Skills upgrade 'a must' for UK economic recovery

Only "dynamic enterprise" will enable the UK to recover from the ravages of the coronavirus outbreak, Prime Minister Boris Johnson has been warned by the head of Britain's largest business group.

David Sapsted

11 June 2020

In a letter to Mr Johnson on Thursday, Dame Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), said job creation, skills training - particularly for the young - and investment must be the priorities in the post-pandemic world.

Dame Carolyn Fairbairn: "Without immediate intervention, pre-crisis inequalities across regions, gender and race will worsen"

And in a subsequent interview with the BBC, Dame Carolyn also warned the government that a failure to reach a trade deal with the EU by the end of the year would be a disaster for the UK economy.In her letter to the Mr Johnson, she praised the way government, businesses and unions had worked together during the health crisis. But she said the focus on fighting Covid-19 must not stop the country from implementing an ambitious economic recovery plan.“Amidst all the uncertainty, one thing is clear: the UK will only build back fast and better through a market-driven plan that supports sustainable growth. Dynamic enterprise is the only way to unleash the potential of our country and get ahead," she wrote.“A world class test-and-trace system is the foundation for a UK that is safe to visit, invest in, work and study in. Two other priorities also stand out: jobs, especially for young people; and investment.“Redundancies will rise fast over the autumn as support schemes, especially the Jobs Retention Scheme, wind down. Past recessions show the impact of joblessness is deeply uneven.“Without immediate intervention, pre-crisis inequalities across regions, gender and race will worsen. Long-term unemployment will leave generational scars. And business investment will need to bounce back fast to create the jobs of the future.“Time is of the essence. Smart, fast policy is needed now to accelerate the process to minimise the human cost and in particular protect the futures of our young people. Together with our members and in consultation with the unions, the CBI has developed simple, implementable proposals that can be acted on now to create the best possible recovery.”

CBI proposals for UK economic recovery from Covid-19:

Making job creation, skills training and opportunities, especially for young people, the top priority. Specific proposals included: transforming Job Centres into new Job & Skills Hubs to help create dynamic, local labour markets; a future skills fund to support areas with high job potential such as digital, low carbon and health; and introducing greater flexibility into the apprenticeship levy to help school and college leavers get into work.
Investing in the green economy to create new jobs, investment and a more sustainable future. Specific proposals included: a national programme to make every home a green home, starting with social housing; bringing forward funds committed to green infrastructure, such as electric vehicle charging points; and accelerating the gigabit broadband roll-out in all parts of the country including rural areas.
Targeted financial support to kick-start consumer demand and unleash UK competitiveness. Specific proposals included: a time-limited scrappage scheme to incentivise the take up of electric vehicles; extending business rates relief to mid-sized business in all sectors to reduce fixed costs; and an end-to-end review of regulation to accelerate key projects.

UK businesses: no capacity to deal with a no-deal Brexit

In her BBC interview, Dame Carolyn said that, after the battering British firms had suffered during the pandemic, they did not have the capacity to cope with a no-deal Brexit."The resilience of British business is absolutely on the floor," she said. "Every penny of cash that had been stored up, all the stockpiles prepared have been run down."The firms that I speak to have not a spare moment to plan for a no trade deal Brexit at the end of the year - that is the common sense voice that needs to find its way into these negotiations."As one member put it to me: just because the house is on fire, it doesn't make it OK to set fire to the garden shed."Related news: