Lord Bilimoria celebrates a bright future for a collaborative and competitive UK, in his speech to the CBI Annual Conference.
Internationally competitive nations and regions hold the key to creating better living standards at home through higher productivity growth, said CBI President Lord Bilimoria.
The message came as part of a wide-ranging speech, delivered on the last day of the CBI Annual Conference. It was given in front of an audience of business leaders at Swansea University - one of eight locations chosen for this year's event.
Lord Bilimoria highlighted the UK's vaccine success as a template for how business and government collaboration can have global impact and success. And, post COP26, he praised the UK's leadership on the world stage.
Transcript - check against delivery
Good morning, Ladies and Gentlemen both here and tuning in around the country.
Just think back to where we were exactly two years ago, a General Election campaign underway. Brexit still not done.
The onset of a global pandemic not yet known.
Just think where we were this time one year ago.
We were in our second lockdown, having started our first on 23 March 2020. With huge uncertainty and ambiguity.
We were days away from the first COVID-19 vaccine being granted regulatory approval in the UK.
When there was hope at last. Light at the end of the tunnel.
We have been through hell. And as Winston Churchill said, “If you are going through hell – keep going”.
And we did.
And I’m so delighted to be here in person in Swansea – on the final day of the CBI’s first-ever, pan-UK Annual Conference – 3 days, 6 live locations, 25 sessions and 67 speakers.
We have a packed schedule today, broadcasting from Wales to Woking.
Shortly, we will be holding a panel on making the UK a global trading powerhouse.
First, though, I would like to thank the CBI’s strategic partners Accenture and Hays. Alongside our corporate partners Advanced, Lloyds Banking Group, National Grid, Ricoh, Salesforce, and Vodafone Business for making this conference possible.
And I would like to thank CSconnected and Swansea University for hosting us here.
CSconnected, the world’s first compound semiconductor cluster.
A group of manufacturing and innovation leaders who show the strength of great regions like South Wales in future-focused industries like advanced manufacturing.
And Swansea, a university that is world-renowned for its research – and has more than 500 research partnerships with businesses across the UK.
And that, like Birmingham University, of which I have the honour to be Chancellor, speaks to our country being a world-leading, competitive and innovative economy.
Today I’m going to talk about how we can draw on the lessons of the last 12 months, and our work together – the CBI and its members, academia, business and government: to achieve those ambitions and build a stronger, more sustainable and successful future across all parts of the UK.
Building a truly Global Britain.
Looking back
2021 was a watershed year, where the UK has been at the centre of the global stage.
Back in May, I had the privilege as CBI President to chair the B7 summit, ahead of the UK hosting the G7.
And I remember, the IMF’s chief economist Dr Gita Gopinath saying that a country like the UK, which would need to borrow £400bn due to the economic impact of COVID, to save businesses and jobs ─ one of the countries with the highest levels of government support, in both absolute and per capita terms, combined with our world-leading vaccination programme ─ would bounce back and have a strong recovery post pandemic.
But what has happened in the intervening six months?
Labour shortages. An energy crisis. Queues at the petrol pumps. Global supply chain challenges. The Pingdemic. And rising inflation, hitting 4.2% in October.
The government has formed the supply chain advisory group, chaired by former Tesco Boss Sir David Lewis, and a taskforce for reopening the hospitality sector, and the CBI and our members are working closely with both of these.
The CBI is also constantly putting forward solutions right into the heart of government to deliver actions that make a real difference to our members. But we believe much more is needed.
That is why the CBI has called for a COBR for Recovery – to bring business and government together to find rapid, substantive and pragmatic solutions to these issues.
Because we know that government and business working together is so powerful.
Just look at when the Prime Minister appointed Kate Bingham, now Dame Kate Bingham, from the private sector and empowered her to run the vaccine taskforce in May 2020.
Working with the backing of the government, the taskforce ordered six vaccines, including the first two to be approved - the PfizerBioNTech and Oxford AstraZeneca.
With the first vaccination less than seven months after her appointment, on 8 December 2020.
Just imagine how amazing this was, when there was no certainty of a vaccine being produced and the shortest time to develop a vaccine before was four years.
In August last year, I started calling on the government for the rollout of mass lateral flow testing, and from earlier this year onwards, lateral flow tests have been available free of charge to every business and to every citizen in the country.
