Taking up the mantle of CBI President just as a growing body of evidence underlines the severity of the economic impact from COVID-19, wasn’t exactly how I’d hoped to start the job. Unfortunately, that evidence is the canary in the mineshaft and points to one of – if not the - deepest recession of our lifetimes. In the three months to May alone we saw the economy shrink by nearly a fifth. But that only makes me, and the business community, all the more determined to get the economy back on its feet; protecting jobs today and ensuring opportunities in the future, as we navigate these stormy waters.
The Chancellor recently set out his Plan for Jobs on top of the colossal spending already committed earlier in the crisis, which could amount to over £300bn. He and the government deserve enormous credit for their response so far to the economic distress that many businesses and workers are facing. The Job Retention Scheme has supported more than 9 million people and government-backed loans worth £45bn to date to over 1 million businesses which have saved countless jobs and businesses. It is testament to what we can achieve together between government, business and unions, working at speed and at scale.
And now, as the economy slowly but surely re-opens, it’s absolutely right that the Chancellor evolves those support schemes as they wind down and prioritise jobs in every corner of the country. After months of turbulence and job loss announcements, a plan to flatten the daunting unemployment curve about to hit our country could not be more important. Joblessness scars lives and hits the young and most disadvantaged hardest; it cuts people off from opportunities and a chance to reach their potential. As the UK gets back to work safely, unemployment is the biggest threat to livelihoods.
Prevention is better than cure, and that is why the government may yet have to take more direct action over the summer to support businesses. Many viable firms are facing maximum jeopardy right now still, the small window of opportunity is closing fast. The Kick Starter Scheme will help create jobs for the youth. But with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.
The Chancellor must continue to balance the need to invest in a long-term, sustainable recovery while responding to the urgent challenges that companies are experiencing today, like slumps in demand of such magnitude for some sectors, they have never seen the like before.
And if that business support is achieved, I am certain that British industry will thrive. As CBI President, I have four priorities for my term. Each of them vital in their own way during normal times, let alone as we look to recover from a global pandemic.
Firstly, the importance of entrepreneurship and advocating for the importance of SMEs. Having built Cobra Beer from scratch, I know first-hand the powerful role that entrepreneurs, innovators, and SMEs can play in the economy. From the outside, the CBI is often labelled as ‘big business’. We are incredibly proud to have most of the UK’s leading blue-chip companies in our membership, but the vast majority of those we speak for are actually SMEs; independent retailers, family-run firms and creative disruptors – 190,000 businesses throughout the UK employing over 7 million people.
Secondly, promoting the role of universities in supporting and developing research, innovation and skills in this country. As Chancellor of the University of Birmingham I am a passionate supporter of higher education. And we stand to gain so much from stronger links between business and universities.
Thirdly, diversity and immigration. Both are a critical component of a prosperous economy. I moved to the UK when I was nineteen. And this country has given me the opportunity to build my business and my career. So I believe that immigration and equality of opportunity play an invaluable role – not only in meeting our economic aspirations but ensuring that Britain continues to be one of the highest recipients of inward investment in the world. I also want to promote the participation of the Black, Asian and Minority Ethnic community in business, including on FTSE 350 Boards. We’re going to champion the Parker Review and make sure that there is a BAME colleague on every FTSE 350 board (FTSE 100 by 2021 and FTSE 250 by 2024).
And my final priority is our international outreach. I know ‘Global Britain’ is something people often talk about in the corridors of Westminster. But it’s real. Exports account for almost a third of UK GDP; we are and always have been a trading nation. I believe that making the UK an exporting powerhouse is critical to our economic recovery. All the more so once the transition period finishes by the end of 2020, by which point we must have a good deal to shield UK businesses from even more downward pressure and we at the CBI will do all we can to help the government achieve this.
The government has plenty on its plate – and growing. In just the last few days, we have had announcements on the future of a 5G network, and how our borders and a new immigration system will operate from January. This partnership must therefore endure and strengthen in the coming months.
There are many unknowns out there at present for us all, right now. But we can take heart that during this crisis, we’ve adapted as a people, we’ve collaborated as a people, we’ve put community spirit back into the community. And that’s business as well - not just our heroic key workers on the front line - throughout this crisis. British businesses are part of what makes the UK great, creating opportunities for people and funding our public services. Let us never forget it in the tough times that lie ahead; business is a force for good.