Analysis: Optimism and pessimism at the CBI
The political climate is not well-suited for either David Cameron or Ed Miliband to win over British businesses. Yet one’s willingness to lay out and defend his economic plans may have trumped the warnings of the other.
This was never going to be good timing for the government. Just one week has passed since the comprehensive spending review confirmed sweeping public spending cuts not seen in Britain for decades. So the CBI’s annual conference was inevitably going to be a challenge for the prime minister to make his plans for a “relentless” pursuit of economic growth credible.
Those plans relied on infrastructure spending, a notable area which survived much of the cuts announced by George Osborne last week. Cameron has addressed the CBI many times before, but this is the first as prime minister. He used the advantages of being in power to full effect, with a series of timely announcements spearheaded by a National Infrastructure Plan.
Cameron’s speech was not all rhetoric, but its success or failure nevertheless rested on the spin he placed on his plans. The language was intended to convey a broadbrush optimism at odds with the current gloomy mood – hence the emphasis on a “new economic dynamism”. Being forward-looking -“we’ve got to boost the big businesses of tomorrow, not just the big businesses of today” – is always going to be the best way of doing this.
Miliband, still new in the job, might have been expected to start from a blank slate. He tried his best, speaking less than an hour after Cameron’s address, by explaining that his aim was to “start to build with you a relationship”. This is language the business world understands. Yet it soon became clear the new Labour leader was not starting afresh.
He had to simultaneously defend the last government’s policies while distancing himself from them. Miliband’s speech concentrated on fixing the economy – but doing so in a way which did not blame Labour’s approach for the mess we’re now in. “If we misread the history, we will fail to tackle the wider structural problems,” he warned.
In the 1990s, Miliband explained, Labour learned to love business. Doing so in the 2010s requires a different kind of conversion. This is based around less obvious courtship tactics – like boosting financial regulation, for example. It was tempting for Miliband to play up the more attractive elements of Labour’s approach. “In the absence of commercial finance, it is right that sometimes government steps in,” he insisted.
The emphasis on fixing the economy’s problems placed Miliband on the defensive. His strategy appears to be to accept the obvious riposte – that Labour had 13 years to step in and implement reform – and move on.
Miliband’s problem is that he has no clear-cut solutions. His aim is not yet to unveil policies, he made clear. There will be no 2015 manifesto just yet. In fact, as the question and answer session revealed, there is no alternative on offer on how Labour would tackle university funding, either.
Cameron had laid out a clear route towards further growth. Miliband could only offer warnings about the perils of the government’s approach. “I honestly have to tell this audience that [the government’s spending cuts programme] is a big gamble with growth and jobs,” he said. Later on, he added: “I hope the economic gamble will succeed. I have fears it won’t.”
While Cameron’s talk of the best period in British entrepreneurship in the nation’s history seemed a bit far-fetched, at least it had the virtue of concrete policy plans backing them up. Miliband, for all his willingness to acknowledge the Labour government’s failings, did not have the same luxury.
Last week shadow chancellor Alan Johnson turned down the chance to deliver his vision for an alternative route to economic recovery fundamentally different to that laid out by the reassuring Cameron today. Many business figures present will feel Miliband has failed to fill in the gaps.
