Uncertain year ahead for business - New CBI President

The transition to a new Prime Minister and a reinvigorated Conservative party seeking to carve out new political ground will create uncertainty for business in 2007, the new CBI President Martin Broughton, chairman of British Airways, said today.

Employers want to feel secure about the future when planning their long-term strategies and investments which bring jobs and prosperity to the UK. However the coming year will herald a period of political change and manoeuvring, Mr Broughton said, which must not hold back moves to improve the UK's international competitiveness.

And, on his first working day in his new role, the new CBI president warned politicians of all parties that they cannot afford to take the business sector for granted as they fight for the mainstream.

He said: "Business will not be moved by party political grandstanding, but will react positively to initiatives which actually improve the ability of companies to get on with their job. Politicians cannot afford to take business for granted, any more than companies can take political or public trust for granted.

"The relationship between business and politicians is critical as the coming year sees legislation vital to UK competitiveness - ranging from skills to energy security and the planning system - coming before Parliament. This must not be derailed by politicians in pursuit of extra votes by taking a sideswipe at business, however unwitting."

The new head of the CBI went on to comment on what will be some of the big issues for business during 2007;

On climate change:
"The environment has, rightly, raced up the political agenda, and helping to tackle climate change will be centre stage for the CBI during 2007. UK companies are committed to playing a full role as part of an international, society-wide effort. But they need national governments to back market-driven mechanisms, such as carbon trading, to bring change, rather than opt simply for heavy-handed taxes."

On regulation and tax competitiveness:
"In today's world, where ideas and capital circumnavigate the globe in an instant, a country's attractiveness as a business location can shift very rapidly. Getting the tax and regulatory environment right has never been more critical.

"Politicians of all hues must beware of unwittingly wrapping firms up in a straitjacket of regulation. Companies need freedom to flourish and to create wealth and prosperity. The autumn has seen a new flurry of deregulatory promises - 2007 needs to be the year when the promises are finally delivered. We will be watching closely.

On pensions:
"The Government is, for the right reasons, driving through legislation to extend pensions saving to those who do not have adequate provision.

"But it must not overlook those firms which already offer good pension schemes yet are struggling to maintain them under the weight of the regulatory and cost pressures piled upon them. Companies with a legacy of public sector pensions promises made in a different era are having to work particularly hard.

"Simultaneously the Government's patently unsustainable and unfair public sector pension settlement has made it much harder for the private sector to resolve these problems."

On maintaining a champion for business within Government:
"With the future of the DTI seemingly up for grabs, whatever emerges from a reorganisation must leave business with a strong champion in the Cabinet."