Employers issue business agenda for next UK government

In September 2009, the Confederation of British Industry (CBI) published a ‘business agenda’ aimed at the next UK government, due to be elected by mid 2010. The 12-point agenda sets out the CBI’s vision for the new administration in terms of putting the economy on a path to sustainable growth. For example, the agenda calls for the next government to tackle youth unemployment, improve skills among students and reform public sector pensions.

On 28 September 2009, during the annual political party conference season, the Confederation of British Industry (CBI) issued a policy document, entitled New government in action: The business agenda (170Kb PDF). The document is directed at the next UK government and sets out a series of policies that the employer organisation believes the next government should adopt. The CBI underlines that, whichever party wins the next general election, a new government should act quickly, establishing clear timetables for implementing the agenda within 100 days of taking power.

Key policies

Central to the CBI’s agenda is the belief that the UK public finances should be balanced by 2015. Key policies in the employment and industrial relations sphere include:

• the reform of public sector pensions. According to the CBI, financial liabilities in current public sector pensions represent ‘an enormous and unfair burden for future generations of taxpayers’. Therefore, the CBI argues for the publication of ‘reliable estimates of the size of the liabilities as they now stand’, and the eventual implementation of reforms to pension arrangements to address the problem;

• increasing the skills of students in UK schools and colleges. The CBI argues that there is a great need to increase the number and quality of science, technology, mathematics and engineering graduates, given their importance to the competitiveness of UK industry in sectors that are ‘knowledge-intensive and high-value-added’. Specifically, the CBI advocates continuing mathematical and numerical education after the current statutory age of 16 years. It also argues that the most talented 14-year-old children should take extra science courses;

• action to combat youth unemployment more effectively. The CBI notes that youth unemployment now totals over one million persons in the UK, and is likely to have a corrosive effect on the lives and prospects of those affected by it. Therefore, the CBI advocates that the next government should set youth minimum wages and apprentice rates at levels that are ‘appropriate for young people’s employment prospects’. The government should also offer a subsidy of GBP 2,500 (€2,720 as at 27 October 2009) to companies that offer apprenticeships to young people;

• reforming public expenditure. The CBI’s agenda notes that ‘the public finances should be restored by re-engineering public expenditure plans rather than through further tax increases’. As part of the reform of public expenditure, the CBI emphasises the need to address the issue of workforce management in the public sector and the ‘inefficiencies’ associated with current practices.

Commenting on the agenda, the Deputy Director-General of the CBI, John Cridland, stated:

Any new government will have a lot to do in its early days, but the economy must be central to its plans, especially given the state of the public finances and the global downturn ... Some of the [CBI’s] priorities may surprise people. Not everybody expects youth unemployment to be a particular priority for business, but we know from previous recessions that it can scar generations and create lasting problems for young people as they make the transition to the world of work.

Commentary

It is likely that the next UK general election will be held in May 2010. Opinion polls and the verdicts of most commentators suggest that the Conservative Party, headed by David Cameron, is expected to form the next government. Mr Cameron has publicly stated that it will be necessary for a government led by him to implement short-term public spending cuts in light of the high existing budget deficit. This could have major implications for industrial relations in the UK, particularly in the public sector. Existing public sector pension arrangements and wage levels are likely to be the target of cuts in the event of a general tightening of the UK public finances. In turn, this could lead to increased levels of unrest among public sector trade unions.

Thomas Prosser, IRRU, University of Warwick