From education to employment

Build a joint venture on skills, says Carolyn Fairbairn at #CBI2018 Annual Conference

Director General Carolyn Fairbairn’s speech to the CBI Annual Conference 2018:

So what needs to happen next?

Well, the greatest achievements in our society have come when business and government have worked not in opposition, but in partnership.

The way our privatised energy sector, working with government, has cut emissions by almost 60% since 1990.

Or further back – Harold Macmillan’s housebuilding programme – 300,000 homes a year built by private companies.

What these examples have in common is this: they’re business and government, together, often alongside others too

We need that spirit of collaboration back again today, because too much of the UK’s current approach is characterised by enterprise and government acting apart.

So, what if, instead, we decide to build something different. As business, we might call it a Joint Venture. Others might call it something else. The name is less important than what it could do.

And let me give you just one example; in the area that matters most to business.

And that’s: people. If we built a joint venture on skills, we could create some hard-edged commitments on both sides.

As the government evolves the Apprenticeship Levy into a broader Skills Levy, business would respond in kind, and ensure that every penny of the £45 billion they currently spend on training goes into getting the UK ready for a new digital age.

This would transform the UK’s competitiveness, and at the same time answer the false challenge that business would rather recruit low-paid labour than invest in skills.

We can extend this thinking to immigration policy. The government is about to do something it has not done for 40 years: set the UK’s own, independent immigration policy.

It’s an opportunity, but it’s also a great responsibility.

And what has been proposed so far won’t work; the idea that anyone earning less than £30,000 can’t contribute to our economy, for instance.

Together, we could do so much better – through a jointly-developed immigration policy, one that avoids false choices, that does away with arbitrary targets, and focusses instead on the people we need to build our economy.

‘A moment for compromise’

There have been twenty months of negotiations since Article 50 was triggered. What we have on the table is a draft deal that while not perfect, is a step forwards. Crucially, if agreed, it would take the prospect of cliff edge no deal off the table by unlocking the transition period. It’s vital we build on this hard-won progress in the coming weeks.

Continued Brexit uncertainty is already affecting firms’ investment intentions, resulting in changes to companies’ supply chains, and in some instances, jobs moving.

This is the moment when we all must compromise to achieve progress. Let’s not go backwards.

‘Investment today creates jobs tomorrow’

Businesses are realists and pragmatists. And they desperately want to focus on the domestic policy agenda, such as skills, innovation, infrastructure to increase the UK’s productivity growth and competitiveness.

Continued uncertainty over transition means contingency plans have accelerated in recent weeks. Stockpiling is taking place and jobs are being taken out of the country. And crucially investment that would have come here has not. Recently £100m which was to be invested in the North East has instead gone to Eastern Europe – a pattern repeated elsewhere across the country.

Investment today creates jobs tomorrow – raising living standards – and that’s why securing a good Brexit deal matters so much for our prosperity.

‘£30k cap is too high’

It’s simply untrue to suggest access to European labour is dampening investment or negatively impacting UK productivity. It’s the opposite. While it’s a reasonable objective for the UK to want to bring immigration down over time, we need an open and controlled approach that meets economic needs and commands public confidence. We should focus on people’s contribution, not numbers.

We have built very successful businesses aided by free movement. That will come to an end, but any overnight change would cause enormous damage to our economy. It’s vitally important firms get ample time to adapt.

Furthermore, the proposed £30k salary threshold on people coming into the country is crude and arbitrary. If implemented, this will affect construction workers, care workers as well as architects’ assistants and lab technicians. All these roles and others who do incredibly important jobs that are vital to our economy.

‘The 3 key targets of a future relationship with the EU’

  1. A guarantee of frictionless trade. In terms of supply chains and our businesses, it can’t as frictionless as possible – it must be entirely frictionless.
  2. We want a deal for our services. We are a great services economy and future economic relationship needs to reflect that.
  3. We need a say over the rules. The UK is a major economy and has contributed significantly to good regulation – this needs to continue.

‘Step away from Canada’

The Canada model would not eliminate frictionless trade. It was designed for two economies that are far apart. The UK and EU begin from complete alignment. What we need is a bespoke deal that is right for the UK.

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