Don’t let Boris Johnson and Rishi Sunak’s red-tape stifle levelling up; here’s why – John Longworth

No doubt this is how the “statist” social partners, the TUC and the CBI, view things, but it does not chime with enterprise.

Levelling up must pass these key tests to avoid ‘fallowing up’ jibe – The Yorkshire Post says

As the private sector effectively pays for public services, a better analogy would be that the economy is the bird and the public sector the burden.

Unfortunately this preference for the state to be the answer has translated across government policy, including the endlessly referenced “levelling up”.

Far from the current levelling up agenda providing the regions with the ability to create wealth rather than relying on welfare, the bottomless spending spree of taxpayers’ money is riddled with vanity projects and virtue signalling, which ignore productivity improvement and instead soak up valuable labour when there is a labour shortage.

The result is further pressure on inflation. To use the biblical analogy, the regions need a fishing rod, not a lot of fish – smelly fish at that.

Worse still, the overarching policy of profligacy is driving taxation towards a stifling figure of well over 40 per cent of GDP. We appear to have elected a socialist government which is in the thrall of some near communist institutions like the NHS and controlled by Whitehall mandarins.

A techno-bureaucrat elite now directs every aspect of our lives and we have a government who sees the solution to be always interwoven with more government. The answer to levelling up is most definitely not that.

Given the fully anticipated and eye-watering levels of government spending, it is utterly bizarre that the Treasury did not take the opportunity of ultra low interest rates to acquire very long dated, or perpetual, bonds and someone should be seriously asking the question as to why. These could even have been used to make headroom for tax cuts and other economic boosters.

In any event the Treasury’s approach to taxation is utterly confused and contradictory. While income tax cuts mooted recently are to be welcomed, why then put up National Insurance?

The planned increase in corporation tax differentially penalises British businesses who pay it, while differentially advantaging foreign multinationals, including clicks businesses, who avoid it.

The whole Treasury policy is topsy turvy and working against the success of post-Brexit Britain. Perhaps this is the objective of the Treasury blob.

The inconsistent approach of government to the Omicron scare is another example of economically illiterate and damaging economic management. The over-reaction to the more infectious but very likely less deadly variant destabilised the recovery but more specifically, the discouragement of Christmas parties knocked back leisure, hospitality and retail. Less a shot in the arm and more a shot in the foot for Britain.

Meanwhile the Government has done nothing to cut red tape and boost businesses facing a sudden increase in customs and VAT administration as new rules regarding the EU come into force. There has been no regulatory divergence from the EU. The opportunities of Brexit are not being seized. It is almost as though the blob is deliberately trying to keep the UK in a holding pattern, shadowing the EU in a form of proxy membership.

The one area where a bold policy suite has been applied is regarding Net Zero, but this has left the country dangerously exposed. Such an “ultra” approach as 
that taken by the Government is totally out of step with the majority of global GDP.

The plan to achieve Net Zero has not adopted a smart approach to achieve the goal and simultaneously provide energy security, but instead will result in a sharp shock for consumers and taxpayers, who will be required to subsidise uneconomic renewables and ensure unreliable supply. Such a shock will have the political portential to wipe out the significant Conservative majority.

Across the board the failure to deliver by the Government will serve to disappoint ‘Red Wall’ voters – and it is only the absence of a viable alternative that mitigates this.

John Longworth is chairman of the Independent Business Network, Foundation for Independence and a former director general of the British Chambers of Commerce. He is a former Conservative MEP.

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