The Institute of Directors attacks "glacial speed" of Coalition's supply-side reforms

By Tim Montgomerie
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A few reactions to today's disappointing GDP numbers.

First from the Institute of Directors:

“Today’s figures come as a severe blow to business. The Eurozone countries show that we absolutely cannot afford to waver from the deficit reduction programme, but there are several steps the Government must take to boost the economy through supply-side reforms. New infrastructure projects financed by our low interest rates, proper relaxation of planning and employment red tape, and action to lower energy costs for manufacturers would all show Britain means business. Too often, programmes are moving ahead at glacial speed. To help unlock corporate cash piles, Government needs to show decisive leadership and a real sense of purpose.”

A similar message comes from Philip Booth, Editorial Director, at the Institute of Economic Affairs:

“An expanding private sector is the key to economic growth. The government must do more to prevent stagnation of the economy. The four key measures it could take are a serious liberalisation of planning law; deregulation of labour markets; an end to the completely incoherent “green” policies; and radical reform of the welfare state. There are many factors impeding growth that are beyond the government’s control, such as the eurozone crisis. That is not an excuse for inaction in those policy areas where the government can make a difference. Productivity and not unemployment is the main problem. As such, increasing government borrowing from current levels is clearly not the answer. It is time for bold supply side reform.”

The TaxPayers' Alliance reaction focused on the need to help the construction sector:

“Yet another quarter of economic contraction is dismal news for families already struggling to make ends meet. The evidence doesn’t support those blaming Britain’s economic woes on cuts in government spending though, as the Government and other services category actually expanded in the quarter. The most immediate problem is in the ailing construction sector. While public sector capital spending is set to be cut relatively sharply, the real problem is market uncertainty being compounded by new taxes like empty property rates, which massively increases the risk for investments in commercial property, and Section 106, an increasingly punishing tax on new developments. If the Government are serious about making the health of our economy their top priority, then they need to deliver a less onerous tax system, which doesn’t get in the way of the investment that can deliver more jobs and higher wages.”