Rain Newton-Smith speech to CBI annual conference 2024

Good morning everyone and welcome!

First a tremendous thank you to our corporate partners.

Richard and his team at Browne Jacobson who turn public private partnerships into reality.

And the University of Exeter, where I have seen first-hand world leading research on biodiversity and human health.

And finally Pladis. Salman and his team whose chocolate digestives not only keep my four teenage daughters powering through their days – but for all their support in making today possible.

We’ve got a brilliantly full schedule – with hopefully not a Peppa Pig in sight.

And while it has been an important but difficult road for the CBI and our people…

I’ve always believed in this organisation and the power of what we can do with you, our members, by our side.

Raising up the voice of UK business.

Fighting for a better economy and a brighter future.

Making the connections which help you as business leaders deliver the change you want to see in your local communities.

And I hope that with this packed room, our amazing line-up, our conference today, we can truly say…

…we’re back in business – thanks to all of you.

Right now, we – this country, this government, all of you –

…are standing on a shoreline.

And in the distance, there’s an island: a vision of growth.

The real, sustainable growth that we so badly need.

It’s a vision we all share.

It’s a vision the Prime Minister and Chancellor set out with strength and determination.

It’s a vision we in business feel down to our very bones.

But what we must all understand…

… is that there is only one force that can bridge that gap.

Only one force that can make that vision a reality.

And that’s the people in this room.

It’s the ideas, the ingenuity and the investment…

– of business.

You truly are the engine of growth. The ones who are quietly creating jobs, opportunities, and better quality of life in your communities.

But it’s been a tough few years, with too much time spent just fighting fires.

Boardrooms have been crying out for stability, optimism and the possibility of thinking for the long-term again.

That’s what we’ve been pressing this government for.

Be bold, be brave, give hope and have confidence.

And we saw the Chancellor deliver on that in part – with stability in our public finances, with the brave decision to create more space in our fiscal rules for capital spending.

This should unlock private sector investment in our infrastructure and the net zero transition.

It would have been much easier to focus only on the here and now, but instead this was a choice for future generations.

Then there is full expensing, the commitment to R&D.

And above all the corporate tax roadmap we called for, to give business certainty for the long-term.

When we look to the international scene, no one can be sure of what’s coming.

The long and tragic war in Ukraine, the devastating conflict in the Middle East, the spectre of rising protectionism and sabre-rattling from across the pond.

In an uncertain world, it is even more important that we stand up for what we believe in, that we raise up the voice of business and reach out our hands across borders.

And we’ve seen the government’s commitment to work internationally. Their leadership at COP29, where ultimately only investment by business will truly tackle climate change.

The welcome reset of our relationship with Europe.

The engagement with China and the recognition of its economic importance.

While things remain uncertain abroad, this government has put us in a strong position by drawing the curtain on a near-decade of instability at home.

What people are calling the “dullness dividend” of stability.

There’s a lot to be said for dullness. We could use a bit more of it in our lives.

But the challenge for all of us is when we look out across the water to our island of growth.

When we look at the OBR forecasts of just 1.5 per cent growth by the end of this Parliament.

That island we’re reaching for is still a long way off.

That’s because stability is a precondition, not a blueprint, for growth.

The missing piece – the steel that holds the whole bridge up – that’s investment.

Above all, it’s corporate Britain. Because vital as they are for jobs, for every £1 an SME invests, larger firms invest £500.

So what really defines growth – is the decisions made in boardrooms up and down the country.

It’s CFOs asking: can we afford to invest? Can we afford to expand? Can we afford to take a chance on new people?

Well after the Budget, the answer we’re hearing from so many firms is – not yet.

The rise in National Insurance and the stark lowering of the threshold, caught us all off guard.

Along with the expansion and rise of the National Living Wage – which everyone wants to accommodate – and the potential cost of the Employment Rights Bill …

…they put a heavy burden on business.

Companies I speak to want to be creating more opportunities, more investment, more training in their local communities.

But instead so many – especially in retail and hospitality – have gone into crisis containment.

Even where the risk isn’t critical, firms that have been through really tough years are now in damage control again.

They are looking with heavy hearts to cut training and investment, delay net zero projects, or pass on costs to customers.

Then there’s the farming sector and family businesses. Just days ago farmers marched past this conference centre in their thousands.

On top of NICs and all the other measures, they’ve had changes to inheritance tax and business property relief.

Some see those solely as personal taxes, but these are companies where the professional truly is personal.

And too many are fearful of the impact – fearful they can’t pass their livelihoods on to future generations.

As one family business owner told me, they’ve had to scrap investment they wanted to do – to put money aside just in case the worst happens.

Across the board, in so many sectors, margins are being squeezed and profits are being hit –by a tough trading environment that just got tougher.

