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CBI: New agenda for business and government

CBI Director-General Carolyn Fairbairn has set out the business priorities to successfully deliver prosperity across the UK, in the Daily Telegraph.

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As our glorious Indian summer draws to a close and autumn approaches, we urgently need a plan for our economy. If we are indeed heading for a spring start to the UK’s journey out of the EU, there’s no time to lose. And the Conservative Party Conference in Birmingham next week is a very good place for the new government to begin to set it out.

The plan does not need all the answers, but it needs some. We should not expect to see the full shape of the UK’s negotiating position – the choices on ‘hard’ versus ‘soft’ Brexit are part of a Rubik’s cube over which the UK has only one-sided control. Let’s be realistic about this. But we should hope for answers on three things. First, resounding reassurance that this government is truly pro-enterprise; second, a genuine partnership between government and business; and, third, a domestic plan to build prosperity and confidence.

Taking each of these in turn. First, a pro-business and pro-enterprise government. This is absolutely vital for the success of Brexit. Though the referendum was largely a political event, its consequences will be economic and felt in the reality of people’s lives for years and decades to come. Only if UK business thrives will the outcome be positive for jobs and living standards. Early signs are that firms’ priorities for the new EU deal are well understood by several on the new front bench: maximising single market access; securing global talent alongside a skilled domestic workforce; ambitious new trade deals. May this progress continue.

But tone matters too, and here the messages from the new Cabinet are mixed. Firms have heard a desire to support business confidence from the Chancellor. However the Secretary of State for International trade has been scathing of UK business ambition and the Prime Minister herself has been fair but challenging on issues of corporate governance.

What is sadly true is that some firms have done themselves no favours. Reputation has been harmed by high profile issues that include pay, tax, and the treatment of workers. Change is needed in all these areas. I and the CBI are in no doubt of this and are consulting on progressive solutions with firms across the UK. This is an opportunity for business to take a lead and we are seizing it.

But the Prime Minster has an opportunity too: to share the ambition that I and many others hold to improve trust in business, rather than damage it further. This means keeping the rhetoric fair. It means recognising that the vast majority of businesses are good citizens and that this a problem of the few not the many. And it means avoiding unfounded generalisations like ‘big business bad, small business good’. Both are vital to our prosperity, partners in supply chains that build vibrant local economies. It would be very welcome to hear the Prime Minister say so.

Second, we need a genuine partnership at eye-level between government and business. Engagement today is fragmented and piecemeal. What is urgently needed is a proper architecture and roadmap for business consultation, sector by sector, region by region, for big business and small.  And it should be set up to last years, not months. 

This will bring two advantages. It will give firms confidence they are being heard at a time when unavoidable negotiating gamesmanship with the EU may make open communication difficult. Even more important, it will provide the evidence base - from the shop, factory and office floor – to prevent bad decisions and maximise good ones.

Business needs to do the same – organise itself well, avoid thousands of separate wish-lists, be easy to deal with. This is working well in some sectors – for example, financial services – but there is more to do. As a voice for the whole economy, speaking for firms from all sectors, the CBI can help prevent fragmentation and ensure clear airwaves from firms to government and vice versa.

One of the most pressing issues is the timing for triggering Article 50, a crucial and difficult question. Government will have to weigh competing factors – in particular the stormy environment of 2017 elections in four EU countries versus the benefits of ‘getting on with it’ – but a decision should only be taken once the likely impact on business investment is fully understood. The risk of unintended consequences is very real.

Third, we need a domestic plan to build confidence and prosperity.  At its heart should be a focus on unlocking growth and productivity across the regions and nations of the UK. London is an extraordinary world-class city and needs to be kept that way, but the differences in living standards across the country must be addressed.  We heard this message loud and clear in the stark divisions of the referendum result.

To this challenge, the UK’s companies hold many of the answers. Working in partnership with government at a local and national level they can help build a skills system for years to come, ensure Britain is a leading location for cutting-edge innovation and entrepreneurship, help renew our nation’s infrastructure. Building a new runway in the South East, for example, is a key decision for the long-term future of our economy and country. If the UK doesn’t act now, we could lose out on over £30 billion in trade by 2030 with the BRIC economies alone, so let’s simply get on with it.

These are the drivers of increasing productivity, rising living standards and growing opportunities for our children. The energy of the referendum result gives us a golden opportunity to address them.  

It’s time for a fresh start in the relationship between government, business and the communities of the UK. ‘Open for business’ must become more than a slogan, it must be a positive plan from a pro-enterprise government. And there’s no better place and time to launch it than in Birmingham next week. 

This article originally appeared in The Telegraph

 

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