Watch the webinar
- Tony Danker, Director General, CBI
- Sonia Khan, Associate Director, Cicero/AMO
- Torsten Bell, Chief Executive, Resolution Foundation
- James Harding, Editor and Founder, Tortoise Media (Chair)
In this session:
- It’s been two weeks of "peak-politics" – we’ve tried not to get too caught up in this and not fall into traps.
- It’s been a tough week for Govt – response to crises, end in Universal Credit uplift dominating the press.
- On business: PM made a big push around enforcing higher wages and pulling back the "lever of uncontrolled immigration".
- In response, the CBI continued to highlight need for more agile MAC to meet skills/labour needs and deal with current crises – especially in the run-up to Christmas – alongside important conversation and long-term skills development and immigration e.g., reforms to the apprenticeship levy, lifelong learning entitlement.
- Currently - wages, prices, and taxes are all going up but what skills, investment, and productivity levels aren’t. The economy has returned to centre-stage of politics.
- Looking ahead the budget in October will be the next important moment. CBI has been clear in our proposal for a boost for business investment (building on the Chancellor’s super deduction policy).
- Just raising wages - not a magic bullet. Need wage growth with real investment incentives otherwise you just get higher prices.
- Everybody I speak to is flagging serious pressure on wages - labour market is hot as hell - across every sector. Whether this is temporary or permanent we’re not sure yet but speaking to members already putting wages up and having to consider putting prices up as a result.
- Both parties wanted to achieve similar objectives with their conferences which was taking on their party - rather than each other. For Labour – preparing for an election, and for the Conservatives, redefining new centre and what ‘Johnson-ism” is. Clearly a government with re-election front of mind and business-engagement on the periphery.
- Risks: real emergence of libertarian wing of the conservative party and more factionalism – still not sure on their economic approach. Many are pushing for much less government intervention which may run risk in terms of hindering government investment.
- Telling businesses, they can deal with the current crises may be an attempt to appease this side of the party.
- Morality – is tax more ‘moral’ than debt for the Conservatives? One of biggest drivers on Rishi’s speech was not to laden future generations with debt and goes into election preparations. Debt tends to be what chancellor’s have at the back of their mind in terms of legacy and seems like he is gripping treasury on the agenda rather than the other way round.
- We’re at risk of slightly over-intellectualising Johnson’s speech: Johnson understands you need to have an argument about what is going on in the country right now. Currently it's rising prices and shortages so went in with a big bang on this at the conference.
- He’s someone that is known for delivering on policies people didn’t think he would, like Brexit and lower migration, so not too surprising he’s focusing on this.
- On the big picture: good for Britain to aim for higher wage economy as we do have some sectors stuck in low wages and lower productivity than most other countries, alongside business stagnation.
- Key current risks: cost of living and prices going up, plus real wages falling by Christmas. Marks a political danger for the prime Minister as seeming out of touch. Real risk of a “cost of living crunch” coming down the track.
- On Labour party and the economy: they’re against NICs but tax row between parties more likely to be on where you put up taxes rather than if.