By Daniel Hunter
The Government should dismiss the siren voices calling for a change of course on deficit reduction, CBI President Sir Roger Carr said in a speech to business leaders and senior politicians.
Speaking at the CBI’s Annual Dinner, at the Grosvenor House Hotel, London, Sir Roger echod the words of the late Baroness Thatcher — telling keynote speaker, the Chancellor George Osborne, that “this is no time to wobble, George”.
“Political and economic opinion remains more divided in detail than principle," he said.
“The CBI position, with no political alignment and only a pro-business focus, has been clear in its belief that financial rigour is the bedrock of recovery.
“Whilst siren voices may suggest relaxation — in the words of Baroness Thatcher, ‘this is no time to wobble, George’.”
Sir Roger welcomed the Government’s progress on a number of important areas for business, including a more competitive tax regime and reducing the burden of regulation — saying the direction of travel is positive and welcome.
But he warned that policy has been marred by slow execution and clumsy presentation.
“We have been clear with government as to the needs of business," he added.
“And to be fair, it has consistently responded: lowering taxes, both corporate and personal; reducing regulation; supporting sectors, not picking winners; encouraging diversity and discouraging greed, by dialogue and debate - not legislation and diktat.
“Our criticisms, rarely on policy or mindset, have focused on sometimes clumsy presentation and slow execution. But the direction of travel has been both positive and welcome. May it continue to accelerate — with less words, fewer initiatives and more action.”
Highlighting weak spots, Sir Roger urged the Government to focus on four key areas for action: executing policy; construction and infrastructure; increasing aviation capacity; and engagement with Europe.
“First and foremost, we need a relentless focus on execution — driving the plans for quick wins and fast starts; dropping departmental barriers that frustrate delivery; neutralising rivalries; and refreshing Whitehall culture from ‘playing safe’ to ‘making it happen’ — in energy, in defence, in transport," he said.
“Second, we need a greater focus on construction and infrastructure - attracting private funding, rephasing expenditure to front load activity; building social housing; creating jobs; and generating activity. Funding for Lending has helped. But ranking priorities; driving progress; and shovels in the ground — not words on the page — is the way forward.
“Third, we need to drive the export agenda by opening aviation capacity and loosening visa controls — with greater directional guidance at the entry level and financial encouragement at all levels.
“And finally, we need visible engagement with Europe — building alliances; identifying changes for the benefit of all; and arguing the case from the core not the fringe. Business and politicians must have the courage to challenge the conditions and the belief to champion the cause. We have clarity on process but uncertainty on outcome. Having erected the fence, we must all work to clear the hurdle.
“These issues mark the crossroads of our future — a role rooted in an improved Europe with a strong domestic infrastructure, like road, rail and air, efficiently linking us to a global market place.”
Looking ahead to next month’s government Spending Review, Sir Roger warned that ringfencing health, schools and international development funding in 2015/16 “must not be a licence for inefficiency” and that “financial rigour is the bedrock of recovery”.
“In the Spending Review, we must learn to live within our means. Ringfences must not be a licence for inefficiency," he said.
“As a nation, I believe there is a growing recognition that we are entitled to nothing — that welfare cannot be provided without wealth creation and grudging acceptance that austerity at home and exports abroad must be the twin track solution to our problems.”
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