The Institute of Directors (IoD) outlines two dozen policies for stimulating economic growth at no cost to the government, drawing fierce opposition from trade unions:
In a new paper published today, the Institute of Directors puts forward 24 policy changes over ten areas of Government policy which could transform growth prospects at little or no cost to the taxpayer over the period of the Spending Review.
These ‘freebies’ are a mix of immediate measures to boost private sector growth and long-term commitments aimed at creating a positive vision for the UK.
The IoD is concerned that ministers are not doing enough, quickly enough, to improve the supply-side of the economy.
The ‘Freebie’ measures include:
• Releasing green belt land for development to boost construction sector.
• Creating a genuine fast-track planning system for key national projects to boost construction sector and replace ageing infrastructure — local objections will need to be overridden.
• Allowing local authorities that increase the total rateable value of properties to keep some of the increase in business rate income so they have an incentive to boost private sector growth in their areas. N.B. local authorities should not be allowed to set the level of business rates since this is likely to undermine growth — this latter option is being considered by some ministers.
• Aiming Regional Growth Fund at ‘winners’ not ‘losers’ — i.e. target cities and clusters likely to yield the greatest return on investment.
• Introducing a minimum £500 employee deposit in employment tribunals to deter weak cases so that managers can focus on business growth — too many businesses have to spend too long defending themselves against vexatious claims because of the UK’s failing tribunal system.
• Abolishing the right to request flexible working — this right creates red tape for firms, and does little or nothing to boost flexible working.
• Abolish the right to request time off for training — this right also creates red tape for firms, and does little or nothing to boost training for workers.
• Earmark all future profits from sale of state-owned bank shares for key infrastructure projects of national importance, particularly those transport and energy projects that are unlikely to proceed on the basis of private capital alone.
• End national collective bargaining in the NHS and Education sector to drive up productivity.
• Boost confidence by making an explicit commitment to reduce ratio of public spending to 35 per cent of GDP by 2020.
The proposed measures have been strongly criticised by the trades unions, with TUC General Secretary Brendan Barber dubbing the proposals ‘Thatcherite fantasy’, arguing that:
“Ending national collective bargaining in the NHS would result in increased costs and bureaucracy; entrench regional inequality and destroy robust pay systems that have helped ensure women receive fair and equal pay. The IoD's real aim is a race to the bottom for pay and conditions in the NHS, and would contribute nothing toward improving productivity or efficiency.
"Employers shouldn't see the right to request flexible working as a cost but as sound business sense. Workplaces where employees can alter their working patterns to fit around their busy lives and commitments outside the office will feel less stressed and anxious and so be more committed and productive at work."
Also commenting on the‘Freebie’ growth paper, Miles Templeman, Director-General of the Institute of Directors, said:
“The Government wants to maximise the opportunities for economic growth but it has little or no money with which to do it. Today we have identified two dozen growth boosting measures that will cost taxpayers little or nothing. By adopting these measures, the Government’s growth strategy would be enhanced immediately. We urge ministers to seize this opportunity.
“The Government’s deficit reduction strategy is central to improving growth prospects and the overall business environment, but the Government also needs to reform the supply-side of the economy to boost the private sector. Many of the measures we have proposed today are long overdue and would improve the UK’s infrastructure and the functioning of its labour market.”