Coalition failing on UK economy

The Coalition government might be doing a good job of slashing public spending, but it lacks the vision needed to get the UK economy back on track.

The criticism comes from outgoing CBI boss Richard Lambert, who used his final speech as boss of the lobby group to lambast the government's failure to outline a path to economic growth.

Lambert said: "The Government has not been nearly so consistent and focussed when it comes to policies that support growth. It’s failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship."

He said the coalition had made policy announcements without thinking about the damage they might do to businesses or employment.

He said spending cuts could easily remove 400,000 people from their jobs in the public sector. These people were relying on the private sector, particularly small business, to re-employ them.

Lambert said that Small and Medium Enterprises were likely to play a vital role in this - because they employ more lower skilled workers and because they're spread all over the country. But Lambert said such firms were under more pressure - multinationals are beginning to feel the benefit of renewed international trade and are seeing credit markets recover.

Smaller firms are still struggling to find banks to lend to them - another area where the government could act.

Lambert said the time had come to have a proper look at the Department of Business. He said the country needed a department with proper knowledge of business, and engagement with that community - "less of a talking shop, more of an action-oriented growth champion".

On a positive note Lambert welcomed government investment in technology, innovation centres and "regional growth hubs".

Lambert said action was needed on SME credit arrangements, since SMEs still rely on a small range of lenders. He said the government should act to increase the number of institutions willing to lend to smaller firms and look at non-bank finance like the bond market.

Go here for Lambert's detailed criticism of government business strategy. ®