In response to the latest UK growth figures, Prof. Philip Booth, Editorial and Programme Director of the IEA, said:
Todays disappointing growth figures underscore the need for radical measures to ensure that the private sector can lead a long-term recovery. Whilst today's figures may well be revised they come in the wake of the IMF's cut in the UK growth forecast for 2011. Treasury forecasts are looking increasingly unrealistic and the outlook for the public finances correspondingly grim. If the IMF is right and the Treasury wrong, a further £10bn will be added to government borrowing in 2011."
We need to focus on reducing taxes and cutting other burdens on business. National Insurance should not be increased and corporate taxes should be reduced or there will be sluggish growth for years to come.
It is astonishing that politicians such as Gordon Brown keep insisting that cutting public spending is taking money out of the economy. The evidence is very clear that increasing government spending and borrowing - even in a recession - slows growth. The only way to raise the long-term growth rate of the economy is to reduce taxes and regulation."