Business group lists 15 ideas 'to boost the UK economy'
- 3 October 2011
- From the section Business
A plan to improve the UK's economic outlook has been published by the Institute of Directors (IoD).
Its Route Back to Growth report outlines 15 proposals which it says "could make the UK one of the most competitive advanced economies in the world by 2020-25".
The proposals include a second round of quantitative easing by the Bank of England.
The IoD also wants to see the top rate of income tax cut from 50% to 40%.
The report was launched by the business organisation's new director general, Simon Walker, the former head of the British Venture Capital Association.
"I think there is a despair around Britain as a whole, and around British business, about the way the economy is trending," he told the BBC.
"Now a lot of that is not the government's fault, and I think the government is actually battling away along the right lines.
"But some of it is. Some of it's not taking urgently enough some of these commitments and we'd like to see, for example, infrastructure spending kicked up and then ring-fenced."
Driving growth was urgent, he said, and although the government was on the right track, it ought to be going "faster and further".
The IoD's other proposals are:
- Cutting corporation tax to 15% by 2020. It currently stands at 26% and the government plans to reduce this to 23% by 2014
- Improve labour market flexibility
- Ring-fence transport, energy and IT and telecoms spending
- Ensuring that energy policy "does not sacrifice UK competitiveness for green credentials"
- Expand free school provision with profit incentives
- End the £100,000 personal allowance taxation "anomaly"
- Intensify competition policy, both domestically and within the European Union
- Carry out radical civil service reforms to promote deregulation
- Reduce political influence over infrastructure planning
- Greater decentralisation of public sector pay
- No watering down of public sector pension reforms
- Reduce public spending to 35% of GDP by 2020
- Repatriate key employer power rules from the EU
The IoD wants the Bank of England to spend an initial extra £50bn on quantitative easing (QE).
Under QE, the Bank injects new money into the financial system to try to boost banks' lending, and in turn the wider economy.
Minutes of the Bank's last Monetary Policy Committee meeting indicated that the Bank is looking at the possibility of more QE.
Regarding reducing the top rate of income tax, the coalition government appears to be split over the issue.
Work and Pensions Secretary Iain Duncan Smith, a Conservative, recently insisted the 50p rate on those earning more than £150,000 a year would ultimately be scrapped.
However, Energy Secretary Chris Huhne, a Liberal Democrat, warned that his party's MPs would rebel in any vote in Parliament on the move.