‘THE CLOCK IS TICKING… THE WORLD WON’T WAIT FOR BRITAIN’
On our opening day, Confederation of British Industry director-general Carolyn Fairbairn will respond to a senior cabinet minister's view of post-Brexit Britain. In this comment for Festival publication, the Business Tribune, she offers a flavour of what she'll demand for business.
IN A MATTER of months, the UK is due to leave the European Union.
Prime Minister Theresa May’s commitment to agreeing a status quo transition period by the end of March is vital. This would offer crucial space and time to properly consider Britain’s future relationship with the bloc.
A Brexit ‘cliff edge’ - leaving without any agreement over the future of our £528bn-a-year trading relationship - scenario would be disastrous for business, and we have lobbied hard against it.
To keep jobs and investment in the UK, binding transition terms must be accompanied by progress on a framework for a final deal that delivers barrier-free trade with the EU. So for negotiators, hard work lies ahead.
From our politicians we need unity, clarity and certainty, not a different opinion every day. Politics will need to work on business timescales if we are to get the right result for the country.
And while Brexit remains the top political and economic issue of the day, it is only part of the picture.
Many of the fundamental building blocks of our economy – skills, innovation, infrastructure – are firmly within our control. And the transformational challenges of our age, such as AI, digital and low carbon, amplify the need for urgent action. Ensuring domestic priorities stay high on the government’s agenda remains one of our key missions.
Recent years have proven to be a rollercoaster ride, full of jaw-dropping twists and turns, and everyone is hoping more certainty, predictability and calmer politics lie ahead.
Firms have responded with resilience to these turbulent times but there’s no doubt that uncertainty has taken its toll. While the global economy enjoyed a boom, the UK economy shifted down a gear, with 2017 GDP growth of around 1.5% compared with 2.3% in 2016.
We know from members that investment was postponed and in some cases halted. Order books for manufacturers ended 2017 in good shape, but inflation of 3% has bitten on living standards and affected retailers and other consumer firms.
International investors love doing business in the UK but long for greater clarity.
We should be under no illusion about the scale of heavy lifting needed in 2018. The world around us is transforming. While the UK is consumed with Brexit, China is building a global infrastructure through One Belt One Road and other nations are seizing the opportunities of the fourth industrial revolution.
The world won’t wait for Britain. We must get on, at speed and with great determination, with adapting our economy for the future.
There has been welcome progress on this front. The Industrial Strategy, published at the end of last year, represented a decent first step, and we saw two budgets that were broadly good news for jobs and investment.
The government’s top priority domestically must be the urgent transformation of our skills base. While the clock is ticking on Brexit, it is ticking just at fast in our schools, colleges, universities and workplaces.
The UK is facing a skills emergency. Weaknesses in supporting young people into the labour market have existed for years, but the changing nature of jobs and skill needs have turned the situation critical.
The CBI will be campaigning for reformed careers advice in schools and to ensure every young person gets quality guidance and at least 4 interactions with working life by the age of 16, in every nation of the UK.
We will also champion the effective delivery of higher quality technical education, including T-Levels in England, a reformed apprenticeship levy and real progress on mass adult reskilling.
In parallel, we need more practical action to support innovation in 2018. We will work with businesses and universities to improve the UK’s approach to commercialising the leading-edge research we deliver so successfully.
At the same time, action is needed to ensure companies adopt tried and tested technologies that will move the dial on productivity. You can expect a drumbeat of activity from the CBI on innovation throughout this year.
Meanwhile, planned infrastructure projects must be delivered on time and efficiently throughout the year. Making progress on the big projects is essential – Heathrow, Hinkley and High Speed Rail. We will keep up the pressure, but local delivery aligned to regional economic plans is equally important. The pipeline is there – now the taps need switching on.
One thing is sure – business has a vital role to play in building a bright future for our country. The CBI and the thousands of firms we represent look forward to working in close partnership with a united government to improve lives for everyone in 2018.
This comment builds on a letter to CBI members setting out priorities for 2018.
Images: The CBI/Flickr