Put more stress on growth across UK says CBI

Business lobbying organisation the Confederation of British Industry (CBI) said the coalition must maximise private sector growth potential across the UK.

John Cridland, CBI Director-General, said: “It is encouraging that recent GDP figures point to some acceleration in momentum in our economy. However, to rebalance our economy, every part of Britain needs to grow, and it is harder the further we go from London for the private sector to pick up the slack left by a retreating public sector. In some parts of the country the public sector is simply too big and the private sector has much heavy lifting still to do.”

The report says there are opportunities to grow medium-sized businesses, which it says account for a bigger proportion of employment in regions where the rebalancing challenge is greatest, such as the North East, North West and Wales.

The UK climbed out of the double-dip recession between July and September when GDP grew by one per cent in the third quarter, 0.4 per cent higher than City experts had expected. But the bounce-back was largely driven by one-off factors, the Office for National Statistics warned, such as clawed-back activity lost to the extra bank holiday for the Queen’s Diamond Jubilee and a lift from the Olympics.

Mr Cridland said: “The Government can support businesses to grasp growth opportunities by avoiding a ‘one-size-fits-all’ approach to regional growth across the UK. We must concentrate on boosting the private sector wherever pockets of potential are found in towns and cities within regions.

“Where there are advantages to local policymaking, the message from businesses to the Government is ‘be bolder’. Businesses want to see LEPs given statutory status, and incentivised to work together on strategic issues such as transport policy, foreign investment, economic analysis, innovation, and industrial policy. Not doing so risks fragmenting the existing business and economic landscape.”

LEPs were introduced by the Government to replace Regional Development Agencies and are led by businesses and local authorities.