Belfast Telegraph

Why economy is quickly climbing up to the top of UK government's agenda

Economy Watch

By Angela McGowan, CBI Northern Ireland director

It is not just politicians in a state of flux at the moment. The UK's uncertain future is denting confidence in the business community and has now crept into consumer homes too.

Last week the GfK consumer confidence index for the UK decreased five points bringing the June score to minus 10. Consumers are envisaging spending less on the high street with the 'Major Purchase Index' dropping eight points and sentiment around personal finances is declining, along with consumer expectations for the wider economy.

The Bank of England last week warned that households are relying too much on credit. In particular, credit card debt is a growing problem - rising by 10.3% in the 12 months to April.

Consumer-facing industries such as retail and hospitality are now bracing themselves for tougher times ahead.

With UK GDP growth falling back to a mere 0.2% growth in Quarter 1, the Scottish economy reportedly heading for a technical recession and inflation sitting well above the 2% target level, Brexit could be starting to have an impact.

Business knows how to work with the government, so it understands its concerns and priorities. The recent election result has led to a shift in sentiment though. We are now hearing more rational voices emerge from around the cabinet table and in particular the Chancellor, Philip Hammond, is expressing a softer Brexit message.

It appears that the economy might now be moving up to the top of the government's agenda where it belongs. After months of campaigning by the CBI's EU team, the UK government has agreed to the formation of a business Brexit taskforce.

With the Brexit Secretary, the Business Secretary and the Chancellor all involved, this will be a hugely important engagement tool for the business community going forward.

The need to make policy makers and government really understand how business works and the importance of business should never be underestimated. Indeed, there is a growing national and political conversation under way about the role of business in society.

Our prosperity and our living standards are linked to the success of business, but business cannot make a full contribution through its expertise, investments and ideas to create a more inclusive economy when people don't always see the value it creates.

We at the CBI are committed to demonstrating the value of business and ensuring that business has the right to be heard on the issues that matter.

Brexit is only one example of where the business community can provide government with information and case study examples around policy impact.

There are many other areas of the economy where the business community must have a strong voice and work in partnership with government if we are to deliver a successful and fair economy that works for everyone. For example, in areas such as corporate governance and executive pay.

Following the financial crisis, business behaviour, particularly executive pay, has been placed firmly in the spotlight.

Business must now engage constructively with this wider debate about the different levels of reward and representation across organisations.

We at the CBI are listening to our members and working with government to shape the right mechanisms to deliver better outcomes in this and many other areas.

One of our CBI campaigns known as 'The Great Business Debate' aims to encourage constructive conversation about the true value of business.

This campaign aims to set out the facts and combat the myths about what business does and the contribution it makes.

It encourages people to give us their views on business and where it needs to do more, and provides an opportunity for business to take part in a constructive conversation about what it does and how it does it.

The business sector has so much to offer in terms of job creation, investment and raising living standards for both local communities and the entire nation.

Given the prevailing uncertainty triggered by leaving the EU, there has never been a more important time for the CBI to play its part in shaping our economic future.

  • In Economy Watch on July 18, we hear from Paul MacFlynn, senior economist at the Nevin Economic Research Institute

Belfast Telegraph