By Daniel Hunter
The CBI today (Monday) responded to Shadow Chancellor, Ed Balls’ speech to the Labour Party Conference.
On infrastructure and house building, Katja Hall, CBI Chief Policy Director, said: "We would support moves to pull forward capital spending and ramp up house building as these are sure-fire growth boosters.
"Too many long-term infrastructure decisions have been kicked into the political long grass over the years so we welcome the announcement that Labour will sign up to the Armitt review to create an independent commission.”
On wages and jobs, Ms Hall said: "Many companies that can afford to pay a living wage already do so but it’s only with a return to sustained growth that wages will pick up across the board.
"The most successful job creation schemes are those where government and businesses work together at a local level. The Government can't guarantee sustainable jobs at a national level - only companies can do that. The proposed raid on pensions to pay for the jobs guarantee would hit those earning just enough to pay the 40p rate the hardest.”
On HS2, she said: “We've always said that the government must redouble its efforts to sell the benefits of HS2 while keeping a tight lid on costs. But let's not forget why this project matters. HS2 will connect eight of our ten biggest cities, boost regeneration projects across the country for years to come, and will avert a looming capacity crunch on the West Coast mainline.”
On manufacturing, she said: "Mike Wright's review of hi-tech manufacturing gets to the heart of the debate on how we deliver a rebalanced economy and strengthen our supply chains.”
Simon Walker, Director General of the Institute of Directors, said: “Politicians must understand the central role of business in creating wealth, prosperity and employment. I remain concerned by Labour’s proposals to increase the minimum wage in specific sectors, and requiring firms to take on an apprentice for every non-EU worker they hire is a recipe for disaster.
“Having said that, Ed Balls engaged with several issues vital to business leaders in his speech. We share his concerns about the extended Help to Buy scheme, which risks pushing up house prices while doing little to increase the supply of homes. Planning reform is the vital missing element here. There are still too many flaws in the system that hold up home-building. It was also significant that he questioned whether HS2 was the best way to spend £50bn. The IoD agrees with Labour that infrastructure investment is essential, but governments must be clear that they are getting value for money.
“Mr Balls’ commitment to discipline in the public finances is welcome, but will require Labour to clamp down on additional spending pledges. Their rhetoric must be matched by actions. He should be very wary of attempting to achieve deficit reduction through tax rises, which would be deeply damaging to the recovery.”
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