Coalition must find a strategy to deliver jobs and growth
EARLIER this month, Chamber research found that around half of the businesses across Derbyshire feel the UK is currently in recession, with the other half disagreeing.
Whatever your perception, or indeed the true reality of the situation, it is clear that economic growth is slow.
I've always believed that the East Midlands' economy is ahead of the curve compared with other parts of the UK, thanks, in part, to the number of global manufacturing giants and their respective supply chains based here.
This is why it always amazes me that there seems to be a lack of overall strategy to help them to deliver the growth our economy needs, something TUC leader Brendan Barber also reflected on in the pages of this newspaper just a few days ago.
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It would be wrong to pour scorn on everything the Coalition has done – it has delivered an economy, underpinned by historically low interest rates, that is far more stable than that of many of our European neighbours.
But while moves to bring down the deficit, cut back unnecessary regulation, reform employment law and use central Government procurement more strategically to support businesses of all sizes are starting to yield results, they are still tactical measures rather than part of an overall strategy.
In short, we can still go much further to help firms deliver the economic growth the country needs, now and for the longer term.
For example, if Government wants business investment which delivers higher productivity and jobs growth, then why did it cut capital allowances, push through inflation-busting rises in business rates, and give inward investors the signal that Britain was closed to skilled workers from elsewhere?
Surely, the smart solution would have been to provide real incentives for capital investment and introduce a major infrastructure development programme.
And if Government wants firms to invest in people and skills at a time of record youth unemployment, it needs to signal a major increase in the flexibility of the UK labour market – not bring in complex shared parental leave rules, extend flexible working or abolish employers' ability to discuss retirement with older workers.
The smarter move would be to stop tinkering with employment law, make it easier for firms to hire skilled workers and give them the ability to deal with unproductive ones without fear of litigation.
Also, give businesses a major say in where money for skills development should be spent to meet the needs of the local labour market.
None of this is rocket science – the long-term deal that the private sector wants to strike with the Government is a simple one.
In exchange for facing up to increased variability and risk in the global economy, business leaders want stability, clarity and positive, pro-business policies.
That means shifting the focus from short-term gimmicks to a long-term industrial strategy which frees up the labour market, pump-primes infrastructure, encourages investment and helps improve access to finance for viable businesses.
Ministers need to realise that Government is still a major purchaser, a maker of markets and the guardian of Britain's infrastructure and skills policies and unless it acts boldly to discharge those responsibilities UK business won't be able to deliver to its full potential.
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