Sir David Davis warns that we risk “low growth for decades”

Following today’s Budget announcement by the Chancellor, Sir David Davis said:

“Growth is the key to Britain’s economic recovery. Huge competition from China, the Far East and other developing countries puts pressure on all Western economies.

If we do not take action to make our economy outperform our international competitors, we risk being stuck with low growth for decades. To achieve the growth we need, competitiveness must be the beating heart of our economic strategy

Making Britain truly competitive means taking tough and often unpopular decisions. The Chancellor was right to cut corporation tax and national insurance for small business, but in my view the Budget could go further.

The Employment Allowance scheme should be extended, corporation tax for small companies cut further and Capital Gains Tax slashed to 18%.

The Government should also resist the siren call of big infrastructure projects. There are many smaller projects which will help the economy – like extending broadband to rural areas and removing bottlenecks from road and rail systems. This is where we should focus our investment to improve long term competitiveness.

We should also scrap the planned carbon floor price, a unilateral tax which will put British business at a unique disadvantage, not just compared to our Far Eastern competitors, but even to European ones. We should only introduce these schemes when we are quite sure that they will not simply drive high energy-use companies abroad, as has happened in the past.”