Business leaders and policymakers must avoid repeating the mistakes of the financial crisis as they steer the country’s economic recovery, the CBI’s new director-general has warned.
Tony Danker said that plans needed to address chronic problems affecting the economy, such as weak business investment, regional inequality and poor productivity growth.
“It may seem that to talk now of the decade ahead is misplaced, but I think it’s what the crisis demands,” he said at an event organised by Bloomberg. “Build back better is easy to say, but much harder to do. It needs a vision, a plan and a consensus as a nation to pursue it. I don’t think we did that after 2008.”
Pointing to figures that showed productivity in London was almost a third higher than the UK average, and more than 50 per cent higher than in the Yorkshire and Humber region, he said: “We stabilised the economic system immediately [after the financial crisis]. Then we stabilised the public finances and we achieved modest economic growth. But our productivity growth flatlined and our society divided rather than united.”
The government has said that levelling up opportunity and prosperity nationwide is a key priority. However, Danker said that the approach was focused too much on public sector investment.
“There is little yet in place to tackle the business sector competitiveness of our regions,” he said, adding that there needed to be a greater focus on driving investment in research, development and innovation as well as working out ways to improve adoption among businesses.
Danker joined the CBI in November, taking over from Dame Carolyn Fairbairn, who stepped down after five years in the role. Previously he was head of Be the Business, the not-for-profit movement set up by Sir Charlie Mayfield, the former John Lewis Partnership chairman, where he looked at Britain’s poor record on productivity in comparison with European countries, such as France and Germany.
He said that his past experiences had given him reasons to be optimistic about the outlook for the economy: “I am a total believer. I share the prime minister’s enthusiasm for what lies ahead.
“We have perhaps the best financial services cluster in the world and have shown our leadership in global science and life science industries. We also have a strong competitive edge in professional services and our creative industries are the envy of the world. The future is filled with prizes for those who reach for them.”
He called on the business community to work closely with policymakers to ensure that Britain emerged from the pandemic stronger. “For me, the CBI, and every business leader I speak to — we’re clear that our job in the coming weeks is to support the country in beating this virus and getting business back on its feet.”
We must not repeat mistakes made after financial crisis, says CBI chief