Monday, October 25, 2010

A Forensic Focus On Growth

"When we say we're going to build a new economic dynamism, we mean it.

In the weeks and months ahead, ministers will be developing detailed plans to turn this strategy into action. Everything – from bank lending to skills, green tech to high tech, competition to innovation, international trade to local growth – will be put under the microscope.

That forensic, relentless focus on growth is what you will get from this government."
Thus spake Mr Cam at the CBI conference.

Good. A forensic relentless focus on growth sounds like the very thing we need.

And even better, he explicitly recognises that:
''The new jobs, the new products, the new ideas that will lift us up will be born in the factories and offices you own – not in the corridors of Whitehall.''

Yes, very VERY good.

Just one small point. If he's serious about his forensics, he will want to do whatever it takes to stimulate growth. And that means one thing above all else - tax cuts.

In particular, he has to abolish that economically bonkers 50p tax rate. As we've blogged before, every serious independent analysis says that it will raise virtually no revenue, and may even produce a loss as higher rate taxpayers change their behaviour to escape it (eg see this blog).

Ah yes, the escape hatch. The ultimate escape is to leave the country, and when high earners do that, they very likely take their businesses and their jobs and their economic dynamism with them.

We know there are lots of high earners thinking about this right now. Tyler was chatting recently to some City types, who virtually to a man were eyeing the hatch. And this morning the CBI published a poll showing that "84pc of FTSE 250 bosses surveyed said "personal taxation levels" had made the UK less attractive for investment".

Does Mr Cam understand the risk? The same Mr Cam who lived in Notting Hill and knows loads of top bosses? Surely he must do.

In which case, there really is no excuse. If we are to secure the prosperity and jobs we desperately need, "forensic focus on growth" must trump "all in this together".


And talking of growth, this morning's Independent front page really does underline how desperate the left are to undermine the economic recovery.

The headline was "Britain stares into the abyss again as household confidence plummets". But when you read the actual story, there was hardly even a pothole to be found, let alone an abyss. Instead, all we got was speculation that the latest official growth stats (due tomorrow) may show a slow-down from Q2's spectacular 1.2% (4.9% pa) back down to a more sustainable 0.4% (1.6% pa).  That, and some survey evidence that the property market is still pretty groggy.

Although the flimsiness of the story didn't stop the BBC giving it extensive coverage this morning.

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