IoD calls for emergency Budget and regulation overhaul
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The Institute of Directors is calling for an emergency Budget and an overhaul of regulation in the first 100 days of a new government.
In its latest Big Picture report, the IoD says in the 100 days following the next General Election, on May 6, the winning party must pass an emergency Budget setting out a clear plan to reduce the £178bn deficit, with specific cuts to less productive items of public expenditure the most important element.
The emergency Budget should also enact a new fiscal target to reduce public spending to 35 per cent of GDP by 2020-21, says the paper.
It says regulatory budgets should also be introduced across all government departments, and government should be very clear and immediate signals that regulation on UK businesses will be a declining burden.
On corporate governance, the paper says: “Responsibility for financial regulation and supervision should be transferred from the FSA to the Bank of England . A ‘twin-peaks’ supervisory approach would place responsibility for financial stability in its entirety in the hands of the Bank, leaving the FSA to focus on consumer protection and business conduct issues.”
It continues: “The reform of UK financial regulation should be coordinated on an international basis. Corporate governance should focus on developing the professionalism of boards and individual directors and on increasing the active engagement if institutional investors with companies that they own.”
The paper also calls for a freeze on public spending in real terms for the next decade and for parliament to set up a new Fiscal Policy Committee to monitor progress towards the fiscal target.
Plans to reduce the main and small companies corporation tax to 15 per cent must be set out, and the proposed one per cent increase in national insurance must be reversed, says the paper.
The paper also states that the planned income tax increase should be rolled-back and more work must be done to encourage savings.
It says a review of the auto-enrolment process is needed, the state pension age must increase to 70 and a “decent” basic state pensions must be created.
Referring to EU policy, the IoD says the new Parliament must defend the competition principle and uphold EU state aid rules. It must also support SMEs with a low regulation approach.
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