I have been reflecting a lot this week on the role of government, particularly in the wake of our network’s BCC Economic Forecast (which predicts anaemic growth of 0.6% for the UK in 2013) as well as the ‘stay-the-course’ speech delivered by the Prime Minister to an audience on Thursday.
I’ve come to the following three conclusions:
1) We are approaching a tipping point at which the absence of substantial growth in the economy could make deficit reduction not just difficult, but impossible. In many respects, the government is now in the last chance saloon, and needs to knuckle down and deliver on all the previous promises it has made. Hope is not a strategy!
2) Both ministers and civil servants are at fault for the lacklustre delivery of pro-growth measures over the last two and a half years. Ministers pay attention until announcements are made, then lose interest. Civil servants with little experience of delivery then fail to deliver anything of substance – e.g. diggers on the ground for infrastructure projects or a step-change in business lending. Ministers then re-package and re-announce policies, only for the vicious cycle to begin again.
3) Finally, the government has ducked some really hard choices. They face a benefits bill of nearly £200bn, some 30% of what the government spends each year. They have ring-fenced additional areas of spending robotically without considering their efficiency or effectiveness. Yet ministers run scared of reducing perks for the well-off or looking at cost efficiencies in ring-fenced services – even though the money saved could be invested in maintaining roads, building houses or other instant confidence-boosting and job-creating schemes.
So do watch out for our national view via the British Chambers of Commerce ‘s Budget proposals next week which we have input into. I’m not irretrievably gloomy, as I see amazing Chamber businesses doing incredible things all the time. But Westminster and Whitehall must, unequivocally, play their part.
