Brown given 20-point plan for business

BUSINESS will this week set out a series of demands for Gordon Brown, who takes over as prime minister on Wednesday.

The Institute of Directors (IoD) is to send him a 20-point plan for what needs to be done “to maximise economic growth and wealth creation”.

It comes as Brown is putting the finishing touches to his Downing Street team and a planned shake-up of Whitehall.

He is expected to reveal two additions to his group of special advisers this week.

Nick Pearce, chief executive of the left-of-centre think tank IPPR, is expected to join him at No 10. Gavin Kelly, an IPPR old boy, is also likely to be recruited.

They will join Dan Corry in Brown’s inner circle. Geoffrey Norris, Tony Blair’s special adviser on business, is expected to remain at Downing Street, while Shriti Vadera, a special adviser to Brown at the Treasury, is set to accompany him to No 10, although it is not clear what role she will fill.

The IoD’s programme focuses on making life easier for business. The UK’s regulatory culture needs to be radically changed, it says, rewarding officials for their efforts in deregulating the economy rather than making new rules. It also wants cuts to the business tax burden, which it says is approaching a “tipping point”.

This could be done, it says, by restricting the growth of public spending to 1.5% a year on top of inflation after 2008, rather than the 2% planned by Brown. The IoD also says that Brown should insist on tougher public service agreements between the Treasury and Whitehall.

Other measures urged include following through on plans to liberalise planning; encouraging competition in the provision of public services; and an early decision on new nuclear power stations. It also wants universities to be freed from the £3,000-a-year cap on fees.

But Miles Templeman, director-general of the IoD, warned Brown against change for the sake of it. “We’d empha-sise the need for some changes but continuity is also very important,” he said. “What we don’t want is a whole raft of new initiatives. And we do need things like the skills agenda to be pursued.

“If there is going to be more tax on private equity, let us have less tax elsewhere. Brown has some way to go before he convinces our members. One way to do it, if he plans to increase the take from capital-gains tax, would be to take some bold action in reducing or removing inheritance tax.” Analysts see a 90% probability of a hike in interest rates by the Bank of England next month, meaning it is regarded as the nearest thing to a “done deal” since the monetary policy committee starting raising rates last August. But they also believe that 5.75% is likely to represent the peak, according to the survey by Ideaglobal.com, a financial research company.

This is in contrast to the money markets, which are discounting a rise in Bank rate to more than 6%. [via]