CBI plea

Chancellor ‘must back markets to hit growth target’

Tony Danker: strongly welcomed growth target

CBI chief Tony Danker has urged the Chancellor to respond to financial markets’ concerns over his mini-Budget in order to give his economic reforms a chance of success.

In a speech ahead of the Conservative Party conference, the CBI’s director-general said that business broadly backs Kwasi Kwarteng’s strategy.

He said that business owners and the CBI have strongly welcomed the Government’s target of 2.5% long-term growth noting that it “has unlocked far greater thinking about our long-term productivity and competitiveness than we have seen in over a decade.”

He added: “Let’s be honest, when you’re looking to borrow hundreds of billions over the next two years, there is no risk-free path, so we must pursue stronger growth.

“Business stands ready to help because we see a genuine chance to transform the supply side of the economy and tackle long-term productivity weakness.

“This is the first time in 12 years that the Government’s leadership has made this such an overriding priority. We must not waste this moment.”

He added: “We don’t think the Government’s growth plan is perfect. There are things we wouldn’t have done and other things we would have. But there are some excellent and long-overdue decisions in there. It’s the start of a plan business can work with and one businesses are keen to make a success.

Mr Danker said the Government’s success is predicated on passing two credibility tests:

“First, the Chancellor must use every opportunity to show that he and the Bank of England are coordinating on inflation and that he has a robust plan to pay down debt in the medium-term.

“Second, the Conservative party have to back the Government’s economic reforms even when that means other interests falling second.

“This includes abandoning scepticism on net zero which is the UK’s best chance of better growth; being far more pragmatic on immigration than the Johnson Government; and tackling planning reform once and for all.”

Mr Danker said “the Government’s challenge is incredibly difficult, but I believe they are well aware of the balancing act required.

“They need to simultaneously fight inflation, fight recession, inject large financial support on energy costs and then take tough action to bring down debt. It will be impossible to do this without criticism but so long as they are working on all these fronts, they will find the best path through.

“Above all it means growth must come before other Conservative doctrine. On immigration, the economy is clearly suffering from labour shortages – let’s be open to more temporary visas for hard hit sectors and urgently renew the Shortage Occupations List.

“On net zero, this is one of the golden opportunities of our age for many reasons – let’s not go backwards, let’s unlock the green investments waiting in the wings. And on planning, so many important projects have to wade through treacle to happen – let’s make it easier for vital infrastructure to be built.

“The Government can now fill in the blanks on some of these areas, bringing forward legislation and publishing details on the promised policies. And next week the Conservatives need to embrace this prioritisation.”

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