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More must be done to boost business growth, say MPs

Government plans for encouraging business growth have come under criticism from a committee of MPs.

The Parliamentary Business, Innovation and Skills Committee described Government measures for economic revival as failing to add up to “a comprehensive strategy”.

Its report also claimed there was a “worrying gap” between the Government’s aims for growth and the policies set in place to achieve such expansion.

The Committee identified the role of the banks in supporting business enterprise as vital.

While acknowledging the recently agreed Project Merlin, under which the banks have pledged to increase small business lending by 15 per cent, as a step in the right direction, the Committee said the problem of a lack of lending had not been solved and that the “jury will remain out until it delivers real benefits to industry”.

Adrian Bailey, who chairs the Committee, commented: “The focus on economic growth is welcome but warm words and aspirations are not enough. Unless the Government develops detailed plans to help industry then this positive message will mean little to UK businesses.”

“There is a gap between government rhetoric on economic growth and the Business Department delivery as yet in a number of areas. And perhaps worryingly there’s no measures of delivery – evidence that banks are lending more – both statistical and anecdotal from representatives from the business community.

“Part of the problem is the lack of transparency on lending targets. There has to be evidence that net bank lending is increasing for small businesses. For that to be evident the banks and the government have to publish the figures that demonstrate that.”

Vince Cable, the Business Secretary, pointed to a series of measures that have already been introduced by the Government, such as reducing the regulatory burden for business, investing in apprentices, supporting economic development through the Regional Growth Fund, and reforming the higher education system.

However, the Minister conceded further efforts are required.

He added: “We know there is more to be done. That’s why we are currently working closely with business on the growth review to promote a new economic dynamism by removing barriers and putting the private sector first when it comes to decisions on tax, regulation and spending.”