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24 June 2024

Businesses Need Bold Decisions from Whichever Party Wins the Election  


GUEST COLUMN:

Ian Price
Director
CBI Wales

The nuts and bolts of the main political parties contesting the General Election were finally welded into place with the publication of their full manifestos.  

The CBI was ahead of the game following the recent launch of our Business Manifesto. It provides a roadmap for the next government – one which calls for long-term solutions, not short-term headlines, to unlock Wales’ long-term potential, redefine our growth trajectory and put us firmly on a sustainable path.

We want to see leadership from whichever party forms the next UK government to tackle the pressing issues businesses in Wales face from the moment it enters office and to develop a long-term plan for stability, growth, economic ambition, and prosperity.

The incoming government will face tough decisions against the backdrop of the public spending squeeze, and monetary policy is likely to remain tight. Although the UK recently emerged from a technical recession, April’s GDP figures highlighted lower consumer spending and construction growth, despite the brighter forecast of lower inflation and wage growth.

The latest UK labour market statistics showed pressures remain, with pay continuing to rise significantly faster than inflation, pushing up the cost of goods and services for Welsh businesses and consumers. Economic inactivity is rising, partly due to long-term ill health. All the major parties have proposals to tackle the problem. We need the Welsh Government and the incoming UK administration working together, building on initiatives such as Healthy Working Wales which offers help and support to employees and businesses in this critical area for worker productivity. Our manifesto also calls on the new government to expand tax-free occupational health support to incentivise business investment in early workforce health interventions to help prevent people leaving the jobs market.

We are very honest about the issues businesses face in our manifesto – from sluggish productivity and persistent labour and skills shortages, to underperforming business investment. These are challenges I see all too clearly in Wales, with the impact being felt by skills shortages particularly across the engineering, accounting, and finance sectors.

Wales has also been affected by a funding crisis for the devolved apprenticeships budget. Our FE colleges, higher education institutions and universities play a critical role in ensuring people – whatever their academic abilities – can learn a new skill and find employment, yet colleges and universities are in a funding crisis. I’ve been consistently calling for more funding to ensure the UK Apprenticeship Levy is distributed to local SMEs.

Despite policy around skills and apprenticeships being devolved to Wales, the future of work is a key election issue. Both the Welsh administration and UK government, whatever the latter’s political stripe after July 4th, need to be working together to reskill workers from the Tata plant in Port Talbot to equip them for jobs in the net zero economy. We also must ensure Wales is prepared for the challenges and opportunities presented by AI.

We’re calling for a more honest conversation about immigration – an issue reserved to the Westminster Government – to tackle labour shortages. Demand for it is a symptom of labour shortages and further restricting visas won’t deliver growth or public services, so we are calling for a cross-Whitehall review of the effectiveness of the immigration system to help the UK make the shift to a higher investment economy, reform of the Migration Advisory Committee to make it a truly representative body with representatives from all the regions and nations of the UK and, at the next government’s first fiscal statement, to announce a new remit for the Low Pay Commission. This body needs an open-ended objective to ensure the minimum wages allow firm to invest in the productivity aims for affordable pay rises.

The first fiscal event of the new Westminster parliament must also see an announcement of a new UK Business Tax Roadmap that uses the latest digital technology to create a world-leading regime that is designed with international competitiveness at its centre. The CBI has set out a series of tax roadmap principles that should be adhered to as part of an industry-informed framework.

To help reignite competitiveness, we also need Wales to meet the devolved Government’s 2050 net zero commitments and secure green growth, working in tandem with the incoming UK government. The CBI are calling for the creation of a Cabinet Office-level Office for Net Zero Delivery to ensure strategic and coordinated delivery of net zero in the devolved administrations, as well as the UK overall.

Planning systems play a key part in the net zero vision. Whether it’s the access travellers to and from Wales require to use HS2 or upgrades to improve the traffic bottlenecks on the M4 motorway, the big decisions require UK ministers to be working closely with their devolved counterparts.

Now is exactly the right time to make sure the business voice of Wales cuts through. It’s difficult for devolved nations’ voices to be heard in a febrile election environment – it’s our chance to seize the real growth opportunities up for grabs and speak up for businesses and educational institutions, from Bridgend to Bangor.

Firms in Wales have suffered a whole host of shocks in recent years, from the post-Brexit uncertainty for businesses to the pandemic and the impact of higher energy costs after the Ukraine conflict. This means the economy has tended to be more focussed on absorbing these shocks than boosting growth, but the businesses I speak to say there are bright spots emerging to tackle the persistent challenges the local economy faces, north and south.

Government needs to take bold decisions in the national economic interest. And business needs to work with them. Wales is at its best when politicians and businesses work together. And the General Election on July 4th gives us the opportunity to reshape our economy together and deliver on our shared ambitions for the benefit of everyone.



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