Vince Cable right to temper Chancellor’s enthusiasm

Peter Livingstone

Peter Livingstone

Peter Livingstone, who is Chair of Somerset Institute of Directors, and a Director at Battents Solicitors discusses the current state of the economy, following words of caution from Business Secretary Vince Cable.

Today, Business Secretary Vince Cable has cautioned against an excess of exuberance at the fact that business confidence is on the rise.

Whilst the Chancellor George Osborne has talked of the economy turning a corner, Vince Cable has pointed out that there is still a long way to go and that there still needs to be more investment in business for it to thrive in the long term.

Slapped the Chancellor down

The Business Secretary is right to temper the Chancellor’s enthusiasm and it is not right for Labour to suggest, as they have, that he has ‘slapped the Chancellor down’.

The fact is that whilst business and customer confidence has been one of the missing ingredients so far, and whilst no-one would want to do anything to kill that off, we must not get ahead of ourselves and think that the problems in the economy have all been solved.

Business perspective

From a business perspective, whilst it is good to have more house-building and more good quality homes for the workforce to live in, it is not helpful for the housing market to start racing away again.

The idea that living in an expensive house is somehow better for the economy than living in a less expensive house is a fallacy, as is the notion that a house going up in value – or rather expense – makes its owner better off.

The Government should redouble its efforts to encourage and stimulate the building of affordable homes for working families, without which the country will continue to create each year twice as many households as it does houses.

Infrastructure improvements needed

More, too, needs to be done to improve the country’s infrastructure, particularly road, rail and air travel links.

Here in the South West there are particularly acute needs for, for example, the A303 to be dualled and for its link with the M5 to be improved, and for the railway lines to be electrified south and west of Bristol.

These are crucial projects and the IOD is already on record as saying that the Government should not put all its eggs in the HS2 basket.

LEP under resourced

A third priority for the country is the improvement of regional and local investment.

The old Regional Development Agencies were abolished which brought about a huge and immediate saving.

What has come in their place, however, in the form of Local Enterprise Partnerships is chronically under-resourced and has created a system where the LEPs seem to have precious few resources, precious little money and no real responsibility or accountability.