The Government has been urged to have a “laser-like” focus on growth as a new report warned that short-termism in British business has become a huge “impediment.”
The chairman of the EEF will tell the manufacturers’ organisation’s annual dinner in London that industry wanted to see more Government action on areas including energy, business banking, apprenticeships and infrastructure.
His comments will follow publication of a review commissioned by the Labour party which concluded that the pressure to deliver quick results has become an entrenched feature of UK business.
Leading businessman Sir George Cox made a series of recommendations, including changes to executive pay arrangements.
The Governance Code should be extended should be extended to ensure sufficient long-term incentives are incorporated into the pay of executives and non-executive directors, he suggested.
The Code could call for at least 30% of executive directors’ pay to be deferred and based on long-term results, said Sir George.
EEF chairman Martin Temple will tell tonight’s dinner that ministers should use the forthcoming spending review to send a clear, long-term signal about their priorities.
“All areas on public spending must be subject to the same level of scrutiny on what they deliver for stronger, better balanced growth.
“Just as there can be no free passes or sacred cows for any area of public spending or any government department, the money to fund growth must be substantial.
“We can’t keep looking at the same departments again and again to find the savings from their budgets.
“On skills we have a once in a generation opportunity to strip out the bureaucracy that has plagued business for decades, and create a proper market in training where funding flows through the customer - and that’s the company making the investment.”
Sir George said the economy will only grow if short-termism is overcome, adding: “Economic growth needs to become an objective, with strategies to achieve it, not a forecast on which all other decisions are dependent.”
Shadow Chancellor Ed Balls, who will address the EEF’s annual conference in London today ahead of the dinner, said: “Sir George’s report sets out a clear plan for creating that more long-termist economy including radical reforms to executive pay, tougher rules on takeovers and encouraging longer-term shareholding and we will now study his detailed proposals as part of our policy review.
“It’s vital that we take action to kick-start our flatlining economy, but now is also exactly the right time to make the long-term changes we need to make our economy stronger, more balanced and better able to attract new investment and create skilled jobs for the future.”