The Confederation of British Industry (CBI) recently responded to the latest UK economic assessment report published by the International Monetary Fund (IMF).
In a speech to business leaders at the Association for Consultancy and Engineering (ACE) annual conference, CBI director-general John Cridland argued the UK must end funding and political delays over major infrastructure projects or jobs and long-term growth will suffer.
He said: “The IMF’s assessment for the outlook of the UK economy chimes with our own view that a modest recovery looks to be taking shape. As things stand, the Government is right to resist calls to change course on debt reduction because this would risk a market backlash, forcing up lending rates and undermining the fragile growth that we have.
“But there is still room to manoeuvre in order to boost growth and jobs within the current strategy by bringing forward capital investment. The Government must now dramatically step up the pace of action in these areas.
“There is also scope to provide greater clarity in both monetary and financial policy to improve financial market confidence and lending conditions.
“It is important that RBS and Lloyds Banking Group are returned to the private sector as swiftly and as smoothly as possible, so that they can play their full part in supporting the recovery. The best way to do this is to allow them to continue to restructure and operate on commercial terms, free from government interference.”
Mr Cridland went on to say that businesses feel that investment for major transport and energy is “on pause” – despite some progress, government, business and investors were “caught in a frustrating cycle of waiting on each other”.
He challenged all three major political parties to show real leadership and deliver the infrastructure the UK needs over the next few decades: securing a long-term investment plan for road, rail and aviation capacity, passing the Energy Bill urgently and getting the proposed nuclear power station at Hinkley Point in Somerset up and running.
“With the Spending Review looming on the horizon we’ll soon know broadly what capital investment will be available,” Mr Cridland continued. “Yes, the coalition has admitted it was wrong to cut capital spending so deeply and it’s doing the right thing now by shifting current expenditure and underspends to long-term investment. The extra £3bn per year from 2015 will go some way to redress the balance.
“But money isn’t the only prize in this race; whichever party or parties are in charge following the next election, the challenges will still be the same. We cannot afford for delivery to be eroded any further.
“We ought to be having more grown-up conversations about infrastructure – debate is vital to securing business, political and public consensus. Ordinary citizens up and down the country can’t be made to feel that their legitimate concerns are being sidelined.
“Government and business should do more to have frank conversations with the people most affected by infrastructure development.
“While there will always be a very small but very vocal minority, opposed to development in any form, we need to do more to make the silent majority heard – the working families who need better transport links, the communities buoyed by investment in faster broadband, the businesses looking to innovate and crack new supply chains in energy.
“And yet we’ve already proved it can be done – the Olympics provide an excellent template of how to get the balance right. The many benefits of infrastructure need to be given a proper airing in an informed debate.
“If we can start the debate between politicians, business and the public, we will find a way through. But time is not on our side. So we need to be upfront about what can be delivered within this Parliament and what foundations we need to lay for the projects of the future.”