By Marcus Leach
Next month’s Autumn Statement must combine a clear programme of reform to boost business growth for the lifetime of this parliament with immediate measures to tackle the deteriorating economic outlook and plummeting confidence according to Britain’s manufacturers.
Publishing its submission Engineering Employers Federation (EEF), the manufacturers’ organisation, argues that the Autumn Statement must drive forward the reforms that will deliver stronger, sustainable and more balanced growth.
“This Autumn, the Government must get its Growth Plan back on track," Commenting, EEF Chief Executive, Terry Scuoler, said.
"Manufacturers are looking to invest but they need to see Government take the right decisions on issues such as boosting competition in the banking sector, reducing employment regulation and addressing the cost of fighting climate change. They also need to hear how Government plans to transform the business environment by the end of this Parliament.
“But timely and targeted measures are required now to boost investment and growth. Last year, the biggest threat to growth came from our fiscal deficit. Today the biggest threat to reducing that deficit comes from weak growth. Failure to act now will only make the future challenges even bigger and risks undermining our hard-won fiscal credibility.”
A suite of announcements on banking reform, securing the future for energy intensive sectors and the second phase of the Growth Review is expected from the Chancellor alongside the Autumn Statement. It is critical that we see bold actions if government is to deliver its complementary aims of reducing the deficit and driving forward private sector growth.
On banking reform we need to hear a strong positive response to the ICB recommendations to boost competition in the banking sector by enhancing the sale of branches from Lloyds Banking Group and improving the switching process for customers not receiving the right service from their bank to move to an alternative provider.
The Chancellor must also introduce a compensation package which effectively targets those energy-intensive industries most affected by its climate change policies.
Aside from these actions there remains a significant reform agenda across the remainder of this parliament. Producing an effective plan for growth is not an easy achievement given limited fiscal headroom. However, the Growth Review is not currently targeting the most important drivers of growth or systemically dismantling the biggest barriers faced by business.
For manufacturers the biggest priorities for growth are reducing the burden of taxes and regulation; making it easier for companies to find the finance and skills they need to grow their businesses. A refocused Growth Review should be announced in the Autumn statement. It must also make to clear to business where the Growth Review is heading in terms of the business environment it is seeking to create by the end of this Parliament in 2015.
But with the economic outlook worsening, pressing on with reforms to boost our growth potential is not enough. The biggest threat to fiscal credibility and meeting the government’s Fiscal Mandate now comes from weaker growth. The UK needs measures that will have an immediate impact on investment and growth and failure to act now will only increase the size of the challenge further down the line.
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