Outgoing director general says government letting short-term politics damage growth

The outgoing director general of the CBI has hit out at the coalition government’s localist planning policies in a speech saying the government has failed to set out policies for economic growth.

Richard Lambert listed a range of “micro” policy decisions taken by the coalition which he said were having a damaging impact upon economic growth, including localism, the move to Local Enterprise Partnerships, and the Financial Services Authority’s mortgage market review.

He said: “If growth is necessary to restore our public finances, and business investment and trade are what will make that growth possible, then this needs to become the guiding priority for domestic policymaking.

“And the coalition government is by no means firing on all cylinders in this important respect.”

Detailing policy failings since the government’s election in May last year, he said: “There’s the localism agenda, which has thrown an extra level of uncertainty into the planning system and led to the poorly-handled introduction of the new Local Enterprise Partnerships.

He also said the carbon reduction commitment had been converted into a £1bn tax on business, “removing the incentives for change from many companies.”

He said: “The Mortgage Market Review is being driven by the Financial Services Authority rather than the government, but this is not the right time in the housebuilding cycle to be making mortgages harder to obtain.”

He also listed the lack of a clear aviation policy and uncertainty around the new Bribery Act as damaging to business. He added: “The politics that are behind many of these initiatives are clear enough. But it’s odd that the government should be willing to push aside short-term political considerations when it comes to making spending cuts, but not when it’s addressing the growth agenda.”

Lambert instead called for the government to focus its attention on help for high-growth small and medium-sized business, regardless of which sector they were in.