2018 Must Be A Year Of Unity, Clarity And Urgency – At Home As Well As On Brexit

Business Insights

In her year-end letter to members, Carolyn Fairbairn, CBI Director-General, reviewed 2017 and considered the business priorities for 2018, which will help to ensure that the economy thrives in all corners of the UK.

She wrote of the difficulties business and industry has been facing due to the multiple uncertainties resulting from the tricky political climate post Brexit. Likening the year to

“a roller-coaster ride, full of jaw-dropping twists and turns from the start.”

She praised the resilient response of industry while commenting on the toll that the general atmosphere of uncertainty had taken, noting that while the global economy enjoyed a boom, the UK economy shifted down a gear, with 2017 GDP growth of around 1.5% compared with 2.3% in 2016.

Although some investment was postponed and in other cases halted, manufacturing order books ended the year in good shape. International investors love doing business in the UK but everyone has ended the year longing for greater clarity.

She said,

“Thankfully the year has ended with some good Brexit news. We all breathed a sigh of relief when the EU Council in mid-December confirmed that trade talks can now begin and a status quo transition has been agreed in principle.

“While Brexit is the top political and economic issue of the day, it is only part of the picture. Many of the fundamental building blocks of our economy – skills, innovation, and infrastructure – are firmly within our control. The transformational challenges of our age, such as AI, digital and low carbon, amplify the need for urgent action. Ensuring domestic priorities stay high on the Government’s agenda has been a key theme of our year.

“And there has been welcome progress. The Industrial Strategy, published last month, represented ‘a decent first step, and we saw two budgets that were broadly good news for jobs and investment’.”

Looking ahead to the opportunities and challenges in 2018, Carolyn commented on the hard work ahead which will be needed to achieve a binding agreement on the Brexit transition terms if we are to keep jobs and investment in the UK, accompanied by progress on a framework for a final deal by the end of the first quarter, that will deliver barrier free trade with the EU.

She called on politicians to work to business timescales and to come together to deliver consistent clarity and certainty in order to achieve the right result for our country.

She said,

“We should be under no illusion about the scale of heavy lifting needed in 2018. The world around us is transforming. While the UK is consumed with Brexit, China is building a global infrastructure through One Belt One Road while other nations are seizing the opportunities of the fourth industrial revolution.

The world won’t wait for Britain. We must get on, at speed and with great determination, with adapting our economy for the future.”

Carolyn repeated the calls for an urgent transformation of our skills base, saying, that the UK is facing a skills emergency. Weaknesses in supporting young people into the labour market are of longstanding, but the changing nature of the jobs and skills required has made the situation critical.

She said

“The clock may be ticking on Brexit but it is ticking just at fast in our schools, colleges, universities and workplaces.

“The CBI will be campaigning for reformed careers advice in schools and to ensure every young person gets quality guidance and at least 4 interactions with working life by the age of 16, in every nation of the UK.

“We will also champion the effective delivery of higher quality technical education, including T-Levels in England, a reformed apprenticeship levy and real progress on mass adult reskilling.”

Besides a strong reskilling program Carolyn also called for more practical action to support innovation in 2018, and promises that the CBI will work with businesses and universities to improve the UK’s approach to commercialising the leading-edge research we deliver so successfully.

At the same time, action is needed to ensure companies adopt tried and tested technologies that will improve productivity.

Carolyn also stressed the requirement for a focus on infrastructure calling for major projects to be delivered on time and efficiently throughout the year. Making progress on the big projects is essential – Heathrow, Hinkley and High Speed Rail. The CBI will keep up the pressure, but local delivery aligned to regional economic plans is equally important. The pipeline is there – now the taps need switching on.

“But one thing is sure – business has a vital role to play in building a bright future for our country. The CBI and the thousands of firms we represent look forward to working in close partnership with a united government to improve lives for everyone in 2018.”