Survey after survey has shown that these tests are very effective.
Since January this year, the CBI and I have been calling out to the Government to put as much focus and urgency on finding repurposed treatments to prevent hospitalisations and deaths from Covid.
Particularly since Sajid Javid has taken over as Secretary of State for Health, we have seen excellent progress.
Today, one day after another, treatments are being announced.
One of the options coming through the regulatory approval process is the Pfizer oral antiviral candidate, with interim analysis showing an 89% reduction in the risk of COVID-19 related hospitalisation or death, compared to a placebo.
I am confident that, with the combination of vaccines, testing and treatments, we can now hopefully avoid any further lockdowns as we learn to live with the virus.
And I am proud to say that the CBI and business also led the way internationally when there was the tragic Covid outbreak in India, my country of birth, back in March, April and May.
We mobilised our members to donate critical supplies from oxygen concentrators and oxygen cylinders to medicines and more.
The generosity and willingness to help was immediate and substantial, including working with the Prince of Wales’s charity the British Asian Trust, for which I am truly thankful.
Collaboration
Over the last two years, business has stepped up in the service of the nation to tackle some of the greatest challenges of our time.
But the question now is how do we get past those challenges? Unlock our potential. And become a truly Global Britain?
It starts with being collaborative, something we must do not only regionally – as Tony Danker outlined on Monday – but also internationally.
To build up the strength of our vital regional economic clusters.
We already have a strong story to tell here.
One of the best examples of the power of collaboration at home is the Cambridge cluster. Built around a truly world-beating university that has more Nobel Prizes than any other.
It began as a tech cluster around Acorn Computers and Sinclair Research. And it is now home not just to leading tech companies like Arm. But also a thriving life sciences cluster.
So today when we talk with pride about the Oxford-AstraZeneca vaccine where are AstraZenica's headquarters? Cambridge!
And just yesterday AstraZeneca opened its £1bn new global research and development facility to be located in Cambridge too!
A powerful demonstration of what collaboration between universities and business can achieve in our economic clusters across the country.
And there are many more.
For example, a few years ago, the University of Birmingham’s Centre for Railway Research and Education – under the leadership of the world-renowned Professor Clive Roberts – was given the Queen’s Anniversary Prize for Higher Education.
At the ceremony at Buckingham Palace, I told his Royal Highness the Prince of Wales that we were developing technology that would one day make the Royal Train hydrogen powered.
We all laughed, but fast-forward to COP26 this month. Not only had the University of Birmingham developed the HydroFLEX – the world’s first retrofitted hydrogen train. We even had Prince Charles – as well as Prime Minister Boris Johnson – aboard.
I also chaired a meeting of International Transport experts onboard the train.
Another remarkable achievement that could only come about because of collaboration.
Between the University of Birmingham, the government’s InnovateUK, rolling stock company Porterbrook, as well as nearly 30 other businesses.
Another example - at COP26, I spoke on a panel about Hull with the leader of that city’s council, and the Chancellor of the University of Hull, a UK Managing Partner of EY, the only big four firm in the city, and the Chief Executive of Reckitt, one of the world’s largest companies – whose origins are in Hull and who are now investing £200m in the region.
A panel that yet again showed the power of business, government and universities working together to develop our vital regions.
Now we must build on this.
That is why, speaking alongside the Prime Minister on Monday, Tony our Director General announced the launch of the CBI Centre for Thriving Regions, to expand and replicate some of our most successful regional clusters.
And we have launched a universities and business taskforce to bring together and focus our business and university members on clusters, regional development, R&D and innovation.
Collaboration can also, of course, be global.
The last two years have been a defining moment for the UK’s role on the global stage, first with B7, then G7, which fed into our hosting of COP26.
In the one and a half weeks I spent in Glasgow for that transformational event, business was present in force for the first time in COP’s history.
There is now a genuine belief in the challenge of climate change.
The CBI teamed up with Deloitte on an excellent initiative, the goal 13 platform. And we published the latest impact report from this in October just before COP26.
79% of businesses believe climate is a mega trend.
89% of businesses have at least one climate related target.
And what gets measured gets done.
At a B20 event at COP26, which I spoke at, it was noted that while 1 megawatt of coal creates 1 job, 1 megawatt of solar power creates 7.4 jobs.
