John Longworth addressing the British Chambers of Commerce’s Annual Conference at Central Hall, Westminster at 10.00
Today (Thursday), the British Chambers of Commerce (BCC) will hold its Annual Conference in Central London. Addressing businesses and Chambers of Commerce from across the country, BCC Director General, John Longworth will call for the government to set business free and give firms the chance to make Britain great.
Check against delivery:
“Good morning and welcome to my first Annual Conference as Director General of the British Chambers of Commerce. And it’s a delight to be here, as I can think of no more important role at the present time, than speaking up for British business.
“We have 52 accredited Chambers in the British Chambers Network and in my first six months, I’ve visited many of them all around the country. I can honestly say I’ve been so very impressed by the vital work that Chambers are doing; encouraging enterprise, promoting business growth and in particular, supporting exports.
“Exporting is something we in the Chamber Network will be very much focussed on in 2012, and in the years to come. The Chambers are also the hub of training and apprenticeships in many business communities and the business centre of the wider social community that they serve.
“Whilst government initiatives come and go, Chambers of Commerce are always there for business, and I’m confident that Chambers are now more relevant than ever before. Chambers are leading a renaissance, which is vital for our country. They are so important to regional development and business growth.
“During this period, I’ve also had the privilege to visit businesses of all sizes and sectors, the length and breadth of the land. We have fantastic businesses in Britain. Companies that export flat screen televisions to China and plastic Chapatti boxes to India; export ice cream to Eskimos; clocks to Switzerland; posh, woolly scarves to Russia; and fizzy pop to Africa; businesses who design and build high-tech scientific equipment, and who make ecological fuels.
“And the people who make movies and who produce advertising; creative industries who cast art works; those who are in the performing arts and those who sell education; people who work online and who manufacture dreams; enterprises that are the best of consultancy, entertainment and financial services and that have customers across the globe.
“All of these businesses are busting a gut to grow, create wealth, employ people and find new markets for export. Most of them have told me: "It's tough, but we’re doing ok. What we really need, more than anything, is a truly, business-friendly environment.” And I say, that to achieve this, government must understand how the multitude of small regulations and interferences add up to a huge mountain to climb.
“On top of this, we have in Britain an impossible planning regime which prevents our development and growth. We have terrible infrastructure which adds cost and ‘dumbs down’ economic activity, and a shortage, in our people, of both soft and technical skills. We have young people failed by the education system and a Whitehall machine that knows nothing of how a business really operates - and cares less.
“We, at the British Chambers of Commerce launched our ‘Business is Good for Britain’ campaign a few weeks ago, and commissioned some independent research on public attitudes to business. I would imagine this will surprise some, but it showed that 82% of people thought that if a business creates wealth, pays taxes and abides by the law, it is good for Britain. Of course, many businesses do much more than this.
“But it’s clear that the people of this country do get it - so why do so many of the metropolitan elite, not get it?
“Why do some politicians take every opportunity to attack the productive sector of the economy? Why do sections of the media take delight in telling us how bad the economy is, rather than celebrating success? This has, I’m sure, caused 59% of people in that same survey to think that Britain is no longer a great trading nation, when in fact we are the sixth largest trading nation on earth, and the third largest service exporter. And we are able to do much more.
“Why do many officials have so little understanding of business and why do some, rather like the butler in Downton Abbey, look upon business, particularly medium and small business, with a superior, air of distaste – ‘only fit for the tradesman's entrance’. All the services we value; like those wonderful doctors and nurses and our NHS, those fantastic teachers and our schools, public services that we depend upon, pensions we rely on and the safety net that helps protect the vulnerable. All these things in turn, depend entirely on the creation of wealth, on enterprise and on economic growth, driven by the private sector.
“And talking of Metropolitan obsessions, why is it that we are so fixated on one quarter of the economy? Banking and public services together represent less than one quarter of GDP, and less than one quarter of employment in the UK. We obsess about them in the good times, and we obsess about them in the tough times. Yes, public services are having it tough, but they need to become more productive and things will get better.
