Data from manufacturers organisation EEF says that progress on the key pillars of an industrial strategy is not as advanced as the economic data might suggest, citing that exports have made less of a contribution to growth than in France, Italy or Spain.
Manufacturers’ organisation EEF says that a more sustainable economic recovery is much further away than the recent data economic data and highlights of the government’s Industrial Strategy anniversary would suggest.
EEF acknowledges that the Industrial Strategy is delivering on several fronts but the government needs to be clearer about its economic priorities and unite every part of government to achieve them, to translate the latest round of positive data into long term growth.
The assessment comes a year after EEF published its industrial strategy and recommendations in its The Route to Growth white paper.
This paper recommended that political parties and government departments unite to deliver four key ambitions and 10 measurable indicators which had to be met or, be in train by 2015, to achieve sustainable growth.
EEF claims there is only limited progress in creating a more balanced growth. In particular the analysis shows investment and net trade levels are only making a small impact exports from the UK, which have made less of a contribution to growth than in France, Italy or Spain and that business investment has made a stronger contribution in the United States, Canada and France.
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The Industrial Strategy: Shortcomings in progress
– UK 159th in world for business investment as share of economy
– Business investment 25% below pre-recession peak, contributing just 0.06% of annual growth
– Other countries making faster progress towards more balanced economy
– Net trade more positive than UK in France, Italy & Spain despite UK’s favourable exchange rate
– Only four of EEF’s 10 growth targets met or on track for 2015
And it says that only one of its own four “Growth Ambitions” – on innovation – has been met, with progress found wanting on the Cost of Doing Business and Creating a Skilled and Flexible Workforce.
It warned that insufficient progress was being made in joining up government to ensure policies were adhered to.
“We’re seeing more signs that the growth engine is up and running but, we still need clarity of where we are driving” said chief executive of EEF Terry Scuoler. “Industry is more confident and is in better shape to deliver the investment and exports we need for a stronger economy and the government has taken steps to help it deliver this.
“What we need now is absolutely clarity on where we are seeking to get to and, all of government pulling in the same direction to get us there.”
The review, Industrial Strategy – One Year On points out a series of shortcomings in the industrial strategy’s progress including faster delivery of infrastructure, better adherence to industrial policy across departments and more, better skilled people leaving education.
EEF recommends these government priorities:
1. Get competition in business banking going and get more businesses engaging with banks by measures to improve full account portability, increase incentives to switch accounts and reduce barriers to entry for Challenger banks.
2. Develop a more strategic approach to Infrastructure investment by accepting the Armitt Review recommendations for a National Infrastructure Commission
3. Take action to improve the competitiveness of electricity prices paid by business through tight control of support for low carbon investment, making a long-term commitment to support for energy intensive industries and, addressing unilateral costs imposed by Carbon Price Floor
4. Speed up progress on deregulation, particularly in the areas of employment and climate and environment
5. Develop plans to secure greater commitment across the EU for reduced regulation and for implementing EU regulation in a lighter touch way
6. Build consensus to reform public funding of skills investment to put money in the hands of the customer