Government needs to make space for business to drive recovery

Focusing on increasing private sector investment and productivity is the key

Responding to the Bank of England’s latest report, Ruth Porter, Communications Director at the Institute of Economic Affairs, said:

“It’s hardly surprising the economy is not recovering when the government has failed to reduce public spending significantly. Focusing on increasing private sector investment and productivity is the key. Heavy regulation and high taxes will inevitably put businesses off investing. 

“Rather than raising various taxes, the coalition needs to focus on creating the space for major tax cuts. Deregulation measures such as liberalising the planning environment would also be a massive boost to industry.

“They must also counter the uncertainty facing businesses by making the labour market more flexible. Increasing productivity is vital and reducing high marginal tax rates will help with this.”

Notes to editors:

To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer on 020 7799 8909 or 07766 221 268.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

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