Where’s the growth strategy?

Inside track by Mark Wingett Apparently we are not working hard enough to revive the economy and drag the country out of recession. That’s the stance of foreign secretary William Hague, who is reported to have said at the weekend that the Government’s business critics should stop “complaining” and argued that there was only one growth strategy: “work hard”. Hague was responding to criticism – many would argue justified – from business groups over the Government’s failure to be bolder in the legislative agenda presented in last week’s Queen’s Speech. The announcements in said speech were billed as having a strong business flavour, including measures aimed as cutting red tape and strengthening competition. However, most of these key phrases had been touched on before over the last four years, without the majority of businesses seeing any decisive action taken on either. As Mark Littlewood, director general of the Institute of Economic Affairs, said: “It is time the Government stopped paying lip service to growth and did more about it.” Indeed, it comes to something when the Government is attacked by the supermarkets, a sector many of the hospitality industry see as ring fenced from Government intervention. However, Justin King, the chief executive of Sainsbury’s, was one of the first to attack the Government’s lack of coherent measures to boost economic growth, which he said should have included “drastic deregulation”. It is a theme that the Sunday Times picked up in a message to the Prime Minister on the front of its business section this weekend and one that dominated M&C Report’s latest Directors’ Club meeting with Minister for Tourism & Heritage John Penrose last Tuesday. The Sunday Times’ call to arms echoed the thoughts of the 25 sectors leaders from the eating and drinking-out sector that faced Penrose – the Government needs to take decisive steps to improve business confidence and help businesses build on there strengths to shake the country “out of torpor”. Arguments brought forward to Penrose at latest Directors’ Club, on key topics such as the duty-escalator, VAT and employment in the hospitality sector where as always put forward articulately and passionately. And while Penrose deserves credit for coming into what more than one operator described as a “bear pit”, sadly the majority of his counter argument, the gist of which was that the Government had no money, put into serious question the Government’s commitment to generating growth and his colleague Mr Hague’s assertion that we should “work harder”. But work towards what? The sector is working overtime to, in some cases, stay afloat. What it needs, and was the key point put forward to Penrose, was a clear strategy from the Government that its hard work will make a difference and is part of an overall strategy that will eventually pull the country towards a recovery. What they wanted most of all was the Government to show some leadership rather the muddle that is currently being pedalled out. The hard fact is that if any one of the chief executives, managing directors or finance directors currently working across the sector did not come forward with a clear strategy, they would soon be out of a job. It is thought that later this week the Bank of England will revise down its growth predictions for the economy this year. The long haul out of the slump is not getting any shorter, which makes the Government’s message the more galling. The sector is “busting a gut” to find and deliver growth opportunities. It is long overdue that the Government gave them a strategy/a clear reason to continue to do so.