Business attacks Government: UK 'faces long climb up economic league' - Camdessus urges greater co-operation

SHARP criticism of the Government and the Prime Minister came from business leaders yesterday.

Sir Alistair Grant, chairman and chief executive of Argyll Group, said the least business can expect is a government that is competent to do its job.

He added that the overriding impression at present was that the Government had too many concerns to manage and was in the grip of events.

'Only when government is properly organised will the business community be able to fully relate to and support the ministers running our country.'

He accused the Government of operating a 19th-century system to tackle 21st-century problems. In a thinly veiled attack on the Treasury's performance, he said: 'I feel that the 'cheery old card' should have retired himself, at least temporarily, when the battle plan was changed last October. Instead we find him suggesting that in some curious way the new exchange rate and the lower interest rates were the results of policy]'

Peter Morgan, director-general of the Institute of Directors, accused successive governments of debauching the currency and depriving the country of sound money.

Speaking at the IOD convention in London, he said: 'If the blinding revelation that to the extent we have a recovery today, it is more or less over the dead bodies of Bank and Treasury officials.'

Mr Morgan called for the Bank of England to be privatised to keep economic management at arm's length from politics.

He also said that the UK faced a big task in fighting back from the bottom of the third league of industrial nations.

He said: 'Team UK can win. Italy is at the bottom of the second division and France is at the top. We must aim to knock Italy out of the second division and then compete with France for promotion to the first.'

Mr Morgan also issued a plea for small firms because they are the main vehicles for bringing enterprise and invention into the economy. They can, in total, create more jobs than large firms, he said.

His plea for small businesses was echoed by Richard Branson, the founder of Virgin Group. Mr Branson said that directors should be encouraged to break up large firms into smaller units and to businesses from scratch rather than through acquisition.