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

A plan to foster growth and lock in the recovery has been published by the Business Secretary Vince Cable when he appeared 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 said: “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.