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THE TIMES – BUSINESS IS STRANGELY DIVIDED ABOUT HOW CONTROVERSIAL BUDGET CHANGES WILL AFFECT ITBack

NFDABudgetOf the leaders representing British business, the measured tones of John Cridland were a lone voice this week. Measured, but stridently critical.

Simon Walker at the Institute of Directors seemed – counter-intuitively – to shrug at the chancellor’s compulsory national living wage white rabbit, stating that it was a good thing and that most IoD member companies pay that level anyway.

Terry Scuoler at the EEF manufacturer’s federation, also supported the living wage. Even John Longworth, whose demographic within the British Chambers of Commerce is more acutely affected, responded with equanimity, sure that Government would take into account the impact on smaller firms.

Mr Cridland, the direct general of the CBI, declined to hide his dissent. The £9 an hour living wage, he asserted, is a ‘big gamble’ that takes no account of business’s ability to pay it. Higher wages should only come with higher productivity, he said. It will create real challenges for many businesses.

While he was about it, Mr Cridland said the levy on top companies to pay for apprenticeship schemes was a ‘blunt tool’ that business will resent.

Mr Cridland did not get where he is today, five years leading the CBI in difficult times, by criticising Government so loudly. It could be argued that he hasn’t had to. As his predecessor, left-leaning Sir Richard Lambert, was a perfectly judged appointment for a Labour administration, so Mr Cridland was largely on the same page as the Business department under Vince Cable, the first Liberal running trade in a century.

The irony of Mr Cridland’s criticisms this week is that he would have been reserving them for a Labour chancellor.

The records of the last two direct generals should have laid to rest the myth that the CBI is the Conservative party in business.

The first nine weeks of this Government are in danger though, of casting the CBI as the only cohesive opposition on business policies and the EU.

The impact of Sajid Javid’s recent lecture to the CBI in the new business secretary’s inaugural address to the body’s senior members cannot be underestimated. CBI leaders were shocked and angered not just by Mr Javid’s mocking criticism, but because they believe the minister misrepresented their position by stating the CBI wants to stay in the EU, whatever the outcome of talks.

Now it appears George Osborne is happy for his budget to be construed as a way to ‘kick British businesses up their lazy arses’. Asked yesterday whether he agreed with that comment attributed to an unnamed Cabinet colleague, the chancellor did not demur.

This is extraordinary. The CBI is used to getting a fair hearing from successive Governments because, though plainly a vested interest, it is deemed to have the national interest at heart.

Outside the populist vilification of the baking industry, the belittling of business by the traditional party of commerce is unprecedented in recent times.

The recent language of ministers has been deemed too toxic for the CBI to comment on. Last night Mr Cridland was declining to comment on ‘lazy arses’ but insisted all remains well. He detects no animus, he insists. He does not feel misrepresented or slapped down. Relations with Government ministers are good. ‘We have,’ he stresses, ‘an entirely normal professional relationship.’

About as normal as a Conservative chancellor raiding the Labour manifesto and being cheered by Tory backbenchers for increasing a minimum wage policy, which their predecessors 18 years ago were prepared to die in a ditch to prevent.

 

Posted by Sue Robinson on 10/07/2015