Leading NRI industrialist and peer Lord Swraj Paul today called on the UK government to support enterprise to maintain the upturn in the economy.
In a speech in the House of Lords, Lord Paul praised a "heartening" recovery in the economy but warned that the "growth will continue to struggle".
"As someone who is involved with the manufacturing industry, I am keenly aware of the fragility of this current upturn. In the automotive sector, for example, we have seen recent international success for the UK plants of Jaguar Land Rover and Nissan; yet for most other UK car plants, market conditions remain challenging," said the chairman of the Caparo Group of industries.
He was addressing a discussion in the Lower House of Parliament here called to "ask Her Majesty's government what direct measures they are taking to promote enterprise and the international competitiveness of British business".
Lord Paul went on to highlight the lack of skilled workforce in the manufacturing sector.
"Even for those that can sell their products in this sector, skilled engineers are hard to find and working capital to fund growth remains difficult to secure... Most of these businesses have been unable or unwilling to risk investing in new productive capacity in the last few years.
"They are now feeling more confident to invest, but how are they going to find the capital and skilled labour to allow them to do this?"
Turning to the financial sector, Lord Paul warned of a continuing shrinking of loans.
"I welcome the initiatives of the government in setting up the British Business Bank, and wish the recently appointed chairman every success in investing the 1.25 billion pounds that the government has set aside. But this may be too little, too late. Germany's KfW, upon which I believe the British Business Bank is based, invested over 17 billion euros in Germany's Mittelstand companies in the first nine months of 2013 alone," he said.
As a solution, he stressed on the need for a true partnership between the government, academia and manufacturers.
"If we are to compete in international markets, the government and financial sector need to work together now to provide easily accessible funding solutions to support investment in our economy. Tax incentives for lease finance providers, coupled with enhanced investment allowances for manufacturers, could be considered," he said.
Lord Paul cautioned that uncertainty around the proposed EU vote in 2017 and the upcoming Scottish referendum are adding to a climate of uncertainty.
"Any investor in UK commerce, whether domestic or from overseas, wants certainty on what it is committing to, and these unresolved issues hinder and frustrate even those that do have the money and the labour. I urge the government to start making decisions now, before it is too late," he said.
