ISH businesses are increasingly frustrated at the government’s failure to address the recession and are planning to cut back on investment if policies keep being delayed or torn apart by infighting, the Confederation of British Industry has warned.
The influential group has been supportive of the deficit reduction plan and schemes like Funding for Lending that seek to boost credit to firms.
But it is beginning to lose patience with a government it sees as lacking any real focus on the economy.
“We do not have a sense the government has a coherent strategy for growth,” deputy director Neil Bentley told City A.M. “Businesses are getting frustrated at the amount of time it is taking to build momentum towards a growth plan.”
Bentley pointed to rows between the Treasury and the Department of Energy over low carbon technologies as evidence that the government is failing to give industry any stability over long-term policies.
He also called for clarity over the timetable of future policy announcements, including upcoming aviation changes.
“Firms base long-term planning decisions on policies. The worst thing for businesses is for the government to fudge policies, creating ambiguity,” he explained.
It comes after a weekend in which CBI chairman Sir Roger Carr called for a greater focus from the government on big business and the development of a more active industrial policy.
But the government disputed the claim that it is making slow progress, arguing that positive steps are being taken to boost growth.
“We are recovering from the worst financial and debt crisis of our lifetimes and the UK is not immune to the turbulence in the Eurozone,” said a Treasury spokesperson.
“The government has set out a comprehensive growth strategy and given businesses the certainty they need by sticking to its economic plan. Despite the difficult conditions, employment is rising and inflation is falling.”
However, the government faces opposition from some of its own MPs to its policies and those of the CBI.
“The CBI is right to say the government has policy wrong – the policy of Continuity Brown at the Treasury is not working and the overdependence on monetary stimulus is never going to work,” said Conservative MP Douglas Carswell.
“But they are calling for corporatism, in effect state handouts for big business. This might boost firms in the short-term but doesn’t create wealth.”
“Endless handouts have not worked – we need to address the underlying issue of competitiveness instead.”
AU REVOIR TO THE LONDON OLYMPICS AS ATHLETES HEAD HOME
THOUSANDS of Olympic athletes left London yesterday as the city returned to normal following two weeks of medal glory and sporting success. Mayor Boris Johnson said London 2012 had been “the greatest Games ever” but admitted it a “great relief” that it was now over.
At St Pancras International the French pole vault gold medallist Renaud Lavillenie (left) was joined by cycling silver medallist Gregory Bauge before catching the Eurostar back to Paris.
Workers have already begun transforming the Olympic Park to be suitable for the Paralympics, which will begin on 29 August.