Jobs Jobs Jobs.
And business is making serious commitments.
60% of the FTSE 100 with a market cap of over £1.2 trillion have already committed to net zero by 2050.
Business is walking the walk too.
At the beginning of this year in the midst of the pandemic, EY committed to going net zero in 2021 and they achieved this by October – business walking the talk.
And I had the privilege of chairing the CBI Heat Commission last year, which fed many important recommendations into the government’s new Heat Strategy.
A third of carbon emissions come from heat and half of this from buildings.
Changing this calls for new technology from hydrogen pumps to district heating and, to me, the most important of all: hydrogen heating – which we are already testing.
And it will also create up to 200,000 new jobs.
As the PM said when he addressed us at the B7 in May, “The race to net zero is not a zero-sum game”.
You can cut reliance on coal and grow your economy and create skilled jobs.
From 1990 to 2019, the UK has cut its carbon emissions – including international aviation and shipping – by 41%, while the economy grew by 78%.
The UK has already shown its leadership in offshore wind power.
And there was also Boris Johnson’s announcement, at the start of our Annual Conference on Monday, of the creation of up to 145,000 more EV charging points.
Exactly the kind of detail we need to seize the opportunities of the green industrial revolution. And the Prime Minister is spot on with his 10 point plan for a green industrial revolution.
And there is still more we can do.
For example, with the potential of small modular nuclear reactors, like those being developed by Rolls Royce.16
And when it comes to the circular economy, I can think of no better example than my own business manufacturing beer.
The waste malt from the brewing process is used as cattle feed. The waste yeast from the fermentation process is used to make Marmite. We use as little water as possible, and the wastewater is treated to be used. And even carbon dioxide is captured and reused – I could go on.
We are also very conscious of the need to collaborate to protect biodiversity.
The Dasgupta Review, led by Cambridge University’s Professor Partha Dasgupta, described nature as our most precious asset.
It showed that one million animal and plant species are believed to be threatened with extinction.
Working together, we can prevent this.
As Sir David Attenborough said this immensely important report shows us how by bringing economics and ecology face to face, we can help save the natural world and in doing so, save ourselves.
Swansea’s own son, Dylan Thomas wrote, “Youth calls to age across the tired years: ‘What have you found, he cries, ‘What have you sought?’”
Survey after survey shows that the two things that matter most to young people today are the climate crisis and diversity and inclusion.
As the first ethnic-minority president of the CBI, I am proud to have launched Change the Race Ratio - which champions increasing ethnic-minority participation across all business.
Leading businesses have committed already, and I urge you all to sign up.
As we know all too well, the pandemic has both highlighted and exacerbated long-standing inequalities – national and global - like never before.
As Dr Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation said in her speech at B7, the continent of Africa has 18% of the world’s population and only 0.15% of the world’s vaccine manufacturing capacity.
Here, the UK has stepped up with its involvement in the UN-backed COVAX initiative to roll-out Covid vaccines in developing countries across the globe.
Competitive
The UK is the most amazing country, and we must use our strengths to not only collaborate at home and abroad, but also to compete on the global stage.
We are only 1% of the world’s population and produce 14% of the of the most highly-cited research papers.
We are 1% of the world’s population and are the second largest services exporter.
We are 1% of the world’s population and yet we remain one of the top destinations for inward investment.
We are 1% of the world’s population and, we have the best universities in the world, along with the US.
We are 1% of the world’s population and one of the most entrepreneurial countries – the UK is home to the third highest number of tech unicorns in the world.
But we cannot be complacent. Both the UK’s Global Investment Summit and COP26 highlighted that, as we emerge from the pandemic, there is a wall of investment waiting to be deployed to spark sustainable growth.
So now, our challenge is to create a business environment that will attract and unleash that investment.
Because if we don’t, our competitors surely will.
The recent Budgets saw some small steps in the right direction. Like the modernisation of R&D tax reliefs to include data and cloud computing costs – and the super-deduction was also exactly the type of move the UK should be making.
But there are big areas where we must improve – to attract that vital investment.
When it comes to R&D innovation, we invest 1.7% of GDP, which is low compared to Germany whose R&D expenditure was the equivalent of 3.2% of GDP in 2019, and the US where it was 3.1%.
