As EEF’s latest survey highlights that manufacturers are facing the toughest trading conditions in three years, Terry Scuoler, CEO of the manufacturers’ organisation, calls on government to urgently address economic growth.
Our message to government is this: we know what you are trying to do on the deficit, but we need a clear plan on growth.
There is a consensus that before the recession our economic model was wrong– and that now we need a better balanced economy. We know that UK manufacturing, with its focus on investment and exports, can help recovery and be a driving force behind this new economic model. But our economy has stalled and with it efforts to rebalance.
To get thing moving again we need to re-clarify what kind of economy we are trying to build and the role of government in making it happen.
Firstly, we need government to be as relentless and determined on growth as it has been on reducing the deficit. In the Budget 2010 the Chancellor set out the fiscal mandate, providing a clear set of measurable, independently monitored, targets for public finances. We are lacking a comparable approach on growth.
This is vital. Every business knows that you need to cut costs in tough times, but you also need a strategy to move forward. Government must show us a cross-economy industrial strategy, setting out its route to a better-balanced economy. This shouldn’t be about supporting manufacturing alone, we need policies which will help all companies seeking to grow through exports and investment.
Step two is a coherent approach to supporting this type of growth across government. Too often, welcome initiatives to reduce tax burdens or increase apprenticeships, for example, have been undermined by policies in other areas like energy or regulation that add to companies’ costs.
A third and final element to get our economy going is accountability. We’d like to see a Cabinet Committee for Growth to hold Departments to account and progress should be independently measured and reported every year alongside the Budget.
EEF has summed up its vision of how to put these points into practice in a report on Industrial Strategy (available on www.eef.org.uk). We’ll be pursuing its application with all political parties, beginning at fringe events around this month’s party conferences, through to the Autumn Statement and at our national conference next March, just before the Budget.