Charlie Elphicke is Member of Parliament for Dover & Deal and a research fellow at the Centre for Policy Studies. Here he summarises his latest paper for the CPS, 10 Policies for Growth, which is published today.
If Britain grows faster, there will be more jobs and money for all. The Government cannot be too pro-business, pro-jobs or pro-money given the total mess Labour made of our economy. The upcoming Budget is an opportunity to speed the recovery. To make our country and countrymen richer and more successful. A nation more able effectively to compete at a time of great change in the global economy.
The most important measure to get Britain growing has already been taken. The Chancellor’s deficit reduction plan sees the wealth creating private sector growing, while the public sector is reined in. This plan is essential to balance the country’s books, see the UK’s growth rate increase and keep interest rates down. Labour’s alternative would see borrowing we cannot afford, far higher interest rates and fail to help the private sector.
The Government also set up a Growth Review ahead of the Budget on 23rd March to look at other measures that could be taken to help create more jobs and money. A key aim for that review is to increase the structural growth rate of the UK. In a paper for the Centre for Policy Studies published today, I set out some ideas on how we can see increased inward investment, encouragement for smaller businesses and a reduction of the regulations that hold back growth.
Why do these things matter? Britain has been losing out on big business investment in recent years. Larger businesses employ 1 million people less now that they did a few years ago. Inward investment by larger business would be boosted by a lower rate of corporation tax – 19% by the end of the Parliament would make a massive difference. Reforms to make the UK a more attractive location for corporate headquarters would help make us the corporate centre of Europe as well as the financial services centre. While reforms to the London equity markets would help the UK become more attractive for corporate share listings as well as a headquarters location.
Smaller businesses account for six out of ten UK jobs. Yet smaller businesses find it hard to raise the capital they need to expand. Investment would be helped by the expansion of the business growth fund. Reform of the tax incentives for smaller business investment like the EIS and VCT schemes would help entrepreneurs grow their enterprises faster. Smaller businesses need greater help when it comes to exports – a fundamental reform of Britain’s export assistance could get such businesses the help they need to expand overseas.
Finally, regulatory reforms would help to clear the barriers to growth. The formation of new businesses is internationally recognised as a key part of any recovery. The New Enterprise Allowance could be expanded to encourage even more new enterprises to be formed. The new Enterprise Zones could be used in new and different ways to boost growth – for example the Transitional Enterprise Zones I argue for in my paper. While the reform of employment law would encourage the creation of more jobs and help increase the growth rate of the UK.
Looking through this list shows just how much damage Labour did to our economy. How much there is to do to turn things around. Yet we did it before and we can do it again. We can build the growth economy, to make Britain richer and more successful once more.