Imagine what we could achieve, if we invest another £20bn a year, it would power ahead our already powerful capabilities in this area.
The government have said they want a high-wage, high-growth, high-investment, high-productivity economy. Business agrees.
But right now, we are facing a high-tax economy.
This includes the planned corporation tax rise from 19 to 25%.
An increase in National Insurance by 2.5 percentage points – 1.25 percentage points for employees and 1.25 percentage points for employers.
All the while business rates still need fundamental reform.
The burden of property tax in the UK is four times higher than Germany’s, three times higher than the OECD average, and higher than any other G7 country.
Together, this all adds up to the UK having the highest tax burden in 70 years.
Higher taxes threaten to stifle our recovery.
What we need is to stop hiking taxes and focus on boosting investment. Because this is what will lead to growth, which will lead to more jobs, a higher tax-take and the debt being paid down.
Because right now, government spending is set to reach the highest level since the 1970s and debt as a percentage of GDP is at almost 100%.
Back in the Second World War, debt hit almost 250%, and it took us until 1962 to reduce it to 100%.
Yet even during some of the toughest times, the UK was still working towards achieving a better tomorrow.
When, three years into the Second World War – with no clear end in sight, even in the midst of crisis, the government commissioned the Beveridge Report laying the foundations for the welfare state and the NHS, transforming our country’s future.
And that is exactly what we are doing at the CBI: looking to the future.
In May, our outstanding new Director General Tony Danker, who this month has completed a year in post, published our economic strategy for the next decade: Seize the Moment.
A blueprint for how we can secure £700bn worth of opportunities for the UK economy by 2030.
It has six pillars:
- Decarbonising our economy.
- Putting innovation and future technology front and centre.
- Reinvigorating our global trade.
- Building thriving regions and nations,
- Adapting to a changing workforce – more dynamic, skilled and inclusive than ever before.
- And building a healthier nation.
The CBI is perfectly placed to not only be the voice of business in the UK but to lead the way.
There is a perception that we speak only for the big businesses, of course we do. But we also speak for 190,000 businesses, including 200 trade associations from the National Farmers Union to the Law Society. Covering every sector in the economy.
We are present in every region of the country.
And the CBI is global in its outlook and presence with offices in Delhi, Washington, Brussels and Beijing.
If we want to continue to be the 6th largest economy in the world, if we want a high-wage economy, we need to have high skills, high productivity and a high investment economy.
When it comes to skills I have spoken about our best of the best universities.
And it is so reassuring that we have Nadim Zahawi as our new Secretary of State for Education secretary.
At a recent CBI leader’s dinner, he said that the Education Department is an economics department, music to our ears!
At the CBI we have calculated that businesses will need to invest £130bn over the next 10 years in reskilling.
We have highlighted that 9 in 10 people will have to re-train or re skill by 2030.
We have an apprenticeship levy that needs to be far more flexible.
We have good initiatives from the government such as the Kickstart scheme - which the CBI called to be extended and the government has listened.
The government has expanded Skills Boot Camps. And introduced the lifelong loan entitlement, which is wonderful.
As a member of the Adult Centenary Commission, which reported in 2019, this was similar to one of our main recommendations of developing individual learner accounts.
But the lifelong learning loans are only starting in 2025. Why are we waiting, we must start now?
Building on this, business must also have access to the labour force it needs.
And, at the CBI, we have recommended that the Government should revamp the Migration Advisory Committee, by giving it a similar status to the Low Pay Commission – widely acknowledged as one of the most successful public policy interventions in decades.
Why? Independence.
We would add economists and businesses to the MAC’s membership, to be able to flex and independently activate the shortage occupation list on a periodic basis.
So, the essential components, to keep the UK competitive include: Action to increase business investment, keep taxes smart, and tackle labour and skills shortages.
But there’s another element too, and that’s boosting our global trade.
The UK has always been a great trading nation.
And this year, we published for the first-time ever an integrated review for our country - incorporating our security, defence, development and foreign policy strategy.
Our vision for the UK’s role in the world with trade at its core.
For nearly four decades, all our trade deals were negotiated by the European Union.
And, over the last five years, the UK’s Department for International Trade did an incredible job.
It signed trade agreements with 66 non-EU countries, and one with the EU.