“The banks are having a tough time, but they will get through it and come out of the other end with profitable business. We are already seeing signs of this. Yes, the banks are an important business sector in their own right, and they are even more important when undertaking what should be their primary role, of facilitating the real economy. They are big enough and ugly enough to take care of themselves and what they don't need is constant scrutiny.
“It is the other three quarters of our economy who ‘kept calm and carried on’. It’s the multitude of service sector businesses and manufacturers in the real economy that the government needs to focus on and the media need to encourage. It is the three quarters who will create wealth and employment, that need to be given the confidence to invest and the freedom to grow. It is, after all, the three quarters who are paying for the sins of the one quarter.
“So here we are in difficult, economic times. Never before has it been more important that government is prepared to be bold and take radical action. George Osborne has an opportunity in the Budget, less than one week away, to improve the business environment.
“Three priorities that I want to see dealt with are:
“Firstly, the freezing of business rates and the scrapping of the 5.6% rise planned for April this year. Businesses should not be hammered with a rise, whilst council tax is frozen.
“Secondly, a new capital allowance must be brought forward – a when it’s gone, it’s gone capital allowance fund of at least £1 billion to reward those businesses prepared to invest in the next two years, with a 100% capital allowance. This should be a tax priority.
“And finally on youth unemployment. The value of the Youth Contract should be doubled from £1 billion to £2 billion, so that the scheme can be extended to all the young people it could benefit. This should be a policy priority.
“In addition to these immediate priorities, the government needs to tackle aspects of the economy where there is national, market failure, for example in the area of infrastructure development. Reliable estimates show that we have an infrastructure deficit in the UK of a massive £400 to £500 billion. The private sector is willing to invest, but this capital cannot be unlocked without a proper plan. Business cannot deal with this issue alone, because it requires permission. It is, after all, a regulated area.
“Infrastructure investment and planning should not be a political football. Cross-party agreement must be reached to upgrade the UK’s infrastructure for the next generation and beyond. I’m talking about heavy duty stuff, like road building, airport expansion, sea port expansion and railways. But I’m also talking about digital infrastructure.
“And infrastructure is not just bricks and mortar. Just as important is the skills system and the intellectual infrastructure of education. A skilled workforce is crucial to every, successful business in the UK and developing the capability of our workforce must be a priority.
“Business invests £49 billion a year in skills training, far more than the government invests. But it’s essential that when young people leave the education system they have at least the basic skills that business needs – numeracy, literacy, professionalism, punctuality, concentration skills and the ability to take instruction. All of this is so important if business is to flourish and we are going to have the confidence to invest and grow.
“Of course, it’s crucial that we support the deficit reduction plan. But it’s equally important that we stimulate growth. If the government fails on either, the future for the UK will be very difficult.
“Finally, there is the vexed question of access to capital.
“We know that many businesses have cash, which they’re not utilising for investment, as a consequence of a lack of confidence in the economy. This is one of the reasons why our growth and investment proposals are so important, in order to release the latent energy of our business sector now, by building confidence in what the future holds.
“But there is also no question that there are many businesses who tried to expand and export last year, and who were thwarted as a consequence of a lack of access to capital and the cash flow problems that this creates. These two factors together; lack of confidence and lack of access to capital, undoubtedly choked off recovery in 2011.
“The banks are being asked to recapitalise and de-leverage. At the same time they are being asked to lend, a policy which would only have real benefit if they were also asked to be less risk averse. All in all, it doesn't work.
“If we are to kick start enterprise, the government must do something to make available significant funds for the real economy, at reasonable interest rates and a level of risk taking. It appears unlikely that the nature, or quantum, of credit easing will resolve this problem alone - although it will be welcome in the short-term.
“It’s high time the government considered the establishment of a state owned, SME or business bank, and that the Bank of England considered the purchase of business debt. The SME bank could be later privatised, and there are plenty of precedents around the world for this sort of institution. So why not in Britain?
“We live in trying times and these dictate innovative and radical solutions.
“So, my message to the government is simple.
“Set business free.
“Let business help.
“Stimulate private investment.
“Create access to capital.
“Incentivise the productive sector.
“Let the economy rip.
“And stop pussy footing around.
“We have great businesses in Britain, we have all the talent and the energy and the sheer hard work, give us a chance to make Britain great.”