In response to today’s GDP figures, Sam Bowman, Research Director at the Adam Smith Institute, said:
“We shouldn’t be too surprised by these GDP figures. Since GDP figures include government spending, cuts to spending will depress the headline rate even if the private sector is doing quite well.
“What we are experiencing is a rebalancing of the economy. In 2012, nearly a million private sector jobs were created, a very positive development. The state is cutting its workforce, freeing up more labour for private sector productivity.
“However, the government is not doing enough to promote the growth of small and medium-sized enterprises (SMEs). EU regulation costs British business £100bn a year, and our taxes on business are killing jobs. Scrapping Employers’ National Insurance contributions for SMEs could create over 500,000 new private sector jobs.
“The government is right to cut state spending and employment, but it needs to promote stronger private sector growth to pick up more of the slack. Targeted tax cuts and deregulation designed to boost private sector job creation are just what the doctor ordered.”