We must cut taxes and red tape to prepare Britain for the ‘new normal’

The end of the beginning approaches. Construction sites, DIY stores, and food chains are beginning to safely reopen. There are some simple guiding principles that the Government should be following from now to ensure the Prime Minister’s commitment to the motto salus populi suprema lex esto – our health and welfare are the supreme law.

We put the economy into lockdown to secure the health of citizens, precisely because we know that the value of human life is worth the production loss. But each extra week imposes accelerating economic costs.

Government forced revenue to fall to nil for a large number of firms. Any future response, therefore, must ensure that businesses are able to begin making up for lost revenue and rebuild their capacity.

Corporate welfare, rates relief and loan guarantees should be continued only as long as forced closures – they should be in proportion too, to the level of restriction still in place in each sector.

State support cannot last forever. Firms must learn to adjust to a new normal. While every business will blame their failure on Covid-19 we cannot, and should not, save firms that fail when things reopen. Inefficient businesses drain capital. The longer they do the worse it is for investors, creditors and customers. If taxpayers are involved it gets even worse; rather than the logic of rates of return we get appeals to the court of public opinion.

Politicians impose red tape and cost barriers in normal times, essentially because they believe that the world should not change, or at least not as quickly as it sometimes appears to be changing. All too often, voters accept the trade off that this will make all of us poorer.

You can no longer use regulation to hold back change if the economy is falling off a cliff. Politically difficult decisions will need to be made, and Boris Johnson has the majority to do it. For years we’ve known well the competing positions of builders, planners, and Nimbys, older voters and young. But again, the world has changed. Red tape costs in planning reach up to a third of the overall price tag. It was an unsustainable cost before; now it is insufferable.

Transactions need to bounce back to get the housing market from a total deep freeze into a state that will help get the country moving – so stamp duty has got to go. This is vital for all the things the land market is connected to: care homes and social care, even funeral homes are linked to the housing market often through equity and release.

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