As the Labour Party Conference gets underway in Brighton, the British Chambers of Commerce is setting the Opposition a challenge: what concrete measures do they believe will transform Britain’s economy from being merely good, to being truly great?
Gradually, we are starting to see more evidence of an economic recovery in the UK. Businesses are confident, with increased investment intentions and soaring exports, particularly in the service sector. And as a result, we have upgraded our most recent growth forecasts for the next three years, predicting GDP growth of 1.3% in 2013. But although this is good news, it isn’t good enough. To remain a global leader, Britain must re-double its focus on growth, and politicians need to do their bit to make this a reality. The political elite must put economic growth at the forefront, as this creates the wealth needed to pay for the things we take for granted such as the NHS, welfare and pensions.
Therefore, the British Chambers of Commerce is calling on the Labour Party to set out its plan for achieving a great economy. We believe that the following components would go a long way to making a real difference – but how would the Labour Party address each one?
• Introducing a Business Bank with the scale and risk appetite to nurture a British Google, Apple or Samsung. A state backed Business Bank would rebuild confidence in the financial system by lending directly to viable, fast-growing and innovative businesses. How would Labour make this happen, and address the long-term business finance failure here in the UK?
• Large-scale investment in our roads, railway networks, ports, airports and digital connectivity as without this, business cannot function. This should include High Speed 2, but not be limited to it. Investment in infrastructure gives businesses confidence to invest, and creates jobs. We also need an energy security policy that will serve Britain for the long-term. Would Labour commit to a shift from current to capital spending, to ensure the UK’s infrastructure is fit for purpose for the long-term?
• A drastic culture change on international trade is needed – both government and business must make this a priority if we are to achieve an export-led recovery. As a nation, we spend only 0.05% of GDP on promoting British goods and services overseas, and attracting investment to our shores. How would Labour make promoting exports a top priority, and what would it do to support businesses looking to trade overseas?
• Solving Britain's deep-seated youth employment and training problem. We cannot just leave it to teachers to inspire and instil enterprise in their pupils. Business must be engaged at an earlier stage, so that young people know what opportunities are available to them in the private sector. In Britain, we have some of the best universities and colleges in the world. It is important that they maintain a leading position so they can equip people with skills to benefit the industries of the future. How would Labour ensure that Britain’s universities and colleges remain at the top of the leader board, and how would it put companies in the driving seat to raise skill levels and aspiration across the workforce?
• British businesses remain determined to see a renegotiated relationship between the UK and the rest of the European Union, with more powers exercised from Westminster rather than Brussels. Will Labour commit to addressing the Europe question, and stop brushing it under the carpet?
• Creating an environment in which businesses can thrive – rather than being hit by ever-increasing costs. Under the last Labour government, the cost of doing business increased hugely due to employment law changes, more regulation, and higher taxes. What would Labour do differently to ensure that businesses can compete and create wealth, rather than being hit by increasing costs?
Commenting, BCC Director General, John Longworth, said:
“A few quarters of positive statistics are not the same thing as an economy fit for the long term, and we cannot be lulled into a false sense of security. Yes, we are on the right track, but politicians cannot allow themselves to become distracted with other priorities. The economy has to remain at the top and we mustn’t allow ourselves to sit back and think that the job is now done.
“We shouldn’t be satisfied with an economy that is at the same level as before the collapse of the Lehman Brothers. If we are to recover six years of lost growth and momentum, it’s not a good performance we should be aspiring to, but a great one. We have upgraded our growth forecasts for the next three years, hoping to reach growth of 2.5% in 2015. But we should be aiming for north of 3%, and there is no reason why this cannot be achieved with the right mentality, drive and determination. Currently, there seems to be a lack of ambition from our political class.
“If Britain is to compete with the best economies in the world, politicians must work closely with business, with an eye on long-term success, not on short-term headlines. The first step in moving our economy from good to great is to increase investment. That means creating the conditions for private-sector businesses that are sitting on cash piles to invest in people, machinery and premises. Secondly, we must address the long-term failure in business finance. We will never have the global, wealth creators of tomorrow if small and mid-sized firms cannot access the capital they need to expand. And international trade has to move higher up the agenda – so that both business and politicians are always thinking global. If governments do everything in their power to create the conditions for growth by promoting investment and supporting trade, businesses will respond through innovation, job creation, and wealth generation.
“Entrepreneurial spirit is re-kindling in the UK. We have the potential to be a world leader, in so many innovative sectors of business, but we have to be hungry to lead. Accepting second-rate status is not enough.”