– Chuka Umunna, Shadow business secretary
Month after month the country's businesses have been telling the Government it is not doing enough to lift our economy out of this double-dip recession created in Downing Street. But out-of-touch and ineffective ministers refuse to listen, which is why they are losing the confidence of business. The IoD is right to point out that 'low confidence leads to delayed decisions'. In order to have the confidence to invest, business needs far more certainty from Government, but what they have got on policy - from aviation to renewable energy - is indecision.
The government says it has set out a comprehensive strategy which aims to achieve strong, sustainable and balanced growth. In a statement it said:
"Savings to business from cuts in regulation have outweighed the costs of new domestic regulation by more than £850m and reform of labour laws has already led to an increase in the qualification period for unfair dismissal and reform of employment tribunals.
– Graeme Leach, chief economist at the Institute of Directors
Business is battening down the hatches in the expectation that the recession will continue for the rest of the year. That is bad news for the economy at large, because decisions to invest money or take on more staff are being postponed until things look up. Low confidence leads to delayed decisions, and delayed decisions further undermine economic confidence - it's a vicious cycle. At the same time, the Government's reform agenda is pointing in broadly the right direction, but the overwhelming opinion of our members is that they are doing too little, too slowly.
Business leaders say government reforms such as reducing red tape and simplifying employment law have been ineffective. The study of more than 1,200 members of the Institute of Directors also shows serious concern that the recession will continue for the rest of the year.
Among the main findings of the study are:
- The coalition has struggled to reduce tax complexity and business regulation
- Around half polled predicted economic growth to be lower this year
- Two out of three said there was a zero or low probability of the UK emerging from recession in 2012