As the recovery takes hold, we need to make sure that all citizens benefit and that growth is properly balanced across the UK, John Cridland, CBI director-general will say in his New Year message today.
“The recovery is taking root and business leaders have a spring in their step compared to this time last year – but this is no time to rest on our laurels,” says Mr Cridland.
“Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work.
“As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze.
“It’s really positive news that jobs are now being created fairly consistently across the UK. Encouragingly, this is also shaping up to be a full-time recovery with the majority of new jobs permanent.
“For the first time since the start of the recession, 2014 will see most firms increasing the size of their workforce, boosting their graduate intake and the number of apprentices they take on.
“It’s important to remember that our flexible labour market has worked to save jobs and keep our economy going through a long drawn out downturn. Those who propose to damage that flexibility with inappropriate regulation put the very system that has kept unemployment here far lower than elsewhere at risk. And they miss the point; it’s not just the floor we should be concerned with – as Britain has a strong base of employment rights. It is also the escalator – how we ensure people move on from that first job.
“The good news is that wages will pick up in the year ahead as growth beds down and productivity improves. But there are still far too many people stuck in minimum wage jobs without routes to progression – and that’s a serious challenge that businesses and the Government must address.”
On the importance of skills and training, Mr Cridland says: “The future of the UK economy is undoubtedly higher-value and higher-skill, so training is critical to helping people move onwards and upwards, and key to our national success, particularly when it comes to delivering an effective industrial strategy.
“We need to widen the gateways into higher-skilled work for far more people, including those already working, or those for whom a degree may not be the best option. Of course, that doesn’t mean the end of the traditional three-year degree and universities will continue to play an important role in delivering growth.
“However, at the moment, employers and potential students alike simply don’t have enough information on study options like higher apprenticeships and part-time higher education. That’s despite some excellent, well-established, programmes at companies like McDonald’s and Asda.
“We need a UCAS-equivalent vocational system, with similar standing, to help raise awareness and parity of esteem for alternative routes to higher skills.
“And once people are in work, businesses can do more to help their employees reach their full potential. More than half of firms have or are considering mentoring schemes and a quarter are looking at issues around their workplace culture that may be holding staff back.
On the importance on securing a well-balanced economic recovery, Mr Cridland says: “The major lesson from the financial crisis is that as a country we need to move away from an economy that was far too reliant on consumer and Government debt. As growth picks up we must make sure that it is well-balanced.
“A sneak preview of our new CBI growth indicator, which we will officially launch at the end of January, suggests the recovery is broad-based and continues to gather pace. This new value-added analysis across our key economic surveys, covering the retail, manufacturing and service sectors, will act as an important bellwether on how the recovery is shaping up next year and beyond.
“In 2014, we do still need to see far more business leaders getting on planes to sell their products and services in new markets around the world. And as confidence continues to improve, we also need to see more companies re-investing their profits in the UK.
“And while the economic outlook is improving, business is moving into a period of political uncertainty with European elections, a referendum on Scottish independence, a general election, and a potential EU referendum all looming. Our view is clear: we are better off inside the EU reforming it from within, and the UK is more than the sum of its parts and we must stick together.”
On business trust, Mr Cridland says: “If 2013 was the year that business trust took a hammering on a range of issues from corporate taxation to energy prices, then 2014 must be the year that business leaders take action to rebuild that trust.
“The CBI will play its part and you’ll be hearing a lot more from us next year on how we restore and rebuild trust with consumers and ensure growth makes a difference to everyone.
“And while there is much to do, business already has a lot it can be proud about: businesses are behind 80 per cent of all jobs; have created more than 900,000 jobs last year alone; spend £49bn on training staff every year and contribute business taxes to the tune of £161bn in 2012/13 – that’s equal to nearly the combined spending on the health and education.
“With an election less than 18 months away, politicians must remember that businesses are absolutely crucial to driving the recovery home, creating jobs and raising living standards for all. My message to the public is that businesses are up for that challenge and 2014 is the year we will deliver.”