News

June 28, 2013

"Radical shift" needed for growth, says BCC

George Osborne's Spending Review hasn't gone far enough, according to the British Chambers of Commerce (BCC).

John Longworth, BCC director general, called for a "more radical shift" in public expenditure in order to secure Britain's future competitiveness.

"In many respects, businesses will be encouraged by what they have heard from the Chancellor," he said. "Yet more must be done. For our economic future to be great, rather than just acceptable, Britain needs a more radical shift in public expenditure to underpin a truly enterprise-friendly environment. Infrastructure, exports, and access to finance must be top priorities, not just for the next few years but for decades to come."

He continued: "The Chancellor has done his best to set out a prudent fiscal position and re-prioritise resources in favour of growth, given the constraints he was under. But we have only just started to reshape public spending to support growth and business will want to see more action. Westminster as a whole, together with the mandarins of the civil service, must recognise that from 2016 onwards, Britain needs a fresh approach to public spending to ensure its future competitiveness – even if the economy is improving."

The BCC welcomed announcements on infrastructure spending, but director of policy, Dr Adam Marshall, said: "Infrastructure projects are too often promised and too rarely delivered in this country, and that cycle must be broken. This commitment must now be translated into action on the ground, and quickly."

Other business groups had similar concerns. John Allan, national chairman of the Federation of Small Businesses (FSB), said: "It is good that the Government has taken a long term view of how to plan capital spending to the end of the decade. However what we now need is a clear timetable for delivery."

And the unveiling of a watered-down delivery of the Heseltine plan – aimed at moving central funding out to Local Enterprise Partnerships (LEPs) – was greeted with dismay. Phil Orford, chief executive at the Forum of Private Business (FPB), said: "The allocation of £2bn to the single local growth fund is no doubt the biggest disappointment of the day. It doesn't give the long term commitment businesses were looking for."

BCC's John Longworth said: "We are not surprised to see that the Single Local Growth Fund has fallen far short of initial expectations. As long as the Whitehall civil service retains its iron grip over the public finances, radical devolution to our cities, towns and counties will be little more than a constant mirage on the horizon."