The business sector has been inundated by a flood of regulation in recent years. The immense damage already caused is now being aggravated by stealth taxes and highly suspect measures such as carbon trading.
Rather than regulate for every eventuality, we need to concentrate on providing the low tax, low regulation environment which is the principal requirement for successful businesses. The Department for Business, Innovation and Skills can best help business by lowering the barriers to success or by removing them altogether..
We propose withdrawing funding for non-specific sector support schemes. We would also abolish Regional Development Agencies and use the money saved to provide publicly underwritten but commercially operated start-up loan schemes and to reduce business rates.
Our future: high skill, high value jobs
We now face increased competition from rapidly developing economies such as India and China and there is growing concern about the loss of jobs to these countries. However, new high tech industries offer an immense opportunity to a country like ours with a history rooted in technological expertise and international trade. The UK can be a world leader in high quality manufacturing but only if we provide a dynamic, low cost, lightly regulated environment with a skilled and enthusiastic workforce. Isolating our industries from competition might provide short term relief but the end result would be the same.
The New Party would introduce lower rates of corporation tax to stimulate industry and inward investment and provide better tax incentives for capital investment, research and development. We would also provide better tax incentives to train apprentices and to improve vocational training schemes.
Reform welfare and the labour market
Although there is a pressing need to prevent the welfare system from causing needless damage to the wider economy we would maintain sensible measures to protect the workforce from exploitation. However we would repeal any labour laws and procedures acting as unnecessary barriers to recruitment.
Cut back on red tape
We would introduce, each year, a ‘Repeals Bill’ to get rid of unnecessary and harmful legislation and to simplify existing regulations. We would respect the right of individuals and businesses to make their own decisions and exercise their own judgment and we would repeal any unnecessary bureaucracy imposed by the European Union.
We would also shut down all departments, quangos and so-called ‘task forces’ which are not strictly necessary, such as the proposed new Commission for Equality and Human Rights.
We would introduce modern business systems to the civil service and increase departmental efficiency with less job switching. Salaries would be set to encourage excellence and terms of employment would be comparable to the private sector.
Our proposals assume a significant reduction in the size of the civil service. However, there is a valuable pool of talent within the civil service most of which is wasted on unrewarding and often unnecessary tasks. We would also provide attractive enterprise loan schemes and training packages to enable people to enter the private sector. Our proposals would boost morale in an establishment which often complains about a lack of job satisfaction and high levels of stress.
Science, skills and manufacturing
The belief that we could “offshore manufacturing and concentrate on developing new high value products in our universities” was fatally flawed.
Successive governments seemed to think that countries like China would be content manufacturing low cost toys, trinkets and textiles. However, the Chinese have now built a manufacturing based economy of staggering proportions. They already make 17 per cent of the world's goods and are rapidly moving into new high-tech markets.
We also got it wrong by applying student fees to skills which we were desperately short off. Our universities are now educating a growing number of fee paying foreign students. Not for them media or political studies, they are here to gain the type of knowledge their countries need to compete in the real world. In 1975, American universities turned out 30 per cent of the world's PhDs – China produced none. However by 2010 China will produce more science and engineering doctorates than America.
We are even falling behind the failing economies of the EU. Less than 20 per cent of UK manufacturing output is generated by new product launches – in Germany the figure is still nearly half. The value of all UK engineering, aerospace, defence, electronic and electrical equipment companies listed on the London Stock Exchange is roughly equivalent to the value of just one big German engineering company, Siemens.
We cannot afford to lose our manufacturing capability. Put simply, scientific advance, new technology, university-based research and manufacturing are all interdependent. We must provide the skills needed by concentrating on mathematics, science-based and technical subjects. This is the only way to create an entrepreneurial culture at source.