A remarkable achievement, which many thought would be impossible.
On top of this, I am proud to say the CBI has played a major role helping with new trade agreements, such as with the UK-Australia FTA.
This is a truly comprehensive agreement including goods and services, IP, innovation, SMEs, digital and mobility, including young people.
This was followed by our FTA with New Zealand, and an enhanced trade partnership with India – with a target to double bilateral trade by 2030.
Formal negotiations of the UK-India FTA are starting imminently.
So, the opportunities are huge for global Britain.
To put this into context the whole of the Commonwealth, comprising 54 countries makes up less than 10% of the UK’s exports.
The USA is our largest single trading partner for exports, by far (21%) and there is no prospect of an FTA in the future there.
Yet let us not forget that over 40% of the UK’s trade remains with the EU, our biggest and closest trading partner.
In the EU, individual countries are our largest partners - for example, Germany and Holland - and many EU countries want even closer bilateral ties with the UK post Brexit.
This was very clearly articulated by the extremely impressive Greek Prime Minister in our session yesterday.
Here, the objective is simple. Post-Brexit, we need to normalise trading relations with the EU.
End the politicisation of trade. Work together to advance common interests.
Let me speak plainly. Our new relationship didn’t begin smoothly. Red tape still hampers firms today. But here again we can illustrate the gains collaboration can bring.
By working through the Business Brexit Taskforce – a body called for by the CBI and which still exists today – we put industry in the room with government decision-makers to get things done.
There have been weeks of intensive discussions between UK and EU negotiators on the trickiest of all topics –the Northern Ireland Protocol.
On this topic, I speak for businesses not only in Great Britain and Northern Ireland, but for those around the world willing both parties to agree a compromise, allowing us to look forward, not back.
And there is one overarching thing we must do to unlock the potential of a truly global Britain: we must harness the power of these competitive strengths on the international stage.
We must back more UK firms of every size, sector and region to go global and export.
We already know exporting companies are more productive, more innovative, and – as we saw during the pandemic – more resilient against economic shocks.
Government has already laid the foundations for this, with its new Export Strategy launched last week.
An important step to help business connect to international markets and navigate our new relationship with the EU.
Now government must get the delivery of that strategy right, putting small business at the heart of the recovery and inspiring exports to build long term resilience.
Industry are already leading with the new Trade in Services Council announced in the Export Strategy to amplify the success of the UK’s world-beating services industries.
At the CBI, we will also support the UK’s exporting strength by bringing together businesses in our regional mentoring programme.
And we are launching a Global Trade Hub as a single source of online export advice and insight.
You can get involved in this crucial project by joining our International Trade Advisory Group or one of our working groups. and by nominating your business to be an Export Superstar, hitting the mark of exporting 10 products to 10 markets. Something only 14% of UK businesses who export have managed so far – compared to 40% in Germany.
This has to change.
We also need the UK to continue to be a magnet for inward investment – we already have so many great strengths.
We have the globally respected London Stock Exchange. Our legal services are the best in the world. Our judges and courts are the most respected in the world.
There are our world-class financial services and insurance sectors. This year Ron Khalifa’s review also highlighted the huge potential of our fintech sector.
And, since the financial crisis, our regulatory system is far more agile, innovative and robust.
We have also had Lord Hill’s important Listings Review to bolster our advantage and encourage investment.
But there is so much more we can do to unlock the deep pools of capital we know are out there. From developing new models to encouraging more businesses to use our public markets to grow.
We must enable more investment in R&D too, to support the decarbonisation drive.
And looking to the future, all our economic regulators should strive for dynamism by prioritising investment, innovation and agility as part of their core remits.
Conclusion
Throughout what I have said I hope you will see not just the challenges but the huge opportunities and amazing capabilities of our country.
We have always punched above our weight.
We have always been world leading, innovative and creative.
Britain is a global brand that is trusted.
Last year one of my Harvard Business School Professors Frances Frei gave a lecture on trust. Describing trust as a triangle of authenticity, capability and empathy - the UK has all three in abundance.
We are trusted around the world. We must always be collaborative and we must be competitive.
The motto in my business is to aspire and achieve against all odds with integrity.
That is what we as a country must do looking ahead to the future.
And most importantly, we will do it not just by being the best in the world, but also by being the best for the world.
