Ed Balls is doing very well out of the GDP figures that were released on Wednesday. The Shadow Chancellor is right to say that George Osborne is not yet doing the right thing with the economy. But that doesn’t mean Balls’ solution is the right one. Cuts should have been only one side of the deal, but as Iain Martin points out in today’s Sunday Telegraph, the other side which should have kickstarted growth – supply-side reform – is not forthcoming because Osborne and Cameron are afraid of offending the Lib Dems. Similarly, James says in his column today that too often attempts to strike a balance between the supply-side reform that the Tories want and the demand-management favoured by Vince Cable means nothing is achieved at all.
In a piece in the Mail on Sunday, Sir James Dyson has strong words for the Chancellor, arguing that ‘short-termism in business is cavalier; in politics it is routine’. He illustrates the obstacles he has encountered when trying to expand the Dyson empire, citing complex planning laws which prevented another factory being built, labour laws made in Brussels and a reluctance on the part of investors in the UK to ‘take a punt on technology, science or engineering’.
Dyson wants the government to look at more flexible employment conditions, new routes for inventive companies to access debt financing, reducing the tax burden on businesses, support for those investing in research and development and a simpler taxation system overall. He also calls on the Chancellor to ‘give Boris his island, build the airport that we badly need to make it easy to do business here’.
Many of those reforms in that list will give the Lib Dems no end of sleepless nights. The Chancellor needs to be able to make the case to voters that the Conservative party now needs to do the right thing by the economy. The reason some of the more radical Beecroft recommendations were stifled was that the report was not backed by hard evidence, more conjecture. It was an easy fight for Cable to win. Now, after the fright of a 0.7 per cent fall in GDP, ministers need to really push the case for reform in a full-throttle rather than half-hearted manner.