The strictures of the IMF about British economic policy have long had a resonance in Britain, for it was after all the IMF who bailed us out in 1976. So the report of the Fund on the UK and the visit by its managing director Christine Lagarde have attracted a whole host of comment – increased coincidentally by the downbeat report from the OECD about lacklustre British growth prospects this year.
Actually what the IMF is saying makes sense. We have been right to focus on getting the deficit down but if there is a severe recession in Europe, which is not impossible, we should take steps to boost growth.
Those include easing up on both fiscal and monetary policy, the latter by considering another bout of quantitative easing. These would be the textbook responses to an external demand shock and few would quarrel with that.
But there is a problem with British government policy at the moment and it concerns its relationship with the business community. It is not so much about macro-economic policy, where there is general support. Rather it is about the detail of government policy on such issues as tax and regulation.
Business feels, with some justification, that the Government has failed to deliver the promised simplification of both. Indeed it has made matters worse by its relentless fiddling, just as its predecessor did. You do not need to buy every argument of the business community to see it has a point. The lawyers are busy helping companies comply with each new bit of regulation but this does not help growth.
A lot has been made of Vince Cable's negative attitude to business but the Chancellor is seen in much the same light. Fact: this year's Finance Bill is the largest ever published, at 686 pages, 50 pages longer that the previous record in 2004. Oh, that excludes the explanatory pages, which are almost as long again.
It is strange that George Osborne, whose fortune comes from a family business, should preside over such stuff. Since the problem has worsened under both governments, there must be some sort of systemic failure in the mechanism of government that the Coalition has failed to comprehend, let alone tackle. Ministers pull the levers then wonder why nothing happens.
But of course the detail of government does not make headlines. GDP forecasts do, especially if they come from abroad. However anyone tempted to take too seriously comments from the IMF managing director about UK economic management should consider this quote: "The euro area is a monetary zone of complete solidarity." A bit unfair I know, but that was none other than Christine Lagarde, Finance Minister of France, on 11 December 2009.Reuse content