George Osborne pledges to "go for growth" and cut red tape

By Matthew Barrett
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George Osborne has written for the Sunday Telegraph today. He starts off by arguing a stable euro is in Britain's best interest, but moves on to the domestic economic situation, saying the burden of red tape should be lifted from businesses:

"Government is always making trade-offs between different objectives. We regulate to help our citizens, but we also want to protect our businesses from being strangled by red tape. We want investment in greener and more secure energy generation tomorrow, but we have to help families and businesses cope with their soaring energy bills today.

Osborne then sets out more specific measures:

"It means reducing the costs of employing people. It means reforming welfare so that we don’t pay people who could work to live a life on benefits. It means rebalancing the economy towards exports and investment. It means cutting business taxes, and doing away with very high tax rates that only damage growth and enterprise."

Osborne puts the weight of regulation in a global context, noting the rise of China and India:

"None of these are easy to do. For every piece of regulation and every pound of welfare spending, there’s a pressure group arguing for it. But if we’re going to hold our own against China and India, we’ve got to start to say “no” to the things we cannot afford. We have to earn our living, take risks and go for growth. The measures I announced in the last Budget are rapidly being implemented, but we will need more. This autumn we will do that."

Melissa Kite, in today's Mail on Sunday, reports details of the growth measures Conservative MPs want to see introduced by the Chancellor:

• Tory MPs want the 50% tax rate abolished, and a return to the 40% rate
• They also want a Capital Gains Tax cut: "Right-wingers point out that since the Government put up CGT, the revenues from it have been falling, not rising."

The desires of Conservative MPs, and the Chancellor's plan for growth look similar. 

However, on de-regulation, Kite reports Number 10 has "set up further commissions to consider" John Redwood's proposals to cut red tape (which the government commissioned him to propose). "To Right-wingers, that sounds suspiciously like a layer of red tape is strangling the efforts to cut red tape". 

Redwood wrote on his blog in November about his plans: 

"In the Economic Policy Review we presented 33 specific areas and measures where we thought repeal and amendment could cut costs and improve effectiveness where needed. The  working party which studied the issue in more detail made 65 specific proposals for repeal, amendment and improved process.

Doubtless the government  will have good reason not to adopt all these. However, the work was done and the list is long. It contains enough ideas that should be acceptable to a government keen on enterprise to make up its first Deregulation Bill. The sooner it does so, the better. If it wants a strong private sector led recovery it needs to make it easier for business as soon as possible. As we said at the time of the launch, deregulatory cost reductions are as good as a tax cut for business, without losing the state revenue. They may even cut the state’s costs as well."

Interestingly, Redwood wrote: 

"The good news is that those proposals which required action from the Local Government Department have been pursued with alacrity."

Another positive note for Eric Pickles.