EEF growth plea
“Growth” is the EEF’s message to the government in a report from the federation which criticises inconsistent approaches to the delivery of economic growth.
“We all know that we need stronger growth built on firmer foundations, but the economy and re-balancing have hit the buffers. We will only get back on track if the government demonstrates the same clarity and single-mindedness on growth that it has done on reducing the deficit,” says EEF CEO Terry Scuoler, “business is seeking certainty to invest, but too often it is left with the impression that government is responding to events, rather than leading on growth.
“This will not change until government is clear about its economic ambitions and sets out some simple benchmarks to measure progress – just as on deficit reduction,” adds Scuoler, “to do this we need a new economy-wide industrial strategy for achieving stronger, better-balanced growth. This must become the definitive statement of the government’s economic intentions and the guiding principle for every policy and spending decision from now to the election and beyond.”
In its report EEF highlights the consensus that has emerged on the need for a new UK economic model, based on trade and investment rather than on consumption and borrowing. The on-going eurozone crisis and continuing uncertainty in the UK economy, however, mean that that this new-economic model remains a long way off.
The lack of a clear long-term plan for the economy has meant that government spending on growth has been opaque and lacking in focus while a there’s been a lack of accountability and coherence on the delivery of growth across government, leading to welcome initiatives in areas like tax and apprenticeships funding being undermined by decisions elsewhere.
Symptomatic of these failings, has been the implementation of the Government’s Plan for Growth. This has focused on too broad a range of initiatives, with no single Department or Minister having overall responsibility for delivery.
The EEF says the government needs a clear vision of a better-balanced economy and an economy-wide industrial strategy for delivering it.
The UK needs more companies, a lower cost of doing business in the UK, more globally focused companies expanding in the UK e.g. the number of companies with 25% or more of turnover, and a more productive and flexible labour market
”This shouldn’t be a plan for picking winners; it should be about creating the right environment for any company seeking to grow through investment and exports,” says Scuoler.
Progress towards the growth ambitions outlined in the report must be monitored and reported annually alongside the Budget, says the EEF, a Cabinet Committee for Growth jointly chaired by the Prime Minister and Deputy Prime Minister.
The sub-Cabinet Growth Implementation Committee, announced on September 6th could fulfil this function, but this should be about more than implementation, which is the back-end of the policy process.