IoD calls for a major changein economic management

Fiscal policy is inneed of a major boost the Institute of Directors (IoD) said today ahead of December'sPre-Budget Report.

In its submission theIoD argues for a major change in the management of the economy and calls on theChancellor to introduce a New Third Rule for fiscal policy a commitment toreduce the tax burden as a proportion of GDP, over the course of the economiccycle.

Without a New ThirdRule, the IoD said that the two existing fiscal rules (the Golden Rule and theSustainable Investment rule) cannot stop the tax burden rising higher andhigher.

The proposal for a NewThird Rule reflects the concerns of IoD members. A recent IoD member survey, which asked whether the conduct offiscal policy was favourable or unfavourable towards business, showed a netbalance of 30 per cent stating it was unfavourable.

Graeme Leach, Chief Economistat the IoD, said:

The New Third Rule wouldprovide a tremendous long-term boost to business confidence in the UK. It wouldalso be extremely attractive to overseas investors in the UK. A government mindful of the New Third Rulewould have to rein in tax and spend policies.

Ends 21.11.03 No.209

Notesto editors

Copies of the IoD's Pre-Budget Report submission - Timefor a Third Rule - are available from the IoD Press Office on 020 745413264

The Institute ofDirectors is a non-party political independent organisation with around 55,000members. In addition to its wide range of business services, the IoD providesan effective voice to represent the interests of its members to government andkey opinion-formers. It also brings the experience of business leaders to bearon the conduct of public affairs

Contact Points:

Richard Taylor, PressOfficer, tel. 020 7451 3264

Mobile and out of hours. 07721 734886

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobile and out of hours: 07764 883420

Email. press@iod.com

Web. www.iod.com