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Tory MP David Davis calls for ‘bonfire of regulations’ to boost growth

London UK Thames Parliament 480

Prominent backbench Conservative MP David Davis has called for a “bonfire of regulations” to boost growth and lift Britain out of recession.

In a wide ranging speech to the Centre for Policy Studies, There is an alternative: Why the Government needs a growth policy, the former Tory leadership candidate outlined his plan for economic “shock therapy”. It includes slashing regulation, a radical overhaul of banking and a pledge of no new tax rises.

Davis, who is seen as a torch bearer for the right wing of the Conservative party, said: “Today what is needed is a modern shock therapy for our economy, to jolt it out of its torpor. When one of the possible futures facing us is decades in the economic doldrums, what looks risky may in fact be the safest course.

“Indeed my only criticism of the deficit reduction policy is not that it is too fierce, but that if anything it is too little too late.”

Davis said the biggest “growth-killer” in modern economies is regulation, especially employment laws.

He also said the country can not tax its way to prosperity and hit out at Liberal Democrat plans for a wealth tax, as proposed by deputy prime minister Nick Clegg last week.

He sayid “Income taxes, employment taxes, capital taxes, sales taxes, are all too high and too complex.

“Let’s start with the easy part – there must be no new taxes. Yes, I’m talking to you, Mr Clegg.

“You have to make a decision, you either punish the rich or you harness their energy, their talent and their resources to benefit all of society. We cannot do both.

“Punishing the rich is politically profitable but can be economically disastrous.”

Davis also lamented the decline of local banking making local decisions and blames it on barriers to entry for new banks.

He said: “We need to make it easier not harder to start a new bank. We need to tear down the barriers to entry in banking, and reverse the policy of the last decade which has effectively excluded banking from competition law, in a sad misunderstanding of the role of the financial sector in the modern state.”

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  • Shabbir Razvi 5th September 2012 at 10:28 pm

    Davis was raised on Aboyne Estate, a council estate in Tooting, South West London. He attended Bec Grammar School, in Tooting.
    I don’t live far from Tooting where Mr Davis grew up and attended the same school. I am not surprised by his views concerning regulation. The rich and powerful are never regulated. The force of law and regulation is to control and emasculate small business and the less fortunate who have to be employed.
    It is lack of proper implementation of regulation which has created the current crisis. Until the so called masters of the universe are brought to book the situation will be bleak no matter how much you squeeze the poor by having flexible labour laws and not collect a fair share of taxes from the top 10%.
    I would suggest the following:
    “You have to make a decision, you either punish the poor or you harness their energy, their talent and their resources to benefit all of society. We cannot do both”. The comment by Mr Davis reads quite differently when the word rich is replaced by poor.
    How much do you need to be entrepreneurial?
    Can you eat more than one belly full?
    Can you sleep in more than one bed at a time?
    Greed has no limits!
    Entrepreneurs are not always motivated by just money?
    We are where we are at this time in our history because we have been shown the mirage of “trickle-down effect”. Yes we need to put all those on bonfire who have inflicted this upon us! This will allow the economy to grow at a sustainable rate and lift Britain out of recession.

    L.I.B.O.R.
    Lying Imbeciles Bring Obligatory Retribution,
    They sup with the devil to plunder and steal nations.
    Flesh eating Banksters with a zombie spirit,
    Now hold the world to ransom, with no writ.
    Their mansions and flashy cars are a lie,
    It deceived no one, for the public is in battle cry!
    Austerity is a buzz word, to use as a weapon,
    The suffering masses will stand as a legion.
    Against the capitocracy, enjoying its ill gotten gains,
    Fraudulent fixers need to be put in chains.
    The regulators turn a blind eye, towards these thieves,
    Jewels are stolen and they are surprised by these beeves.
    Old boy network, of the Eaton Brigade,
    Makes the system corrupt, where justice is a charade!

    Syed Shabbir Jafer Razvi
    Balham, London
    Sunday 19th August 2012 2.00am

  • Mike 4th September 2012 at 4:27 pm

    Bonfire – yes! What really worries me is that the new head of the FCA -previously second in command of the FSA said that he had “many friends” in banking and he felt that they we’re sorry for previously miss selling, had learned their lessons and would no longer be a threat to us. He of course went to Eaton and then Cambridge! POPPYCOCK! He is just more of the same, looking after his banking friends probably with a view to a future golden job with them. His perception stinks especially after missing all previous miss selling, LIBOR fixing and the crash.

  • Maurice Edgington 4th September 2012 at 10:32 am

    I agree with most of what David Davis says but would prefer to hear such comment from the people who actually have the power. For almost 25 years the people with the power, PMs, Chancellors etc have demonstrated that their main ambition is to get elected and remain elected. For that they have had to avert their attention from mis-managed banks and end up where we are today. Here are a few ideas for the idea starved politicians.
    1) Offer tax payment incentives. Pay on time or early and get a discount.
    2) Dismantle the Working Tax Credits and Child Tax Credits system designed by Gordon Brown, completely and introduce higher allowances and highe tax codes to encourage people to actually work.
    3) Divert some funding to a unit, independent of the HMRC and other similar bodies, to look into benefit fraud and take positive action.
    4) Appoint an independent body to identify suitable land for residential, commercial and affordable housing projects then fast track the planning system.
    Politicians please let me know if you want a few more ideas to have a think about!

  • David 4th September 2012 at 10:03 am

    Let’s just hope that when it comes to a bonfire of regulation that the financial services industry is not excluded from it. The FSA’s useless pursuit of small firms and ineffective regulation of the banks is what is helping to fuel the depression that we are in. Small firms do not pose the risk that the FSA think and they should stop treating tiny one man firms as if they are Barclays Bank!