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Balance between cuts and growth must be struck for sustainable economic future – Cable

News Release issued by the COI News Distribution Service on 20 July 2010

A plan to foster growth and lock in the recovery will be published today by the Business Secretary Vince Cable when he appears for the first time at the Business, Innovation and Skills Select Committee.

Dr Cable argues in his paper, A Strategy for Sustainable Growth, that striking the right balance between making savings to public spending and promoting sustainable growth is crucial. But in bringing spending under control the Government is determined to create an environment that enables businesses to invest with confidence, thereby putting the recovery onto a sustainable footing and preparing the economy for the future.

The biggest risk to the nation’s economic future is not controlling the deficit effectively, he argues. British business cannot prosper while the risk of a debt crisis hangs over the economy.

The Government has taken decisive action to reduce the deficit through measures in the emergency budget – which has also set out new opportunities for enterprise and sustainable growth.

Business Secretary Vince Cable will say:

“Despite the demands of fiscal austerity we have the tools and capacity to achieve sustainable growth and there is a role for Government to ensure they are used effectively.

“My department, which I have argued should be seen as the “department for growth”, has a key role to play in creating the conditions for businesses, the drivers of our economy, to start out, invest, grow and be profitable which is critical for the recovery.

Our aim at BIS is to reshape the economy so that growth comes from business investment and exports.

We need to rebalance away from an economy built on debt to a one that is greener and more technologically advanced. Our economy also needs to be prepared for the long term challenges ahead – the switch to lower carbon technologies in particular. This should also build on the UK’s historic strength in science and technology.

“It is also vital that we create opportunities that are spread more across the regions, and through those sectors where the UK is strong and can add real value.”

The new plan sets out the three key ways that the department for Business, Innovation and Skills can contribute:

promoting free and open markets. promoting business and innovation through entrepreneurialism and individual engagement in the economy; smarter public and private investment in the economy including creating a highly-skilled workforce and;

To generate growth Ministers are determined to create an enterprise culture where everyone with talent is inspired and able to turn ideas into successful businesses. Getting rid of unnecessary barriers that can stifle growth and creating incentives will be vital.

Dr Cable argues that it is a shared challenge across Government to create a more sophisticated approach that directs public spending at those areas where they can have the greatest impact on growth and takes wider account to ensure that policy protects and supports the business environment. Dr Cable wants to ensure that what the public sector does spend encourages increased private sector investment.

The paper published today will be followed by a number of initiatives from BIS designed to foster and encourage growth and a cross Government White Paper will follow later in the year.

Science and Universities Minister David Willetts will deliver on Wednesday his first major speech on space where he will outline how we will become a world leader in this area, one which is increasingly important to all our lives and one that can be a powerful vehicle for economic growth. BIS and the Treasury will also publish a green paper shortly looking at options to ensure finance is available to a range of businesses of different sizes.

These come ahead of a consultation document on skills to be published by Skills Minister, John Hayes, which will lay out the Government principles for the skills system in the backdrop of reduced spending on skills and seek views on a way forward.

Later this year Government will also publish a White Paper on new approach to sub-national growth. It will detail the Government’s strategy for supporting economic growth across the country. In particular, it will set out the changing approach to regional economic development.

Notes to editors

1. To view A Strategy for Sustainable Growth please go to www.bis.gov.uk/growth

2. BIS' online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Joshua Coe
Phone: 020 7215 5943
Joshua.Coe@bis.gsi.gov.uk