Belfast Telegraph

Friday 22 August 2014

Labour: Rules rigged against firms

Chuka Umunna says Britain needs 'more firms in more sectors at the leading edge in growing markets'

Rules are "rigged" against firms making the long-term investments in key areas required to ensure the future of the UK economy, shadow business secretary Chuka Umunna is to say.

Mr Umunna will seize on figures showing a 15% real-terms reduction in science funding as evidence of ministers being "out of touch" with the needs of cutting-edge sectors.

Mixed messages on green measures, cuts to capital allowances and a failure to use government procurement power effectively were all contributing to the problem, he will say in a speech in London.

"The challenge is more than restoring the economy to growth in the next year - as vital as that is," he is expected to warn in his first set-piece address since being promoted to the shadow cabinet. "We also need to confront head-on some of the longer-term issues exposed by the global financial crisis if we are to take full advantage of the opportunities of tomorrow.

"What is the Government doing? It has adopted precisely the wrong approach. It is making the wrong choices for our economy in the short term, choking off the recovery. But it is also making the wrong choices for Britain in the long term too."

Britain needs "more firms in more sectors at the leading edge in growing markets", he will suggest, "We need a different approach. We must reshape our economy for new demands and to create new opportunities. We must build a new economy. It is framing the rules of the game so that business which is most productive and most socially valuable is also most profitable."

Figures produced by the House of Commons library showing a 15% real-terms cut in science funding undermined Government claims to be protecting the sector, he will say.

And the controversial "wrecking" of incentives to install solar panels, delays to a Green Investment Bank and the cancellation of carbon capture and storage project were also deterring investment. Uncertainty over the Government's approach to the environment was blamed by experts for a slump in the UK's place in global green investment rankings from third place to 13th, he will say.

Chancellor George Osborne is reported to be finalising plans for a £50 billion private sector-led housing and road-building boom in an attempt to boost the flagging economy. It would encompass power stations, social housing, super-fast broadband and toll-roads as part of a growth strategy to be unveiled alongside the autumn statement on November 29.

A Department for Business spokesman said: "Action is taking place across Government to rebalance the economy and drive growth... But we know there is still more to do and further action can be expected in the coming weeks."

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