British Chambers of Commerce leader calls for creation of business bank and says ministers doing too little to boost infrastructure
The boss of one of Britain’s largest business groups has hit out at the government’s indecision and inaction on boosting economic growth and criticised last week’s infrastructure push as too little to make a real difference.
John Longworth, director general of the British Chambers of Commerce, has criticised ministers for not doing enough to turn around the “plodding growth” in the economy.
Writing in the Observer newspaper, he said: “Our political class - now adjourned for its summer break - wants companies to invest, create jobs and export more. All are laudable goals and ones that we would share. Yet there’s a fly in the ointment.
“Politicians seem to believe that businesses must be willing and ready to “strain every sinew”, without doing the same themselves. Over recent weeks, we’ve seen a flurry of announcements from a government eager to demonstrate that it is “doing something” about growth.
“Unfortunately, it’s not enough.”
Longworth said last week’s push to boost investment in rail infrastructure was welcome but the projects “won’t start before 2014 and most of them have been trailed already”.
He added that the government’s aviation strategy, also published this month, had “a gigantic hole in the middle as airport capacity in the south east was again kicked into the long grass”.
“Companies recognise that ministers can’t magically alter world economic trends and that a solution to the ongoing eurozone crisis is not in the gift of Westminster.
“Yet those same companies will hold ministers to account when it comes to the levers they can control. The government could act far more boldly to improve the UK’s infrastructure, which is the essential underpinning of economic growth. At the same time, it must take a tough decision on aviation capacity, without which our ability to trade with the rest of the world will suffer.
“Since infrastructure investment here is insulated from the eurozone crisis - unlike exporting - it would create short-term confidence, jobs in the medium term and long-term competitiveness.
“Ministers are right to use the public sector balance sheet to try to kick-start key projects. But why not go further and attempt a large-scale securitisation programme that unleashes private sector money for major infrastructure without piling further pressure on the deficit?”
Longworth called for the government to create a business bank, which would “ensure that there is always funding available to back bona fide growth companies, as in the US and Germany”.
“Although this would only start to deliver in the medium term, it would deliver an up-front confidence boost that is not to be underestimated,” he said.