Government needs to clarify economic priorities to ensure long-term growth – EEF

THE outlook for growth has improved but there is still a long way to go to create a more sustainable recovery, manufacturers have said.

In a new report, EEF, the manufacturers’ organisation, said that despite making some progress, the government needed to be clearer about its economic priorities and ensure the whole of the legislative was geared towards achieving them. In this way, the current positive data could be transformed into long-term growth and improved living standards.
 
The assessment comes a year after EEF published its industrial strategy and recommendations in The Route to Growth. It set out the case for an over-arching, cross government growth strategy that contained four key ambitions and 10 measurable indicators which had to be met or, be in progress by 2015, to achieve sustainable growth.
 
A year on and EEF has warned that, although the government has taken a number of positive steps to encourage investment in new equipment and research and development and to support exporters, there is only limited progress in creating a more balanced growth.

It said that in particular, there had been little improvement in the contribution of investment or net trade to growth in the UK and that despite a favourable exchange rate, exports in the UK 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.

It said only one of its four growth ambitions – relating to innovation – had been clearly met, although there had been progress on the ambitions relating to the Cost of Doing Business and Creating a Skilled and Flexible Workforce.

The organisation also warned that insufficient progress was being made in creating the joined up approach across government needed to ensure that its policies were consistent and that the issues most important to growth were adequately prioritised.
 
Richard Halstead, Midlands region director of EEF, said: “We’re seeing more signs that the growth engine is up and running but, we still need clarity of where we are driving. Industry is feeling 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.
 
“There are, however, still a number of risks of the economy being knocked off course.  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.”