Govt ‘lacks comprehensive growth strategy’
A committee of MPs today urged the government to “deliver” on increasing bank lending rates.
The business, innovation and skills committee published a report that said the government was moving in the “right direction”, but argued all other economic growth strategies would be ineffective without increased lending from the banks.
“All that the department does will be of little consequence if business does not get access to sufficient levels of working capital,” the committee concluded.
The government recently announced an agreement with the banks following prolonged negotiations, dubbed Project Merlin, in which banks agreed to increase their lending to £190 billion and curb bonus pay.
The committee said this was a positive move, but demanded further action.
“The agreement between the government and the banks to increase levels of bank lending represents a step in the right direction,” the report concluded.
“The government has been talking a tough game since it came into power and while bank lending rates are a complicated issue to manage, it is time for government to deliver.”
The committee also called on ministers to “put significantly more flesh on the bones” of its growth strategy.
“The government has proposed a number of interventions which have the potential to help promote economic growth, but they do not add up to a comprehensive growth strategy,” the MPs said.
The government is expected to announce its white paper for growth alongside the budget next month.
Committee chair Adrian Bailey said the government’s strategy needed to be all-encompassing.
“The department’s focus on economic growth is welcome but warm words and aspirations are not enough. Unless the department develops detailed plans to help industry then this positive message will mean little to UK businesses,” he said.
The report is an initial assessment of the government’s plans to support growth in the economy.
