CBI chief blasts Government for 'slamming the brakes on spending' in blistering exit speech
The country's most powerful industry leader yesterday launched an extraordinary attack on the Coalition's business policies.
Sir Richard Lambert used his last major speech as the head of the CBI to make a withering assault, warning: 'It is not enough just to slam on the spending brakes.'
He attacked a failure to prioritise the private sector, pointing out that businesses are vital to Britain's recovery and could create 1.5million new jobs over the next five years.
Blistering attack: Sir Richard Lambert said politics 'appeared to have trumped economics on too many occasions over the past eight months' as he made his final speech as head of the CBI
He accused the Coalition of making policies purely for political reasons, and which are 'careless of the damage that they might do to business and to job creation'.
Sir Richard, who steps down on Friday after more than four years as director-general, hailed the 'ruthless' decision to cut the deficit, but said the Government 'needs to test every policy initiative against a single question: Will this help or hinder the process of investment and job creation in the private sector? It is by no means firing on all cylinders in this important respect'.
Toff Cameron 'risks being out of touch without his Essex boy spin chief, says David Davis
His remarks came ahead of the release of official figures today which were expected to show a major slump in Britain's economic growth.
Growth in GDP was expected to have dropped to 0.5 per cent during the final three months of last year, with fears it could even be negative.
Sir Richard's list of criticisms of the Coalition included:
Failure to 'articulate in big-picture terms its vision of what the UK economy might become under its stewardship';
Failure to publish a growth white paper last autumn because 'there simply weren't enough good ideas around to justify such a publication';
Gathering only 'big multi-nationals around the Cabinet Office table' when discussing employment, despite the fact that small businesses are the 'main source of new jobs'.
Being too critical of bosses' pay, saying that 'a less gung-ho approach to executive compensation' is needed.
He also said that a 'hard look' needed to be taken at the Department for Business and its role in promoting growth. It should be 'less of a talking shop, more of an action-oriented growth champion', Sir Richard said.
He said: 'We need a Department that is seriously knowledgeable about – and very closely engaged in – everyday business needs.'
Shadow Chancellor Ed Balls seized upon the comments adding: 'It's time ministers heeded these warnings from respected figures before it's too late'
He went on to highlight several policies – including the immigration cap and the decision to axe rules allowing bosses to retire staff on their 65th birthday – as just some of many bad examples of 'politics appearing to have trumped economics'.
The Government is 'so excited about announcing new policies that it ignores valuable schemes which already exist', he added.
The Deputy Prime Minister aims to hit back at the grim predicted GDP figures by announcing today that British manufacturing is at a 16-year high.
Hosting a summit with Business Secretary Vince Cable, Nick Clegg will challenge claims that 'Britain does not make anything any more' by pointing out it is still the world's sixth biggest manufacturer. Manufacturing generates £140 billion a year and accounts for 55 per cent of total UK exports.
Yesterday the opposition seized on Sir Richard's remarks as vindication of their criticism of the Coalition's business policy.
Shadow Chancellor Ed Balls said: 'These are damning criticisms from such a respected figure in the business world.
'The Conservative-led Government has no plan for growth and has taken decisions for political reasons regardless of the consequences for job creation and business.
'He is also right to warn that cuts which go so far that they kill demand would actually make matters worse.'
Len McCluskey, general secretary of Unite, Britain's biggest union, said Sir Richard's comments were 'a major wake-up call for David Cameron and Chancellor George Osborne'.
A Department for Business spokesman said yesterday: 'More needs to be done to promote growth. That's why all the Government's efforts are focused on a package of measures to promote growth to be set out at the Budget.
'This includes improving planning, competition policy, reducing the burden of red tape and boosting exports.'
CBI chief Richard Lambert blasts Government spending cuts in exit speech