11 July 2017 Interview

The hot topics in politics

Following the snap general election and subsequent Queen's speech, John Foster, director of campaigns at the CBI, explores the recent upheavals in politics 

What are your reflections on the general election campaign and result?

Well, it’s fair to say the result took everyone a little by surprise! What the last year has shown though is that business is resilient. Through referenda and elections, businesses will continue doing what they do best – serving their customers, creating jobs and innovating. I think the election campaign itself, from a business point of view, was a little disappointing – it largely ignored many of the critical debates about the future of the economy and the role business can play – whether that’s reducing economic inequality throughout the UK, building a prosperous post-Brexit economy, or educating our children so they’re equipped to take the jobs of the future. These are big questions and business can help work with government to deliver the right answers.

How has the General Election result affected the Government’s legislative agenda?

It’s meant that some of the more controversial proposals in the Conservative manifesto, such as on social care or the pensions triple lock, were not in the Queen’s Speech. But the fact that the government has outlined a legislative agenda for two years, as opposed to the usual one, shows just how much the government’s legislative agenda is focused on Brexit.

The bills on trade and customs will go some way to providing the framework for what happens when the UK leaves the EU, but businesses will want to see, for example, how the customs bill relates to the Brexit negotiations.They won’t want to see a Bill that puts up barriers between the UK and our closest trading partner. For businesses, the urgent need for clarity is increasing with every week. That’s why Carolyn Fairbairn announced the CBI’s proposal that the UK should stay in the single market and a customs union until a final Brexit deal is in force.

There has been a lot of discussion of a “cliff-edge” in politics. Why is this topic of such interest to the CBI?

The CBI has been absolutely clear about the risks of not securing a Brexit deal and falling back into World Trade Organisation (WTO) rules. Our president, Paul Drechsler, said  it would open up a “Pandora’s box” of economic consequences, with businesses on both sides of the channel facing harmful new tariffs and regulatory hurdles overnight.

At a recent LSE lecture, our director-general Carolyn Fairburn expressed her concern that, even with a committed business community and a spirit of goodwill on both sides of the negotiation, the detail won’t be clear by the end of March 2019. We need to be realistic about this. So the only way to prevent that dangerous “cliff-edge” drop into WTO rules is to agree transitional arrangements. This would provide the UK with a smooth way out of the European Union, and pave the way into a new relationship with Europe. It would mean staying in both the single market and customs union for a limited period while a new relationship is agreed but it is absolutely not about staying in the EU by the back door. It’s about giving businesses stability and assurance, so that they continue to invest and plan for the future.

How has the election result affected the UK’s EU negotiations?

It hasn’t affected the timing – the negotiations began on 19th June as planned. But the CBI believes this result provides an opportunity to reset the strategy on the Brexit negotiations. Put simply it’s time to put the economics before the politics. If we want to ensure that, post-Brexit, the UK remains a great place to do business, then the next 18 months has the potential to be generation defining.

This is why it’s so important that the government conducts the Brexit negotiations in partnership with business. Working with business will help the government understand the ‘whole economy’ impact of the negotiations, but also provide them with access to the insights and expertise of a business community that can help solve some of the biggest problems that the negotiations will throw up.

Have you noticed a shift in the government’s engagement with business?

There was certainly a welcome change in tone towards business in the recent Queen’s Speech – it was hugely encouraging to see the government recognise the positive contribution that business makes to people’s lives. But it’s vital that this change in tone is backed by clarity and action – not least on industrial strategy, skills, infrastructure and Brexit. The introduction of the “EU Exit Advisory Group” – a key priority of the CBI’s business manifesto – represents a real step forward for business. This group will ensure that the CBI can continue to feed in the expertise, skills and insights of business into the government, to help the deliver the best deal possible for the UK economy.

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