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Free Enterprise Group Tories Urge Osborne And Cameron To Be Bolder

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The Tory Free Enterprise Group Headed By Elizabeth Truss Calls For Bolder Measures
The Tory Free Enterprise Group Headed By Elizabeth Truss Calls For Bolder Measures

Tories from the radical "Free Enterprise Group" wing of the party have been outlining what they would like to see ministers do to accelerate the reduction of Britain's deficit.

The group, set up by Tory MP Elizabeth Truss in October 2011, is concerned chiefly with the UK's plummeting performance on league tables on regulation, education performance and competitiveness.

They broadly support the coalition's policies but think they should go even further. Most of them believe that they have been watered down to appease the Liberal Democrats.

Their meeting on Monday came as tensions within the coalition on a range of issues were rising, particularly on the NHS reforms opposed by many Lib Dem peers.

Speaking at a gathering at the Institute of Economic Affairs in London on generating growth, several young Tory MPs, most of whom were elected in 2010, offered their wish-list of things they'd like to see Downing Street and the Treasury do in the coming months.

They are hoping that George Osborne will announce a raft of tax cuts in his 2012 budget next month, although the chancellor appeared to pour cold water on that pipe-dream during an interview with Dermot Murnahgan on Sunday.

Most of them accept that the Tories would become unpopular in the short term, but feel there is no choice but to take bold action to avoid economic stagnation in the longer term. All of these Tories are in safe seats - they can afford to offer grandiose ideas in a way many other Tories can't because they're worried about what will happen to them at the next election.

Sajid Javid, the parliamentary aide to George Osborne, warned that the Tories would have no choice but to go into the 2015 general election "saying we're going to have to have some more cuts," warning that Britain would come under sustained pressure from a double whammy of rising oil prices and ongoing eurozone uncertainty.

Witham MP Priti Patel went even further, suggesting "we're all dancing around handbags", arguing that countries like India were engaging with industrialists and businesses at every stage in their government's policy. Britain needed to "wake up and smell the coffee" and follow that example, she said, claiming that the UK was "desperately behind the curve."

For Truss, the South West Norfolk MP, the biggest concern is Britain's plummeting place in the global league tables for education, particularly maths.

She admitted that any changes to education would take ten years, but said it was vital for children to carry on studying maths until the age of 18. She urged ministers to pull funding further for degree courses which offered "no real value" - although she didn't pick out any particular subjects for criticism.

Truss also called for a radical reform of the maternity and paternity pay in the UK, arguing it should be more flexible and not geared automatically towards the mother getting the longer pay period.

She argued that Germany was the model Britain should look to, not just because the country introduced more flexible maternity leave - in which parents could still work part-time if they wanted to.

Truss claimed that 10 years ago Germany removed regulations on small businesses, essentially making it much easier for them to sack staff. She claimed this had a dramatic effect on cutting youth unemployment because it encouraged business confidence.

MP for Spelthorne Kwasi Karteng called for tolls to be put on Britain's five busiest motorways and for Network Rail to be dismantled, with the various train operating companies to manage the tracks their trains run on.

"There will always be an element of subsidy," Kateng said, but told the audience that the current level of subsidy was too high. He also called for the "medieval" system of licensing and regulating taxis to be dismantled.

East Surrey MP Sam Gyimah touched on radical ways of encouraging investment without borrowing; most controversial of which was a plan to use the £800bn sitting around in pension funds to invest in infastructure and business growth.

He claimed this was a low-risk investment, and was something "the Treasury are starting to look at," because it had worked in Australia and Canada.

As the session went on, the language became increasingly radical. Bury St. Edmunds MP David Ruffley urged Cameron to "call the Liberal Democrats' bluff" and opt for ever greater spending cuts. He called for the Department for Business Innovation and Skills to be abolished, saying: "If it didn't exist, you'd never seek to invent it."

"The cuts programme hasn't even begun properly," Ruffley concluded.

Last to speak was perhaps the most influential economist on the Tory backbenches, Andrew Tyrie, who chairs the Commons treasury committee.

He called on the Chancellor to accelerate the deficit reduction programme. "Don't worry too much about the short term polls. Get the job done and reap the rewards later in the Parlament," he said. "We will be giving people greater control over their own lives."

Attacking what he called a "global salvationist" policy towards green energy investment, Tyrie suggested that High Speed 2 and the wind farms rollout didn't make economic sense in the long run.

But Tyrie urged caution on tax cuts, saying: "You never know in advance what the behavioural effect of a tax cut will be. Tread carefully. Change the language from the language we are using now, to demonstrate a clear sense of direction."

George Osborne will hold his 2012 Budget on the 21st of March. Expect plenty more calls from Tories like these between now and then.

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