The panel was chaired by Elizabeth Rigby, Deputy Political Editor of the Financial Times and included Sam Gyimah, PPS to the Prime Minister and MP for East Surrey. Sajid Javid, Economic Secretary to the Treasury and MP for Bromsgrove was also joined by the Director General of the CBI, John Cridland, and Simon Collins, Senior Partner, KPMG
John Cridland, Director General of the CBI, opened the discussion by saying we need to rebalance the economy. He said it has been a long time since we have had a positive trade balance.
He said British business people need to get on planes to far flung places where growing middle classes will invest in British branded products.
He called smaller companies the “bedrock of the UK economy” but said that government always focussed on the small but not necessarily enough on the medium sized businesses.
Cridland said the biggest single thing government can do is invest in infrastructure like housing, ports, roads and airports, adding that the government may have cut back on capital expenditure too much in 2010.
He called for a 21st century industrial strategy and getting behind winning technologies and used the example of Graphene; a new crystalline carbon product which was invented in a British university. He said there were new inventions in our universities “just waiting” to be given a helping hand.
The standard of our education system was also crucial to growth, he added. He said he had not always felt the government’s education policy was connected to its economic growth strategy, but said it should be.
Simon Collins, Senior Partner at KPMG pointed out the confidence in British business was growing but remained very fragile. However, he said capital expenditure, mergers and acquisitions, as well as societal confidence in business was low, and this was due to the financial services sector and the horsemeat scandal.
There was finance available in the private sector to build and finance infrastructure projects, he insisted.
He concluded by saying partnerships in business are really important, and that only with mentoring between large and small businesses economic growth be achieved. He cited Diageo as an example, attending some of the Government’s overseas trade missions and taking some of its smaller suppliers too.
Sam Gyimah MP explained that the Government needed to reduce the deficit and make the necessary cuts to spending, as when it came into office it had an annual structural deficit which was the same as Greece.
Supply chain is for British businesses was very important to economic growth, he said, and believed the distinction between large and small companies is often a false one. He added that government cannot ignore the needs of small or large businesses but needed to support both.
He added that the Government needs to be unashamedly pro-business and that it does have a role in building infrastructure projects and delivering a new industrial strategy. He added that nothing could happen without a macroeconomic responsibility, and the Government therefore needed to continue to reduce the deficit.
Sajid Javid, the Economic Secretary to the Treasury, said he was not going to apologise for bringing politics into the debate on the recovery. He said it “clearly requires the right political strategy” and that it was important to recognise the UK as being in a global race.
He felt Ed Miliband thought the UK could succeed without changing, but said this is not the case. He believed most UKIP voters also had a “nostalgic view of Britain”.
There was a perception that the rest of the world “owed us our lunch and dinner” and that we didn’t have to earn it, Javid said.
He said if there was a Conservative majority government after 2015 there would be a referendum on EU membership in 2017. Whatever the outcome of the negotiations, the British people will get a say he insisted.
Question and Answer session
Responding to a question from the audience, Cridland said “business loves certainty” with regard to the EU debate. He said the CBI represented 240,000 businesses and it had surveyed members on the question of EU membership; 77% of businesses wanted to stay in the EU and 78% of small businesses want to stay in.
Gyimah added that even German Chancellor Merkel agrees that the EU needs reform.
A former director of the Royal Statistical Society asked about Big Data, and Gyimah said the UK is a world leader in making data available, and that selling data should be part of the UK’s economic recovery given that it is an information society.
A delegate asked if there was a difficulty in the Business Secretary being a Liberal Democrat. Cridland said that the CBI had been able to get itself heard in both the Treasury and BIS and that dialogue had been good.
It was important to have a single voice representing business in Cabinet, he said, and saw no problem with the current Business Secretary being a Lib Dem. He also said it was important that the role was not watered down.
Javid added that he had been a PPS in BIS and the Treasury before becoming a Treasury minister, and that his experience had been that the two departments worked well together.
A delegate asked about what government is doing to reduce regulation for businesses.
Javid said the Red Tape Challenge was not a gimmick and really was working. The ‘one in two out’ rule was making a real difference to removing regulations and that officials discuss this with him every day. It is the first time it has ever been done as a concept, he added.
An audience member asked about the corporate social responsibility (CSR) of business, and Cridland said businesses needed to improve their consumer offer.
He said CSR was not good if companies did not have their energy, tax and banking in order. He also called on companies to set out a story to shareholders and stakeholders.
Javid said he has seen emerging markets first hand in his former life as a banker. He said that Embassies now encourage business, but did not always do this. German and Dutch embassies were always business focussed but now it is great the UK embassies are focussed on trade as well as diplomacy.
Gyimah said that the Prime Minister recognised the importance of emerging economies and that he has visited every G20 country with exception of Argentina and trade missions were a big part of his overseas travel programmes.