And here’s the rub: profits aren’t just extra money for companies to stuff in a pillowcase. Profits are investment.

They shape your ability to invest and grow. Future profits are your reason to invest.

And from the leaders I talk to, they are clear – responsible business is using profit to solve the problems of people and planet.

That’s why profit’s not a bad thing. It’s not a dirty word.

If you’re a multinational, profits are projects that create new jobs in the UK rather than elsewhere.

If you’re a low margin business, profits are pay rises, health benefits, investment in technology.

And if you’re a small business, profits are survival.

When you hit profits, you hit competitiveness, you hit investment. You hit growth.

Almost two-thirds of firms told us this Budget will damage UK investment.

That’s why we’re still so far from that island.

From the growth the Chancellor has rightly said…

- matters “not only for politics, but for people’s livelihoods and life ambitions.”

Well, I didn’t come into this job to step back from our ambitions.

I am determined. I know we all are.

Determined to play our part.

Business leaders are naturally optimistic, energetic.

I mean, many of you have met our Chair Rupert.

The point is that after eight years of downcast ambitions, of weak growth…

I know we all dead-set on getting our economy moving again.

So my message today to government and to all parties is this – work with us to get there.

Let’s build that bridge together.

From now on, we need to shift from consultation to co-design. Tax rises like this must never again be simply done to business.

That’s the road to unintended consequences. Instead we need an elevated partnership for a higher purpose.

And the CBI stands ready.

And I know this government wants us to be that partner, to be a critical friend, to be able to speak truth to power.

But ultimately we recognise that elected governments are the ones who must decide.

So last, I want to set out three pillars for that bridge.

First the immediate.

Too many businesses are having to compromise on their plans for growth.

We can’t let that stand

Tax rises have put pressure on business. So we must relieve some of that pressure.

Let’s speed up fixing our broken business rates system.

Let’s help people into work.

Right now, there are an estimated 9 million working-age people out of the labour force.

Getting them back in and raising productivity are mission critical not only for growth, but for the wellbeing of our society.

Business is essential for that – but the Budget just made it harder for firms to take a chance on people.

Our survey showed half are now looking to reduce headcount.

And almost two-thirds are looking to cut their plans to hire.

The OBR says the National Insurance rises alone will reduce labour supply by 50,000.

But…

- if we made it easier for firms to provide occupational health at work, this could help 34,000 people stay in the workforce.

The Budget also announced £40 million for the new Growth and Skills Levy.

But what we need is immediate flexibility in the levy…

- so firms can use the funds for the training they need right now.

We need a whole systems approach to support the health of our workforce and our nation. Based on the insights and ideas of all of you.

Next let’s look to the world.

If you look at the most successful economies of the last 50 years, there’s one common denominator…

– a strong, clear and modern industrial strategy.

We’ve got a commitment from government to deliver it.

But what is not yet clear, is how it will help business in the everyday economy – the large employers who are often the first step into the world of work, the unsung heroes in our communities. How we support their workforce to be more productive.

Because I can tell you: if you don’t do that – your industrial strategy will not stand the test of time.

So today, I’m proud to say the CBI is launching its own Blueprint for Competitiveness.

It’s not just our contribution to the Industrial Strategy debate.

It’s a framework for how we can work together on UK competitiveness.

Through public-private partnerships.

It’s about how we transform economic challenges into opportunities.

How we build resilience against future shocks

Because with industrial strategy, you start global and implement local.

And let me be clear, this isn’t about picking winners. It’s about picking races – races we can win.

Building on the strength of every part of our economy.

Every business in this room – with all that you already do to make a difference.

As I’ve seen first-hand…

It’s firms in the everyday economy like ASDA supporting their local communities and driving up skills.

It’s vital manufacturers like Unipart in the Midlands helping electrify our transport.

It’s pioneers like Paragraf in Cambridge and Aspire Technology in the North East.

All of you – doubling down on your great strength, on your potential.

So we can win big on the global stage.

Finally, the third pillar in the bridge, the enablers of growth.

On regulation, the Chancellor’s Mansion House speech committed to putting risk appetite back in our toolbox for growth.

Now we need the same for regulators across sectors.

On tax, we need to go simple and we need to go digital – to save time for business.

On planning, it’s not only a simpler system but greater capacity.

On tech adoption, there’s extra support for manufacturers through Made Smarter.

But if we can push that to more sectors – we can add £45bn to our economy.

So let’s get to it – and fast.

Because growth isn’t just an ambition. It’s not just a nice dream to get across the water to that island.

This is existential.

We face a storm of challenges. Global protectionism.

An ageing population at home, a need to invest in our infrastructure, our people, our communities.

We want to reach that island and -- we must.

But if there’s one thing I’m sure of – with the ideas, the energy of business.

With each and every one of you.

We can build one hell of a bridge to get there.

Thank you.