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.”