Brown policies damaging UK

THE Institute of Directors has warned that Chancellor Gordon Brown's 'tax and spend' policies are damaging the UK because more tax means less growth in the long term.

The IoD said two-thirds of the projected rise in the tax burden was still to feed through.

Chief economist Graeme Leach said: 'In an advanced economy such as the UK, extra public spending is unlikely to increase long-term growth, but extra taxation is likely to reduce it.

'The double jeopardy from taxation and demographics is just around the corner.'

The IoD said there should be a new third rule for fiscal policy to reduce the tax burden as a proportion of the size of the economy.

The two existing fiscal rules were insufficient to restrain tax and spend policies, the Institute claimed.

Red tape is costing the UK economy £1bn more than a year ago, according to the Institute of Chartered Accountants in England & Wales.