else, so we can't afford not to unleash British business. Unless we tackle the regulatory blockages, competition and enterprise policy will bear little fruit.” Sam Bowman, Head of Research

On the Groceries Code Adjudicator – what will they think to regulate on next?!
“So now we are going to have an OfGrocer. What will they think of to regulate next? At this rate, almost the entire country will be employed in regulatory quangos, with hardly anyone left to produce things at all.” Dr Eamonn Butler, Director

On the Vickers Report – it won’t cure the problems
“The Vickers Report will not cure the problem of systemic failure. Only more sensible government policy on money, public borrowing and interest rates will do that. It was government excesses on both sides of the Atlantic that caused the false exuberance of the banks that ultimately could not be sustained and produced the inevitable crash. If anything, the proposals will make the situation worse, by making it explicit that taxpayers will bail out the 'retail' banks. The problem is that most governments round the world are broke, including ours, so we are in no position to insure everyone's losses in the event of another banking crisis, perhaps sparked by the collapse of the euro.” Dr Eamonn Butler, Director

On public sector pension reforms – long overdue, and must be in line with private sector
“The bill to reform public service pensions is long overdue, though it will be hugely controversial. But the pensions for public sector workers have to be in line with what people in the private sector can aspire to. Right now, the perceived superiority of public pensions – larger, inflation-proofed, with more generous sickness provisions and available at an earlier age than most private pensions – causes enormous resentment.” Dr Eamonn Butler, Director

On Freedom of Speech – welcome news but they won’t go far enough
“I am pleased to see measures to protect freedom of speech and reform the law of defamation. No doubt the government will not go far enough, but freedom of speech is essential for a healthy public debate on the important issues of the day. Right now people are unable to speak their mind for fear of being prosecuted or sued.” Dr Eamonn Butler, Director