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Rising costs and tax leave businesses with ‘damp spirit’, says CBI chief

·3-min read

A “September damp spirit” replaced “August ambition” among business leaders in the face of rising costs, the head of the CBI has said.

Tony Danker told a CBI-run online event on Thursday that businesses had been “infuriated by the tone” of the Government, which at times seemed to accused them of preferring cheap migrant labour to paying higher wages.

He said: “I’ve had calls from members all week with exactly one point which is, ‘Really? We’re doing this now? We’re not rolling up our sleeves to sort these problems?’”

However, he described the events of the last fortnight as “peak politics” that he expected to subside now party conference season had ended, saying: “Let’s see what happens on Monday.”

In his speech to the Conservative Party conference on Wednesday, Prime Minister Boris Johnson called for the UK to become a “high-wage, high-skill, high-productivity” economy, and ruled out returning to “the lever of uncontrolled immigration”.

Mr Danker told his audience on Thursday: “Every (CBI) member I’ve spoken to in the last 72 hours totally agrees with that vision.”

But on the Prime Minister’s suggestion that businesses wanted to “pull the lever of uncontrolled immigration”, he said: “If ever such a thing existed, and I don’t think it did, I honestly don’t know a business person in the country who thinks we should pull such a lever.”

He did, however, identify several obstacles to achieving the Government’s aims of bringing about a high-wage economy.

Chief among them was taxation, where he said the Labour Party was looking “better on business taxes” after shadow chancellor Rachel Reeves promised to scrap “unpopular” business rates while the Government has increased the national insurance levy.

Mr Danker said: “The crisis we have is every single piece of business taxation seems to be going up and I don’t think that’s a great plan for growth.”

He added that there was also “serious pressure on wages” thanks to the labour market running “hot as hell”.

But he warned price rises would follow without gains in productivity, saying some high street chains had already started looking at raising prices.

On skills, he agreed that there needed to be more investment but said the UK suffered from twin problems of not being able to tackle short-term skills shortages through rapid training and not being able to provide skills for the future.

He said: “We are wanting on digital skills, we’re really nowhere on green skills.”

In one example, he said, a further education college had had to scrap its electric vehicle maintenance course because so few people signed up and it had no financial incentive to keep the training going.

Defending the Government, Conservative MP Jo Gideon told Newsnight on Wednesday: “I am out there meeting businesses every day and I’m hearing two things: they are both enormously grateful for the support that they have from the Government during the pandemic, and also very much looking forward to being part of this massive chunk of jobs where they have support, apprenticeships and kickstart schemes to take new people on.”

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