The timing of this year’s CBI Annual Conference meant Brexit dominated discussions, but did delegates come away any clearer about current debates?
Coming less than a week after a draft Withdrawal Agreement was struck and with less than a week until the emergency summit in Brussels, this year’s CBI Annual Conference was caught in the storm of debate around Brexit. So what were the key messages – from the politicians, speakers and businesses in the room?
From the Prime Minister:
Theresa May reiterated the outcomes she had wanted to deliver from Brexit negotiations – which she feels can be reached with the deal that’s on the table: control over our borders, our money and our laws.
She reflected the overwhelming mood of the room when she said it was time to focus on the new relationship we want to build with the EU, which “must set us on the path to a more prosperous future”.
“Jobs depend on us getting this right,” she continued.
For goods, she emphasised the importance of maintaining frictionless trade with the EU – because “while the world is changing fast, our geography is not”.
On services, she stressed the need for a more ambitious trading relationship than any existing free trade agreement – because “the UK is not just a European hub, but a global hub for services – and our future success depends on us continuing to be so”.
But on immigration, although she seemed to recognise business concerns, she insisted that a new system “must also command the confidence of the public”. Her emphasis remained on a skills-based approach. And by saying EU nationals would no longer be allowed to “jump the queue ahead of engineers from Sydney or software developers from Delhi”, she rekindled concerns that the current skills-based system for non-EU workers would simply be extended.
From the leader of the opposition:
Jeremy Corbyn criticised the government’s mishandling of the Brexit negotiations, warning that the Withdrawal Agreement “locks in uncertainty for another two, three, four – who knows how many more years?”.
He confirmed that Labour would vote against the government’s deal and demand a General Election if it cannot get it through Parliament.
Corbyn said he understood why business is so concerned about the prospect of a no-deal, but that the threat “simply isn’t realistic”. And, playing down the issue of time, he went on to set out Labour’s alternative plan for a “jobs-first agreement that could help bring our country together”. This includes a new comprehensive and permanent customs union and a strong single market relationship that “guarantees our country doesn't fall behind the EU in workers' rights or protections for consumers and the environment” he said.
Corbyn added that business needed to look at why the country voted as it did in the referendum, citing an unbalanced economy, under investment and failed economic policy.
“Business as usual isn't working,” he said. “And when the rules of the game aren't working for the overwhelming majority, the rules of the game need to change.”
From the CBI Director-General:
Carolyn Fairbairn was, like most business leaders in the room, pragmatic: the draft deal is not perfect, but it is a step forward, she explained.
“Crucially, if agreed, it would take the prospect of a cliff-edge no-deal off the table by unlocking the transition period. It’s vital we build on this hard-won progress in the coming weeks.
“Continued Brexit uncertainty is already affecting firms’ investment intentions, resulting in changes to companies’ supply chains, and in some instances, jobs moving.
“This is the moment when we all must compromise to achieve progress. Let’s not go backwards.”
On immigration, Fairbairn said: “It’s simply untrue to suggest access to European labour is dampening investment or negatively impacting UK productivity. It’s the opposite… We have built very successful businesses aided by free movement. That will come to an end, but any overnight change would cause enormous damage to our economy. It’s vitally important firms get ample time to adapt.”
And she reiterated the CBI’s three key targets for the future relationship with the EU:
- A guarantee of frictionless trade. In terms of supply chains and our businesses, it can’t as frictionless as possible – it must be entirely frictionless.
- We want a deal for our services. We are a great services economy and the future economic relationship needs to reflect that.
- We need a say over the rules. The UK is a major economy and has contributed significantly to good regulation – this needs to continue.
The impact on business:
CBI President John Allan highlighted the impact Brexit uncertainty is having on business with three compelling examples:
a life sciences firm in the North West that has cut almost all investment in the UK – diverting instead it to Germany and China;
- a Northern Irish tech firm that has stopped winning contracts because their aerospace customers are worried about Brexit;
- and a construction firm says it now costs an extra £20,000 to build a house, because of a shortage of materials and labour since the Brexit vote.
Other speakers from Alistair Cox, Chief Executive at Hays Worldwide to Romana Abdin, Chief Executive at Simplyhealth spoke of experiencing new staffing challenges – even before the UK leaves the EU.
A recent CBI survey found that 93 percent of businesses who responded were already finding it difficult to recruit new staff.
At Rolls-Royce, the concern for Chief Executive Warren East was less about recruitment and more about retention. “We’ve already lost people,” he said, citing uncertainty as the reason for a number of employees leaving the company for their home countries.
For Valerie Todd, HR Director for UK & ROI at Siemens, it means making sure that anyone interested in working for the electronics giant knows that it’s open for business. “We are out there in the labour market, talking about the roles we have available, so we don’t face the impact that everyone’s concerned about”, she said.
By making sure these businesses are places people want to work, they are stepping up to the challenge and demonstrating the resilience of British business. And turning attention to the other main theme of the day, much of the conversation from the stage focused on what business can do to nurture the UK talent of the future and help deliver prosperity for all.
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