Breaking News Today

Britain can’t waste post-pandemic chance to rebuild, CBI chief warns

Published: (Updated: ) in European News by .

Boss of major UK business group urges politicians to avoid repeating mistakes of last financial crisis.

LONDON — Britain’s politicians have a once-in-a-generation chance to keep the country globally competitive, the head of Britain’s biggest business lobby group warned.

Tony Danker, director general of the Confederation of British Industry (CBI), told POLITICO that the economic recovery from COVID-19 means now is “the moment” for radical industrial reform. It comes as the outfit unveils a new report aimed at persuading the government to think big after the pandemic.

The U.K. economy has taken a battering during the pandemic, and is now 8.7 percent smaller than before COVID-19 triggered lockdowns, according to the Office for National Statistics.

Economists have warned that the country is facing a cliff-edge once the furlough scheme, in which the state guarantees a substantial proportion of people’s wages, comes to an end and the true level of unemployment becomes clear. There are also concerns about how the government can repair the public finances after putting the economy on extended life support.

Danker warned Britain had previously thrown away the chance to “build back better” in the wake of the 2008 financial crisis, something that he said cannot be allowed to happen again if the U.K. hopes to remain a global player.

Danker’s time at the U.K.’s Treasury in 2008-2010 showed him that “Britain is normally bad” at setting bold economic and industrial strategies. “We were stuck just like now, at the heart of a crisis,” he said. “What everyone was talking about at the time was how we are going to learn the lessons and build a better economic model.”

In a bid to avoid a repeat of those policy mistakes, the CBI is pitching its new roadmap, arguing that the government can rejuvenate research, commerce and productivity by backing clusters of specialized and highly productive companies around the U.K. The body is also suggesting it’s best placed to lead the charge on these, pointing to its work to help boost the renewable energy industry in the North East of England.

READ:  Boris Johnson’s hair shows he’s too posh to fail

Post Brexit, Danker argues there is now a “strong political consensus about the big bets” the U.K. needs to make in order to stay competitive. “We genuinely have a window here,” he said. “This is the first window we’ve had in a while, and the country and the times that we live in demand that level of consensus.”

He added: “We’re early in a parliament. We’re all approaching [the U.N. climate summit] COP. We’re trying to put an end to protectionism, and I think the stars are aligned right now; we’re all talking about economic recovery: this is the moment.” 

‘Leveling up’

Boris Johnson has promised voters who abandoned the opposition Labour Party and swept him to power in 2019 that he will focus on “leveling up” their communities, but the British government has yet to translate that slogan into major policy changes.

Danker said leveling up will require not just improvements to infrastructure, but considerable investment in skills and training in order to secure well-paid, high-value jobs across the U.K. “If we don’t find a way to make that true in every part of the country, you can have better trains and better broadband but it’s not really a solution,” he warned.

The report also stresses the importance of Britain’s post-Brexit trade policy in its economic recovery. It calls on ministers to adequately fund the four new ‘Trade and Investment Hubs’ it has promised across the U.K. in a bid to break the longstanding dominance of the South East of England in Britain’s economic life. The CBI wants these new centers to be properly joined up with existing regional and national export plans, and it’s calling for a “comprehensive trade upskilling programme for business” drawn up by government, industry and academia.

READ:  How Bulgaria became the EU’s mafia state

It calls for a new “Trade in Services Commission” to overcome market access barriers “in some of the major services growth markets” as part of a long-term U.K. trade strategy. 

The key bet, though, is that Johnson can make good on his leveling up promises by backing the CBI’s regional business clusters. “I’m not saying that every region should just have one strength, but if we get good at scaling up where a region has a particular strength, then that’s a recipe for making a success of leveling up,” Danker said.

Source: POLITICO https://www.politico.eu/article/uk-economy-post-pandemic-chance-rebuild-cbi-tony-danker/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

Shares
Share This
Finance Advice 2021