CBI keeps eyes on Growth and Well Being, Urging Government to do the Same

Speaking earlier this week at the inaugural CBI Midlands dinner, held at the Hilton Metropole, Mike Wright, Chairman, CBI West Midlands introducing John Cridland, Director General, CBI, highlighted the importance of EU export markets to the Midlands given our prowess in advanced manufacturing and engineering commenting on how an EU referendum might impact on the region’s natural alliances to the EU and observing that Birmingham Airport had more daily connections to EU cities than any other airport in the UK. “With the region going from strength to strength I am keen to make sure that any actions taken maintain our competitiveness,” he added.

John, speaking about growth stated that whilst the outlook was set fair, “the best economic opportunity since the mid ‘90s”, it was perhaps the “most difficult politics since the mid ‘90s,” he added. “The good news was that most entrepreneurs would rather have the opportunity to grow their business and navigate the politics.”

He like many other commentators felt confident that 2014 would see 3% GDP growth and the CBI anticipated 2.5% for next year, 2015. There was a downside risk in the Eurozone with a deflationary German economy, with upheaval in Russia and neighbouring Ukraine having an impact on the UK. “The EU still accounts for 40% of UK exports – Germany needs to reflate, France needs to (finally) drive through structural reform and Draghi at the European Central Bank need to think about some QE for the Eurozone.” Whilst observing that the majority of CBI members would like to be in a reformed EU, they did not “want to creep towards the exit door because of an accident in Madrid.” The UK needed to remain pragmatic, not dogmatic – by setting the bar so high in any referendum that we risk predetermining the outcome.

John, like Frances O’Grady in the TUC, and many business people in the room, was concerned about the impact on business of the retiring generation from the ‘50s, ‘60s and ‘70s, which if not replaced posed a big skills mismatch because however many apprentices were committed these were jobs even the best and most willing 19 year olds could simply not take on overnight. There was a need to keep the STEM focus, but also to focus on the craft and technical skills required and to learn from the vocational experience of Germany.

There was also a real concern in making the connections facilitating skills progression to ensure Level 2 skills connected through well recognised pathways to Levels 4 and 5. There was a real worry about Well Being and Wellness in society with one third of people on National Minimum Wage (NMW) in 1999 remaining on NMW today. “It is perhaps more important to cut national insurance contributions for employees rather than employees at this point in time, to make childcare more available to working families,” he said.

On English devolution John Cridland saw some real opportunities stating, “It is always important to look at what is trying to be achieved.” Manchester seemed to provide a useful blueprint and he was ‘quite a fan’ of Combined Authorities, but four pillars remained of paramount importance in this context – a single business tax; single labour market; single financial regulation; single energy market. He was not advocating a purely regional approach and members did not want to see the LEP agenda torn up, but in all this it was important that Whitehall did not lose focus on the cost benefit analysis in working through proposed reforms, he cautioned.