Fed up bosses tell ministers to get grip on crisis

The call came as new polling from the Institute of Directors revealed the damaging impact of low confidence in Britain’s growth prospects and concern over the effectiveness of the Government’s reform agenda.

Nearly half of the 1,277 business leaders surveyed said they had postponed at least one investment or employment decision this year because of uncertainties.

In a damning assessment of the Government’s track record, business leaders said ministers had been “ineffective in every area” of reform, whether it is taxation, regulation, education or infrastructure.

Graeme Leach, chief economist at the IoD, said: “Business is battening down the hatches in the expectation that the recession will continue for the rest of the year.

“Low confidence leads to delayed decisions, and delayed decisions further undermine economic confidence – it’s a vicious cycle.”

The findings of the survey came as no surprise to Yorkshire members of the IoD.

Jonathan Oxley, chairman of the West Yorkshire IoD, told the Yorkshire Post: “I can’t think of a single Government measure that has made any material difference to businesses.

“In my view, the continuing uncertainty in the eurozone and lack of faith in our banking sector are the biggest negative factors when it comes to confidence about investment and growth.

“The Government should concentrate on doing what it can to influence European politics. Once there is some stability in Europe, it can leave business to get on with what it does best.”

He said the continuing instability in Europe is stifling growth across the continent.

He added: “The Government has to take a firm hand. We have contributed sufficient to demand that kind of return.”

Mr Oxley, senior partner at law firm Lee & Priestley, accused ministers of failing to match rhetoric with action on cutting red tape.

He said: “The Government has to free the shackles of some of the bureaucracy that binds companies so that business leaders can concentrate on using their creative talents to the best of their abilities rather than having to constantly fill in forms or worry about a piece of legislation they may be contravening.

“The Government hasn’t responded to previous calls to cut red tape.”

Chuka Umunna, Labour’s shadow business secretary, accused ministers of being “out of touch and ineffective” and said they are losing the confidence of business.

But Martin Jenkins, head of the accountancy firm Deloitte in Yorkshire and the North East, said business must take the lead in the recovery, not Government.

“If you think about what’s changed in recent years with the eastward shift in global demand, the lack of public trust in business, the level of consumer and government debt in this country and other Western economies and the unprecedented level of corporate cash balances that has built up, business has to be part of the solution to address that,” he said.

Mr Jenkins added that simplification of tax would encourage investment and entrepreneurship.

“But that of itself is not enough: we need business to champion investment, nurture new talent and really focus on what is going to be a quite different engine of growth for us to have a sustained recovery,” he said.

“The past 20 years were characterised by high levels of public and consumer spending. What has to characterise the next decade is high levels of business investment and greater levels of exports.”

Lower growth predicted

Growth in 2012 will be lower than last year, according to the overwhelming majority of the 1,277 business leaders surveyed by the Institute of Directors.

Nearly two thirds said there was “a low or zero probability” of the UK emerging from recession this year.

But 52 per cent said they expected growth to be higher than in the first half of 2012, compared with 22 per cent who fear further contraction.

Graeme Leach, of the IoD, said: “If the coalition wants to break this cycle of low economic confidence, then it needs to take some bold steps that will make a real difference to the cost and complexity of doing business in the UK.”