Think-tank Civitas urges cuts in tax and energy costs
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Sunday 21 October 2012
Cutting energy costs, assistance to some industries as well as slashing corporate and personal tax are essential if the UK is to boost economic growth, according to a new report published today by Civitas.
David Green, the head of the influential think-tank, has come up with a 10-point plan in his report, A Strategy for Economic Growth: A Modern Industrial Policy, which he claims would put fire back into the economy.
He said: "It is significant the Government is now committed to a industrial policy but some of the details are a bit hazy. However, there are two policies it is pursuing which are undermining its own efforts to stimulate growth: over-enthusiasm for deficit reduction and blind commitment to reducing carbon emissions."
Dr Green adds that there is a golden rule of policy – do not make matters worse. "But this Government is. Some of its climate-change policies are undermining the competitiveness of the UK by increasing costs for our companies relative to our main rivals," he warned.
In the chemical industry, for example, companies that make products such as insulating materials, will be driven overseas because of rising costs.
Instead, he said the UK should move quickly towards its new tax regime for shale gas and delay the closure of coal-fired power stations which are not at the end of their cycle but are being closed because of European Commission regulations.
"We should flout these requirements and remind the EC that the Germans are building new coal-fired power stations.
"The Germans have no intention of committing economic suicide merely to obey the requirements of fundamentalist officials in Brussels.
"If we follow the current policies of the UK climate change department it will amount to an act of national self-harm."
Mr Green adds that one of the unintended consequences of the backlash against business is "the hostility to 'private wealth' in recent years has paradoxically encouraged 'corporate wealth' and 'political wealth'.
"But by cutting the headline top rate of personal tax and reducing tax bands, people will be able to build up savings again to either invest in start-ups or become entrepreneurs."
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