The Institute of Directors (IoD) wants the Office for Budget Responsibility (OBR) to have much greater role in boosting growth.
According to the institute, the OBR should monitor two new economic targets – a 3% sustainable growth goal and a 35% public spending to GDP ratio for 2020. It should also have a “powerful ’name and shame’ role”.
Simon Walker, director-general of the IoD, says: “It would make politicians and civil servants think twice before introducing policies which might later be flagged by the OBR as having damaged future growth prospects and the incomes of voters.”
The IoD calls for corporation tax to be cut by 2% to 23% in 2012-13, then 22% and 21% over the following two years, to boost the supply-side of the economy. The government should also commit to abolishing the 50% income tax rate, it adds.
“One in two company directors think GDP growth over the next decade will be lower than over the past decade, which included the 2008-09 recession. Without radical reform we risk a lost decade,” Walker warns.