A free-market think-tank with close links to Liz Truss and Kwasi Kwarteng has drawn up a ‘slash and burn’ blueprint of ideas that could form the basis of the government’s supply-side reform program to be set in next weeks
The paper by the Free Market Forum (FMF), a branch of the Institute of Economic Affairs (IEA), suggests scrapping free childcare hours, freeing up green belt land for housing, abolishing corporation tax and removing teacher training qualifications for graduates.
Other ideas include remote learning so parents can choose the best teachers, amending the Equality Act so that white working-class boys are better protected, and restoring the link between taxes and family income so that women’s income married can be seen as part of her husband’s.
Truss plans to present a package of supply-side reforms, mainly including deregulation, as part of the chancellor’s medium-term fiscal plan later this month, but the government has remained tight-lipped on the details .
Kwarteng is expected to announce changes in eight areas, including planning, business regulation, childcare, immigration, agricultural productivity and financial services.
The prime minister’s allies hope her proposals, a key element of her growth drive, will help put her on top after a bruising two weeks since the mini-budget triggered market turmoil, followed by a Conservative party conference which was dominated by a Revolt of the top tax rate of 45p after a rebellion by MPs.
The foreword to the Free Market Forum document, published in September last year, said it aims to “incubate and promote ideas” among Tory MPs about future policy direction.
The document is billed as “a collection of policies for a better and brighter Britain by the end of this decade”, which it says will “start the conversation about where we go next and put the FMF at the forefront of ‘these discussions’.
However, a Labor source said: “It is deeply worrying that the Prime Minister and Chancellor, neither of whom have any mandate from the British people for their plans, are supporters of this shadowy group. Having crashed the economy, Liz Truss must now distance herself from these slash and burn ideas and the people behind them.”
In one chapter, the IEA’s Annabel Denham proposes scrapping free childcare provision, arguing that the 15 hours a week it provides costs the state around £6 billion a year “but there is not much to show”.
It suggests adult-to-child ratios are “unnecessary and harmful” and early years assessments should be abandoned.
Another proposal, from Cabinet Office minister Brendan Clarke-Smith, suggests restoring the link between tax and family income.
“Under the previous system … a married woman’s income had been seen as part of her husband’s,” he writes. “Of course, attitudes toward women’s careers have changed … however, the debate over the merits of individual taxation has continued.”
Tory MP Richard Fuller, currently economic secretary to the Treasury, suggests moving education online so parents can choose teachers for their children. “The ability to learn at a distance offers[s] opportunities … giving schools the ability to identify the best teachers and provide access to time slots.”
Meanwhile, Sam Collins, the FMF’s director of outreach, is proposing a review of the “flat” minimum wage increases as they are “set centrally for the whole country” but have led to “significant and damaging unintended consequences “.
IEA Research Fellow Professor Len Shackleton wants the government to allow graduates to teach in state schools without teacher training qualifications as part of lifting entry requirements for skilled professions such as law and social work.
Dr Kristian Niemietz, head of political economy at the IEA, is urging ministers to free up green belt land for more house building, a move likely to be unpopular with Tory MPs. It suggests releasing green belt land within 800 meters of a commuter station, which is not otherwise protected, with additional infrastructure paid for by taxing the increase in land value.
Other less controversial proposals include tackling NHS staff shortages, encouraging co-operatives and extending the business super deduction, which allows businesses to reduce their tax bill by up to 25p for every £1 they invest, to help to promote growth.
The IEA has inspired Truss’s policy prospectus and FMF alumni form the ranks of government, including the Prime Minister’s chief economic adviser Matthew Sinclair. It does not purport to represent the Prime Minister’s views.
He counts 60 Tory MPs among his “parliamentary supporters”, including Truss, Kwarteng, Deputy First Minister Thérèse Coffey, Level Secretary Simon Clarke and Trade Secretary Kemi Badenoch.
Former chancellor Norman Lamont and ex-minister John Redwood are also supporters, while his number 10 chief of staff, Ruth Porter, sits on the advisory board.
The thinktank was launched as a successor group to two other bodies: the Free Enterprise Group, an organization of Tory MPs founded by Truss at his party conference in 2011; and Freer, a joint initiative of Conservative MPs and the IEA, launched in March 2018.
Sam Collins, now head of the FMF, said: “Regulation has been estimated to cost the UK economy £220bn a year. If the Prime Minister is to succeed with her economic agenda, it will need an important reform to facilitate the formation and growth of companies.
“Many of the 30 policy suggestions in our paper focus on removing these barriers to growth that make it difficult to build homes, start businesses, create jobs or move into new sectors.
“But it’s not just the growth numbers on a spreadsheet that affect supply-side reform. The cost-of-living crisis facing British families is partly caused by government regulations which keep the prices of everyday items such as food, childcare and energy artificially high.
“Well-targeted supply-side reforms will not only help grow the economy, but also help improve the financial situation of the most vulnerable.”