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CBI Director shares insight on the party conferences with MIA CEO

08 Oct 2018

Carolyn Fairbairn, Director-General of CBI, “After a fortnight of two lively party conferences, I thought it was a good time to share some reflections. I was at both conferences – they were very different but grappling with similar questions of unity, policy, leadership and, of course, Brexit.

Both parties had messages for business. Despite the sound and fury, both expressed an intent to work with business and the CBI to create a stronger and fairer economy. From tackling inequality to managing the lightning pace of technology, they recognised that government and business must collaborate to tackle the UK’s deep-seated structural challenges.

But what is also clear is that they have radically different approaches in mind.

Conservatives in Birmingham – ‘we back business’, holding line on Brexit.

The Prime Minister used her speech at the Conservative conference to express unambiguous support for business – welcome after a tough couple of years, and testament to the sustained engagement the CBI has had with Downing Street since last year’s general election.

Read the CBI’s response to the Prime Minister’s speech

We will continue to support Number 10 to build a new architecture for business engagement, working with the PM’s new business envoy, William Vereker. I have heard from many of you that ‘docking into’ government has been far too difficult – we are on the road to changing this.

On Monday, the Chancellor gave one of the strongest pro-enterprise speeches we have heard in recent years. Describing business “as the cornerstone of a successful economy”, Philip Hammond also responded to the CBI’s calls to reform the Apprenticeship Levy. Again, you have been clear about how badly it has been working both for your business and apprentices.

I’m in no doubt this important step forward would not have happened been without the numerous meetings the CBI has had with the Chancellor, the Education Secretary, Damian Hinds, Business Secretary Greg Clark and civil servants. We outlined clearly how the Levy must be reformed so it is more flexible, less bureaucratic and focussed on quality.

Read the CBI’s response to the Chancellor’s speech

However, not all the policy news was good. The Prime Minister’s announcements on immigration were deeply disappointing. Politics seemed to take over, with a dismissal of the importance to low-skilled workers to our economy.

The UK needs all skill levels. A one-size-fits-all system for the world ignores the need for migration to be on the table for trade deals and risks binding small firms in red tape. The CBI will continue to reiterate these points, both publicly and privately, in advance of the government’s immigration white paper due later this year.

Labour in Liverpool – inspiring vision, flawed policy

Labour took a different approach. We share many of the goals outlined by Labour, including tackling climate change, engaging employees and increasing childcare provision. But too often Labour’s solutions are through top-down diktat, undermining investment and business confidence, and as a result harming those they are trying to help.

Proposals for a radical new share ownership and covert tax scheme, unveiled by Shadow Chancellor John McDonnell on Monday, fell into this trap. We fully share Labour’s desire to increase share ownership in the UK, and more than 3 in 4 FTSE 350 firms already have schemes. But under Labour’s mandated approach, with its confiscation of 10% of company share capital, the outcome for British workers, savers and pensioners would be a drop in living standards.

As I said to the Shadow Chancellor in person when he joined me at the CBI’s fringe meeting in Liverpool, Labour must meet business halfway to develop policies that will drive productivity and investment. If they don’t, they risk cracking the foundations of this country’s prosperity.

Read the full CBI response to John McDonnell’s speech

In response, we are increasing the frequency of our meetings with the Labour front bench. We meet Jeremy Corbyn and John McDonnell quarterly, and are fixing regular sessions with Rebecca Long-Bailey, Shadow Business Secretary. Our message is clear. We share your goals to make Britain fairer and to strengthen engagement in business and the economy. But the answers lie in a partnership with business, not a battle. If business confidence drifts away from the UK, so too does investment and jobs. Let’s take your ideas and debate how they can build both prosperity and fairness.

Next chapter of EU negotiations – must unlock transition

With Conservative and Labour party conferences over for another year, all eyes now are on the crucial European Council summit in a fortnight’s time.

Over the coming days, the CBI will continue to use its networks in Westminster, Belfast, and Brussels to stress the importance of securing the Withdrawal Agreement this autumn. Achieving this will unlock the temporary but essential transition period to protect jobs and living standards.

As ever, thank you again for the support and information you give us. It is invaluable. Please do not hesitate to get in touch if you have any questions, reflections or concerns.”

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