Tory questions economic strategy

1 October 2011 Last updated at 01:54 ET

Andrew Tyrie said there should now be a relentless focus on improving living standards

The government is not doing enough to promote economic growth, a prominent Conservative party figure has said.

Commons Treasury Committee chairman Andrew Tyrie called for tax cuts for business and questioned government initiatives such as the Big Society.

Some of his views are shared by other Tory backbenchers, BBC political correspondent Iain Watson said.

However, Chancellor George Osborne has suggested there might not be tax cuts before the next general election.

According to Mr Tyrie – who chairs the cross-party treasury group of MPs – the government is pursuing policies more suited to an age of abundance rather than austerity.

Living standards

In the pamphlet for the pro-free market think thank, Centre For Policy Studies, he said the government had to review its positions on the reform of public services, the increase in overseas aid and some aspects of its environmental agenda.

The pamphlet, called It’s the Economy, says: “Without the lynchpin of a clear strategy for growth in place, other attempts to provide a more appealing theme than austerity are unlikely to succeed.

“The Big Society; localism; the Green strategy – whether right or wrong – these and other initiatives have seemed at best irrelevant to the task in hand, if not downright contradictory to it; likewise the huge spending hike on overseas aid and the cost of the Libyan expedition.”

He said instead there should now be a relentless focus on improving living standards.

Mr Tyrie called for the tax system to be simplified and business taxation to be reduced, and said he wanted to see fewer regulations and further reform of labour laws.

“There is much to do, and it is not just a question of gaps in policy,” he said.

“A coherent and credible plan for the long-term economic growth rate of the UK economy is needed.”

The issue is likely to dominate at the Conservative Party conference which begins in Manchester on Sunday – economic policy is being debated on Monday.

‘Enterprising economy’

Mr Osborne said the possibility of tax cuts depended on “how things develop” between now and the next general election.

In an interview with the Daily Telegraph, the chancellor said tax cuts “should be for life not just for Christmas”.

“We’ll see how things develop in the rest of this parliament,” he said.

“I’m a Conservative who believes in lower taxes. They lead to a more enterprising economy.

“But I’m not somebody who believes can fund lower taxes by borrowing more money because that is a deceit and the public are smart enough to see straight through it.”

Unfair dismissal changes

He is also expected to tell delegates of his plans to help business by changing employment laws.

He will say that workers will only be allowed to sue for unfair dismissal after two years in the job – rather than the existing minimum of 12 months.

Last year there were 236,000 cases, with an average award for successful complainants of about £9,000.

Workers will still be able to take action immediately if they suffer discrimination, but by reducing the risk of tribunals for unfair dismissals the government hopes bosses will feel more confident about hiring people.

The TUC has said extending the period to two years will amount to “a charter for bad bosses”.

The government is also due to announce that it will launch a consultation on restricting the amount of time civil servants can spend working as union representatives.

At the conference, which starts on Sunday, the Conservative leadership is expected to face demands from the right of the party to take a tougher line on issues such as Europe, immigration and social policy.

Influential Tory MP Nick Boles has urged Conservatives to focus on issues important to the public, not “petty obsessions”, at the conference.

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