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Action to build confidence can keep recession risks at bay, CBI chief to tell north east business leaders.

Measures to shore up business confidence and incentivise future investment are vital this summer to help restore economic momentum and stave off the risk of recession.

This is the message which CBI Director-General Tony Danker yesterday shared with regional business leaders at the organisation’s annual North East dinner.

Tony was joined by Rhodri Talfan Davies, the BBC’s Director of Nations, for an event celebrating the North East’s vibrant cultural sector, recognising the value of business and culture working in partnership as part of the levelling up agenda.

The Dinner came at a time of significant economic concern, and just a week after the CBI’s latest Economic Forecast showed GDP growth slowing markedly in the coming 18 months.

CBI expectations are for 3.7% growth in 2022 and just 1% in 2023, with factors such as soaring inflation, war in Ukraine and supply chain disruption weighing heavily on the nation’s prospects.

Tony will outline a series of actions which Government can take to ease current economic headaches and support North East businesses to achieve their future ambitions.

CBI Director-General Tony Danker yesterday said:

“This is a critical summer for our economy. It all comes down to confidence. Government should be looking at what lifts economic confidence and avoiding anything that loses it.

“Every week now we need to show that we are investing in growth. That government puts growth ahead of politics and businesses invest in opportunities

“It’s business investment that has stopped us hitting recession this year, thanks in large part to the Chancellors superdeduction. Now that investment is uncertain we need to keep policy momentum behind it.

“If we all back growth and investment we will avoid recession. If we don’t, it will come.”

They include:

Build momentum behind business investment ahead of the Autumn Budget:  

1. Make a full commitment to a permanent successor to super-deduction.
2. Cut approval times for new offshore wind farms from four years to one year.

Boost confidence in the economy:

1. Call for immediate talks to finally resolve the Northern Ireland Protocol impasse and get Brexit done – resist unilateral action with both sides getting on with the job of finding a negotiated outcome.
2. Announce a permanent replacement to the Recovery Loan Scheme to support cashflow.

Take immediate steps to alleviate labour and skills shortages:  

1. Get real on industry concerns over labour shortages – get going on a new shortage occupations list and add sectors with obvious shortages, like aviation, until that review can be completed.
2. Add immediate flexibility to the apprenticeship levy for one year allowing all employers in the country to use their levy funds to tackle labour shortages.

CBI North East Director Sarah Glendinning yesterday said:

“Despite the headwinds facing the UK economy, the North East remains a region of passion, creativity and industry, with big ambitions for the future.

“We are delighted to have Tony outline the CBI’s strategy for economic growth, and it is fitting to have Rhodri join us too. The BBC has already recognised the North East’s abundant potential, and its recent investment in the region – money which has triggered supporting funds from the public sector – will boost TV production and talent development and support the region’s vibrant creative sector.”

CBI North East Regional Chair Lee Perkins yesterday said:

“Culture is a core component of levelling up; it is key to our regional identity and supports economic growth. 

“The North East has been successful at driving improvement over many years by keeping arts and culture close to the heart of regeneration, with many regional exemplars of the public and private sector connecting and working together.  

“The BBC’s ambition to deepen connections in communities around the UK has been backed by its £25million commitment to develop the screen industry in this region. This has enabled funding commitments from all 12 North East and Tees Valley local authorities which will be transformational for the creative sector.  

“We know from colleagues at Invest Newcastle there is already an uptick in enquiries and private sector investments being made off the back of this. This is just the type of investment which can unite public and private sectors in the delivery of levelling up ambitions.”

BBC Director of Nations Rhodri Talfan Davies yesterday said:

“I’m delighted the BBC’s investment plan for the North East is off to a flyer. It’s our biggest investment in the region for decades, creating new jobs and opportunities in a creative sector that continues to grow quickly across the UK. More than that, it’s a fantastic cultural opportunity to put the region firmly on the national stage where it belongs.”