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Rupert Soames speech given yesterday to CBI annual conference 2024.

Good afternoon everyone.

My name is Rupert Soames, and during the previous 40 years of my career I have been running industrial and services businesses, including 20 years as the CEO of the public companies Aggreko and Serco, and I am currently proud to be Chair of Smith & Nephew.

I joined the CBI in January of this year and since February have been it's chair, in succession to Brian McBride.

I would like to pay tribute to Brian who led the CBI through a terrible storm and laid the foundations which have enabled us to re-establish ourselves as the pre-eminent voice of business in the UK.

Before we go and join the reception, I am going to whisper a few final messages into the Government’s ear, and I hope you might stay to listen to them.

But before that, some thanks are due:

To Keith Anderson and the Chancellor, Rachel Reeves, for their discussion around the proverbial campfire.

To the Leader of the Opposition and Governor of the Bank of England, for speaking during the day.

To our reception sponsors, Arcadis and Weightmans, who are keeping us watered and fed for the next hour.

To our conference sponsors who make this event possible.

Let me also thank all of our excellent speakers and panel members.

I want to thank the whole CBI team, who have put their heart and soul into making today happen.

Then finally, all of you, for coming, and making this a purposeful and worthwhile event.

The CBI exists for one purpose only, which is to serve you – and it has been terrific to have you all with us today.

You will have seen how in the last year we have been at the absolute centre of issues in politics and doing our job of speaking Government to Business and Business to Government.

I am delighted to say that since April, over 100 companies have joined or re-joined the CBI, and since the Election we have had over 400 meetings with ministers, civil servants and regulators.

Thanks to Rain and her team, and to you in this room, we are properly back, a year older, several decades wiser, and ready to celebrate our 60th anniversary of the granting of our Royal Charter to be of service to business and public affairs.

As we close this conference there are a few important messages I would like to make.

I think I can speak for all our members when I say that we wish the Government well and want it to succeed, in particular in its stated ambition to make the UK the fastest-growing economy in the G7.

To achieve this ambition, and at the same time improve government finances, there is one Big Thing the Government needs to do: reduce the number of people who are not working by about 1 million.

If we cut through the slogans of “growth growth growth” and “invest invest invest”, and the Government wanting to be “the most business-friendly government ever”, this is what we have to achieve over the next 5 years: get a million of the 9 million people of working age currently not in employment into productive work.

That will drive economic growth, it will increase tax revenues, and it will reduce expenditure on benefits.

And since the Government cannot afford to increase the nearly six million people employed by the public sector, that challenge of finding jobs for a million people is going to fall squarely on the nation’s 5 ½ million private businesses.

With a majority in the House of Commons of over 150, this Government has great power; essentially, subject only to the restrictions of the law, it can legislate for whatever it wants.

But with great power comes great responsibility, and particularly the responsibility to acknowledge that there are things it cannot do.

However much they might wish it otherwise, they make growth and investment happen by decree.

The Government can preach, beg, urge, facilitate, legislate, they can take the business horse to water, but they cannot make it drink.

Their ambition to deliver investment and growth will only be achieved if the owners and managers of the UK’s 5 million businesses decide for themselves to invest and grow.

These are decisions made not just by a few hedgies or pension fund managers, or even in the City of London, but in millions of boardrooms up and down the country.

From Muckle Flugga in Shetland, to Enniskillen in Northern Ireland, from Great Yarmouth in the East to Penzance in the South, there are hundreds of thousands of company directors who are sitting round their Boardroom tables taking the decisions which collectively add up to investment, employment and growth.

These are good people; experienced men and women; people to whom work-life balance is something others do; many have mortgaged their homes to create prosperity for themselves and their employees; people whose livelihood depends on being able to sniff the breeze, to see which way the market is going, what their customers will want next year.

Above all, they are people who value actions over words and they will decide if what the Government is actually doing, as opposed to saying, makes sense to them.

Or not.

Whilst fighting the election the government did an outstanding job of winning the confidence of Business and convincing us that, very genuinely, they understand that the solution to our economic ills is investment and growth.

But business people are ever watchful and over the coming months they will be forming a judgement about what the Government really thinks about business.

That judgement, once formed, will be hard to shift.

Winston Churchill said:-

“There are some who regard private enterprise as a predatory tiger, to be shot.
Some who regard it as a cow, to be milked.
A few regard it for what it is: the strong horse that pulls the whole cart.”

Our members understand that the Chancellor had difficult judgements to make, and had to raise taxes; as Rain said, many things in the budget are helpful, for instance the Corporate Tax Roadmap.

But there is no doubting the extent to which business has been milked in the last budget.

In the run-up to the budget and suspecting that it was going to be hard on business, we suggested to our members that they should assess the impact in the round, by which we meant across the whole gamut of Government policy.

Not just tax, but planning, regulation, training, employment law.   Giving businesses the confidence to invest and grow means joining many dots, of which the budget is but one.

The government now needs to work quickly on these other areas of policy to ensure that business confidence in the Government, so hard won during the election, does not evaporate.

At the moment, there are doubts that the dots of government policy join up.

This week, the Department for Work and Pensions is going to produce a paper setting out actions to help get a meaningful number of the 9 million back into work.

But at the same time, we have a budget which makes employing people, particularly the young, part time and low-paid, much more expensive; and we have an Employment Rights Bill which makes employing people much more risky.

These policies are directly in conflict with each other: on the one hand, the DWP is saying to business “please employ these people, many of whom have been out of work for years” and on the other, the Treasury is saying “you now have to pay tens of billions in additional NICs”; and the Department of Trade is saying “we are going to make employing people fundamentally much more complex and risky”.

It is hardly surprising that business people are scratching their heads and asking themselves: “what really is the government is trying to achieve, and how do these policies hang together?”

So, where do we go from here?

There is one thing the government could do: listen to the people who you need to deliver the growth, investment and employment you have promised.

Chat GPT tells me that there are at least 8 different types of listening, amongst them: Active, Passive, Empathetic, Appreciative, Selective, Reflective.

For our purpose there is only one type that matters: Real listening means an openness to changing course in the face of good evidence and rational argument.

An acknowledgement that the sum of all wisdom does not exclusively reside in Whitehall, that Government cannot legislate for investment and growth, and an openness to critical friends.

At the CBI, we are not so politically naïve as to believe that the decision around NICs is going to change in its fundamentals, nor that the increase in Living Wage will be reversed.

But having delivered a budget which adds billions to the costs of business, we urge the Government to really listen as to how government policy in the round – the Employment Rights Bill, Rates Reform, Planning, Regulation and the Apprenticeship Levy could be adapted to ensure that the words and actions of the Government are consistent with each other, and give Businesses the confidence that they can invest for growth.

This is what will make the strong horse of private business lean into the traces and deliver the Government’s ambition to make the UK the fastest-growing economy in the G7 and bring increased prosperity to all.

Thank you all for your support and attention, and now, away, to drinks and home.