"Business is good for Britain - is Britain good for Business?", the Lord Digby Jones Lecture
Thursday saw the 5th annual Lord Digby Jones Lecture where Lord Jones presented to around 250 Business Leaders in Birmingham. This year's theme was "Business is good for Britain.....is Britain good for Business?" and combined humorous anecdotes including the much repeated reference to the leader of the opposition as a "furry little woodland creature", with more serious political and economic commentary, focussed on creating the right environment to attract inward investment into Britain and encourage economic growth
After refreshments, Natalie Whittlesey opened the event with the results of a short survey, capturing the opinions of the delegates in the week prior to the event. Interesting themes emerging were:
- Compared with last year, the delegates' short and long term view of the economy is increasingly optimistic with 1/3 of delegates (compared with 10% last year) thinking the outlook for the next 6 months will improve and 81% saying that the longer term 2 year outlook is bright (up from 59% last year).
- 59% of the delegates believe that the coalition government are doing a good job, however this figure has steadily declined from 76% since their arrival in government two years ago.
- If the delegates were asked to vote now 58% would vote Conservative, versus 23% for Labour and 9% for Liberal Democrat (10% would vote 'other').
- Business priorities have largely stayed the same with the top two, Growth and Cost Cutting, switching places reflecting a slight shift in priorities towards Growth.
- Finally, many of the business represented have already capitalised in global territories with India taking the lead at 25%, followed by Eastern Europe and China at 21% and 20%.
Harvey Nash Chief Executive Albert Ellis then championed Lord Jones' insight, which is particularly welcome on the day news broke that the UK had finally officially exited recession, but while still facing instability across European markets.
When Lord Jones took to the stage, he covered a huge range of subjects as follows:
The Championing of British Business
Business, and the wealth created by business in Britain is a subject close to Lord Digby Jones's heart. Lord Jones felt strongly that the business leaders present should be proud of their knowledge of business, and the tax generated by their businesses is good for Britain.
It is this tax, generated by the wealth created by business, that pays for the public sector which is at the heart of Great Britain and without business, there would be no Great Britain.
The Rise of the East
With the US Election a hot topic at the moment, Lord Digby Jones provided the audience with a stark warning that our eyes should be focused on the appointment of the next leader of China, rather than the election of the next US President.
After all, we're witnessing the decline of US prominence and the rise of China. Indeed, the 21st Century belongs to China and our eyes need to be firmly fixed on this major player in the global economy.
Lord Digby Jones warned the audience that if we're going to succeed in Asia's Century, we have to understand the only international currency that really matters - Knowledge. Knowledge and innovation are driving the global economy; we need to harness the power of the Knowledge economy and use the international system of knowledge to claw our way out of the economic mess we're in.
Lord Jones stated that we have been lied to since 1945; we've had high spend and low taxation, we've borrowed to fill the gaps and now the funding for that borrowing has stopped. No one likes to pay more to get less, but there was never enough to pay for the pensioners of today and with girls born today having 25% chance of living to 100 and boys born today having 20% chance of living to 100, this problem is only going to get worse, unless we take action......and we need to.
Lord Jones said he was "thrilled to bits" that Jaguar Land Rover is owned by the Indian company Tata and wanted to express his thanks that they were continuing to do business in this country, Great Britain. Lord Jones warned the audience that foreign investment won't continue if they don't have access to more and better skilled people and a business friendly environment in which to do business. In order to ensure we remain an attractive country in which to invest, Lord Digby Jones identified 4 areas where Britain could make improvements and make Britain better for business:
In Britain, all children have access to 11 years of free education, yet 48% of children leave school without a grade C or above GSCE in English and Maths which Lord Jones believes is an absolute disgrace. In a global knowledge economy, it appears that Britain is just not good enough as far as education is concerned and for that reason we need to take action. Lord Jones has suggested that the youth of today need to be encouraged to understand that English and Maths are important, and also need to see that it is worthwhile to learn these skills. Lord Jones suggested some possible, yet controversial initiatives to encourage this:
- Every teacher of Britain should be contractually obliged to ensure that at the age of 12, 13 or 14 every child, medical condition absent, should have English and Maths skills equal or better to that expected of an 11 year old.
- If your child can't reach desired levels in Maths and English, medical condition absent, then benefits (apart from food stamps) should be stopped until they can meet these standards.
- Transport - We Need an International Hub
We need an international Hub Airport in the UK if we want to encourage investment and spending in Great Britain. Although with a hub airport 60% of people who use the airport don't start or finish their journeys at that airport, it's the 40% who do that matter- those 40% will spend, invest, trade and create wealth in the UK.
There are several options; implementing 24/7 flying with simultaneous take-off and landing at Heathrow, building a third runway at Heathrow, creating "Boris Island", or making much better use of Birmingham Airport which is currently operating at 40% capacity and building a high-speed rail link from Heathrow to Birmingham International Airport. One thing is for sure, if we don't invest in ensuring we have a Hub airport, in the next 5 to 10 years, we'll move into the EU second division.
Lord Jones pointed out that at the moment the solution we have is "banana" - Build Absolutely Nothing Absolutely Nowhere at All - and by continuing to do nothing, we're risking losing significant economic investment to other countries.
- British Blight - Scotland should not delay the referendum
With a Scottish referendum on the cards, but not for 2 years, Lord Jones believes that Scotland could be facing a similar fate to Quebec who, in the years prior to their referendum, lost significant business investment due to a climate of Governmental uncertainty. By delaying the referendum until 2014 to coincide with the 700th anniversary of the Battle of Bannockburn and the year when Scotland are hosting the Commonwealth Games and the Ryder Cup, Scotland could be putting themselves at risk of catching "Economic Blight" and severely risking Scotland's wealth creation. Yes, Scotland has a right to a referendum but they should not delay it.
- Less Regulation
We need to make Britain a place where it's easier to do business - we need a less regulated labour market where it's easier to employ and easier to fire employees. By doing this, small businesses would become an engine for growth by employing more people and this would create wealth through spending and taxation.
Lord Jones pointed out that through Employer National Insurance contributions, businesses are actually taxed for employing people- surely it would make sense to abolish this for small businesses? It seems this would be difficult as reducing National Insurance contributions for small businesses, would impact on Corporate Tax rates and it's the headline Corporate Tax rates that businesses compare when deciding whether to invest (on not) in Britain.
Lord Digby Jones drew to a close with a passionate dialogue about his pride in Britain, particularly in a year where Britain celebrated the Queen's Jubilee and hosted the Olympics. He advised that change needs to come from within rather than top-down and we're collectively responsible for Britain and making Britain good for business.
Following Lord Jones' speech the audience seized the opportunity to ask some extremely topical questions and Lord Jones provided some great insight into his views on topics such as: the well-known coffee chain who recently paid a relatively low amount of tax in the UK, improving leadership and management in businesses, the competitiveness of the UK today in comparison to 5-10 years ago and the difficulties faced by overseas visitors and students in obtaining visas.
In conclusion, The Lord Digby Jones Lecture was a thoroughly entertaining and incredibly insightful evening with some great commentary on current issues affecting the British economy. Lord Jones successfully balanced good humour with a very clear message about what he believes are the important issues Britain needs to address in order to be good for business.
By Helen Lawton