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Four-pronged plan for new year

CBI boss urges ministers to back ‘prosperity agenda’

Carolyn FairbairnBusiness leader Carolyn Fairbairn is urging the government to stick to long term economic plan which she says has delivered a platform for further growth.

The CBI director general today outlines her four priorities for the year ahead: a long-term prosperity agenda; raising productivity; successful devolution and contributing to an informed debate on the UK’s membership of the European Union.

She urges ministers to plan for a long term growth agenda over short-term politics:

“2016 starts out with an enviable inheritance and plenty of promise,” she says. “The UK economy has delivered a 2.8% growth rate, almost no inflation and, best of all, the highest rate of employment since records began in 1971. I

“In the last year alone, British-based businesses created more than 400,000 jobs, despite heavy global headwinds and a rising pound. The Government has held fast to challenging and much-needed deficit reduction plans. These are extraordinary achievements and a great springboard from which to start the New Year.”

Ms Fairbairn says the UK’s strong recovery has “created the space to think clearly about what matters most for long-term prosperity” – the right skills and talent, world-class infrastructure, globally competitive tax and regulation, open access to international markets, with business able to make a strong and positive contribution to society.

“These are the pillars of a prosperous future, but they are too easily undermined by the short-termism of modern politics,” she says. “We need to avoid this pattern in 2016, and keep a sharp eye on the long-term.”

She will warn that while the CBI backs the Government’s aim to create more apprenticeships, the new apprenticeship levy risks failure through poor design, and that the UK’s “wrong-headed visa policies” are exacerbating skills shortages.

She urges the government to take big decisions on infrastructure, especially in aviation and energy, and get building roads, rail and more homes.

“Good business needs good infrastructure – yet the UK currently ranks 24th in the world, according to the World Economic Forum. We have fallen badly behind over many decades – we must catch up and then pull away.

Wireline industry“The Government’s recently postponed decision on aviation capacity in the South East was an abject failure of leadership. In 2016 the Government needs to demonstrate for real that ‘we are the builders’ – its creation of a National Infrastructure Commission is a good step forward.”

Business, she says, is faced with a number of extra strains that are adding up – the national living wage, the apprenticeship levy, pension auto-enrolment.

“Businesses want to reward their staff fairly, but as the burdens and costs accumulate, particularly in the retail sector, growth risks being cut off and jobs lost.

“Overall, UK policymakers need to deliver regulatory stability and predictability. Businesses struggle to invest when the rules repeatedly change – as we have seen in the energy sector where policy shifts have chilled investment.”

Ms Fairbairn says this must be the year when Britain gets to grips with its chronically weak productivity performance, which is 30% lower than in the US and 28% lower than in Germany:

“Many of the levers for productivity growth lie in the hands of businesses themselves,” she says, adds that Government has a role to play in closing the productivity gap.

On the EU debate, she says: “The British public deserves to hear informed arguments from both sides. Under my leadership, the CBI will do all it can to ensure this happens.

“We will provide clear evidence, share case studies from businesses of all sizes and sectors, host debate and discussion, evaluate reforms as they are achieved, and faithfully report the views of our members.”

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