Report warns against short-termism

The Government will be 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 wants 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 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 the dinner that ministers should use the forthcoming spending review to send a clear, long-term signal about their priorities.

He will say: "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."