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With the budget on the horizon, Labour has attempted to position itself as the party for business, promising to be active in support of the modernisation of the economy if returned to government.
One of the party’s rising stars, shadow business secretary Chuka Umunna, branded Prime Minister David Cameron and Chancellor George Osborne “roadblocks to reform” whose insistence that the state must “stand aside and leave it to the market” is harming UK firms.
Rejecting calls from Conservative backbenchers for the abolition of the Department for Business, Innovation and Skills, Umunna promised to restore the ministry’s position in Whitehall, giving it “real clout” of the kind it enjoyed when Lord Mandelson was the effective deputy prime minister under Gordon Brown.
Umunna told a Confederation of British Industry lunch that Britain needed a “new economy” to compete effectively with emerging powers in the globalised world. He cited the case of Brazil, whose GDP overtook Britain’s at the end of last year and where per capita income is predicted to overhaul the UK’s by 2030. And he called for “a national mission where productive business and active government work together in partnership”.
Umunna said: “We need a new set of policies to build a better, more responsible and productive capitalism, fit for our times and for the future – a new economy to deliver the fairer outcomes at home and greater competitiveness abroad, for the British people and British business. As a nation, we have a job of work to do to modernise our economy. The market alone won’t get us there; government alone can’t do so either. But it must be a national mission where productive business and active government work together in partnership.”
Umunna said that Conservatives were “outside the international mainstream” by failing to support those in business arguing for “a more productive capitalism”. He said: “Proponents of business as usual – roadblocks to reform, reluctant to accept the need to change and modernise, wedded to the old orthodoxies – argue that the best government can do is to leave it to the market.
“This is the overwhelming view of the Conservative party. But this attitude has held British business back from reaching its full potential for too long.”
Umunna rejected a recent call by Tory MP David Ruffley for the abolition of the department for business, saying: “When Peter Mandelson was in charge, the department had real clout across government. I intend to follow Peter’s example. And I should say that, as a pro-business party, we would not dream of abolishing the business department.”
Umunna said that he had been “struck by how business leader after business leader has told me they want to see an active government working in partnership with business in different sectors to step in and fill the gaps where there is market failure”.
He added: “Leaders of British industry – like the chairman of Babcock – are not calling for the abolition of the business department as some now argue, but for a strong business department to adopt an industrial strategy.”