A renewed focus on boosting economic growth should now be the government’s overwhelming priority, according to a major business survey released today ahead of the speech by the Chancellor of the Exchequer at the Conservative Party conference.
According to the survey, published by EEF, the manufacturers’ organisation, just under 80% of companies want to see new measures to strengthen growth in the UK economy. In contrast, just over a quarter still see reducing the UK’s structural deficit as a top priority. While business still sees fiscal credibility as vital, there is a growing realisation that we will only make sustained progress in reducing the deficit if the government has the strategy in place to deliver stronger and better balanced growth.
The survey also shows that whilst action by the UK government remains the top priority, the importance of the European economy to manufacturers was highlighted by the fact 40% of companies still want the government to press eurozone countries to make greater efforts resolve the debt crisis.
Furthermore, one third of companies wanted the government to work with European partners to accelerate measures to strengthen growth in the European economy.
However, there is little enthusiasm for changing the UKs relationship with Europe at this moment in time with just under 10% of companies regarding this as a current priority.
Commenting, Terry Scuoler, Chief Executive of EEF, the manufacturers’ organisation, said:
“Manufacturers have always supported the need to reduce the deficit and get the public finances back in order. However, this was conditional on government also committing to delivering on the plan for growth.
“We have seen promising announcements on infrastructure, access to finance and regulation. But, government has yet to demonstrate to business that it has the same clarity and laser-like focus on growth across departments that it has on reducing the deficit.
“The Chancellor must use his speech today to convince business that growth is the number one priority across government and that there is a plan to deliver it. The government has made a start with its Growth Implementation Committee but, this cannot just be about delivery. It must also ensure that all parts of government are working together effectively to deliver stronger and better balanced growth.
Last month, EEF set out its own plan for a strategy to deliver stronger and better balanced growth in its report, ‘The Route to Growth’. In this EEF called for the government to adopt four economic ambitions:
1. More companies bringing products and services to market
2. A lower cost of doing business in the UK
3. More globally focused companies expanding in the UK e.g. the number of companies with 25% or more of turnover coming from exports will increase
4. A more productive and flexible labour market
In the months leading up to the Autumn Statement, EEF will be looking for the decisions that the government takes on issues such as skills, Electricity Market reform, the Business Bank and, employment regulation to deliver on these ambitions.