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This is no time for half-measures. The €uro crisis gives George Osborne a great opportunity to reset the Coalition's economic policy. He needs to relaunch the Government with a ten year growth mission.

By Tim Montgomerie
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George Pascoe-Watson published an insidery briefing note on the Coalition's plans for the autumn yesterday. The Prime Minister will, apparently, focus on schools, welfare, immigration and, especially, growth. There's only one thing on that list that matters - growth. Without growth this government fails.

It's been obvious since the start of the Coalition that this government would be judged on its success at reviving the economy but too many of its measures have been too-clever-by-half; like the damp squib of a National Insurance holiday for firms outside of the South East.

With the world economy facing such a bleak decade this is no time for half measures. We need to be cutting taxes on business and funding them with deeper cuts in the over-sized state. We should be suspending environmental measures that are imposing heavy and futile costs on our manufacturing industry. We shouldn't be loading new regulations on our banks until the economy is strong again. We need them to be lending. We need reform of competition policy, sale of public sector assets, regionalisation of the minimum wage, no-strike agreements in the public sector and refocusing of trade policy on bilateral rather than multilateral agreements. We should also realise that we can't afford bailouts for broken Eurozone economies.

Screen shot 2011-08-05 at 08.20.25Our Liberal Democrat partners have been resisting many of these measures. George Osborne might have an opportunity to use the crisis in the Eurozone to force them to swallow reforms that they'd normally resist. This is a crisis that the Chancellor can't afford to waste. I certainly don't, Mirror-style, begrudge him his well-earned summer holiday but he must come home refreshed - ready not to tinker but to reset the whole supply-side of his economic policy. The overall target of his deficit reduction programme needs no amendment but he should be very worried that he looks set to miss his growth targets.

International investors see Britain as a safe haven in the debt storm because of the Chancellor's deficit policy. But do businesses see us as a country that is reversing the decline in long-term competitiveness that it suffered during the Labour years?

In addition to the policy measures we need a national conversation about the challenges ahead. Cameron and Osborne should be telling voters that this is the payback decade - a decade in which we free ourselves from massive public and private debts. But it can also be the competitiveness decade in which - through mighty reforms to schools, welfare and the tax system - we prepare Britain for a world where China, India and Brazil will eat our lunch if we don't renew ourselves. At the moment there is little sense of mission or urgency. That can't change soon enough.


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