No need for a Plan B

A response to the IMF analysis of the economy

Responding to the IMF’s analysis on the UK economy announced today, Mark Littlewood, Director General of the Institute of Economic Affairs, said:

“The IMF’s analysis makes it plain that George Osborne doesn’t need a Plan B. He should not be diverted from a strategy to get the deficit under control.

“But he does need Plan A+. He needs a plan that actually includes a serious strategy for growth. Since he became Chancellor, the regulatory burden on British business has actually increased. Banking and financial services – the backbone of our economy – are increasingly used as a political football. And his budget this year merely tinkered with a few minor details.

“Economic growth will not be boosted by splurging more money in an inefficient and absurdly overgrown public sector. The government needs to slash red tape, simplify employment law and provide a more benign environment for British business.

“If the government does have any room for fiscal manoeuvre, tax cuts should be the priority.”  

Prof. Philip Booth, Editorial Director of the Institute of Economic Affairs, said:

"The IMF is very much taking the same line as the coalition and the Bank of England. However, the IMF is arguably too sanguine about inflation and its argument that the coalition's tax rises have been necessary is implicitly based on the assumption that public spending should not be cut further. By 2015, the state will still be spending at least 40% of national income: