Economy 'shock therapy' needed, says David Davis


George Osborne was challenged by a senior Conservative backbencher today to set out a new programme for economic growth before it is too late.

David Davis, who stood against David Cameron for the Tory leadership in 2005, urged the Chancellor to use the forthcoming Autumn Statement to set out plans to haul the country out of recession.

He said the economy needed "shock therapy to jolt it out of the torpor".

"Inaction could deliver decades of decline and disappointment to a whole new generation," he said.

He suggested the coalition's deficit reduction programme had been "too little, too late" and called for a wide-ranging package of support for small and medium-sized companies to kickstart growth and employment.

That meant cutting taxes, regulation and energy costs and ensuring adequate bank lending was available.

"We are not quite out of time. It's the 11th hour, if not the 59th minute," he said in a speech hosted by the Centre for Policy Studies think tank.

"Our Chancellor is a clever and resourceful man.

"He should take the opportunity of the Autumn Statement in a few weeks' time to lay out a plan to reinvigorate Britain."

Mr Davis said the Government was making "heavy weather" of deficit reduction with growth prospects looking "poor".

He warned the Chancellor that, although he could point to factors outside his control, he had to develop his own response.

"An alibi is not a policy. There is a risk that by focusing on parcelling out blame, we accept our circumstances with too much fatalism.

"In economics, to understand should not be to excuse. The parlous circumstances should not be an excuse for inaction, but rather a spur to dramatic action."

He pointed to other countries like Germany and Switzerland that had performed well in similar circumstances

"Britain's problem cannot simply be attributed to bad banks at home and collapsing export markets abroad," he said.

"It is more fundamental than that, and demands more fundamental action.

"Indeed, if we do not take a coherent and radical approach to galvanising our economy, there is a serious risk that we will face a decade, or even decades, in the doldrums.

"So if we fear to act because we have anxieties that the alternative policies are too 'risky', we should start by facing up to the real risk - that inaction could deliver decades of decline and disappointment for a whole generation."

He went on: "Today what is needed is a modern shock therapy for our economy, to jolt it out of its torpor. When one of the possible futures facing us is decades in the economic doldrums, what looks risky may in fact be the safest course."

He urged the Government to exclude small businesses from swathes of red tape and to cut taxes - especially what he termed "the employment killers" of capital gains tax, employers National Insurance and corporation tax.

"More than this the Government should lay out a long-term vision of a tax and regulatory structure which will encourage enterprise and favour employment creation in the private sector," he said.

"It should make clear to the people of Britain that there is a competitive future.

We believe that Britain can compete in the global markets of tomorrow, if the Government is willing to liberate Britain's energy, enterprise and creative genius."


Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA celebration of British elections
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected