It’s a great pleasure to be here.
I’d like to congratulate Carolyn on her first year as the CBI’s first female Director General.
This has been a challenging time for business and Carolyn has shown great insight and leadership.
I’m also grateful for your invitation.
And I’d like to reciprocate by inviting Carolyn and your President, Paul Drechsler, to the conference Labour is organizing with our European partners in February, where we’ll discuss how best to achieve the smooth transition through Brexit that Paul was talking about today, both for Britain and Europe.
Six years ago, the CBI, TUC and the Equality and Human Rights Commission jointly issued the Talent Not Tokenism report to promote greater diversity in business.
Not only because it was the right thing to do but because it’s good for business. And thanks to those companies which have delivered real results since.
Now the TUC, under my friend Frances O’Grady, and the CBI are both led by women.
And I’d also like to congratulate Paula Nickolds on becoming John Lewis’ first female managing director.
Paula rose from the shop-floor and after 20 years ended up running the organisation.
It took me a little longer but we both got there in the end!
Now if you’d told me two years ago I’d be addressing the captains of industry at the CBI Annual Conference, I’m not sure who’d be more shocked … you or me!
But we do have a lot in common.
As leaders, we’ve all had to deal with enormous change and instability.
And some of you have faced the odd challenge along the way.
Tell me about it!
However, now we all face some of the biggest changes and challenges of our time.
The title of your conference is Innovation, Growth and Prosperity in a World of Disruption.
And there can be few bigger potential disruptions to the future growth and prosperity of the UK than a mishandled, chaotic Brexit.
But before focusing on Britain’s decision to leave the European Union, I want to reflect on the economic conditions that contributed to so many people across the country voting to leave.
There were many reasons.
But both Britain’s decision to back Brexit and the election of Donald Trump are an unmistakable rejection of a political establishment and an economic system which hasn’t been working for most people.
It’s a system that’s delivered ballooning inequality along with falling or stagnating living standards for the majority.
As the UN Secretary General, Ban Ki Moon, has said “Tackling growing inequality, in rich and poor countries alike has become a defining challenge of our times.”
Real wages are lower today than in 2008.
Andy Haldane, the Chief Economist at the Bank of England talks about “a lost decade” in terms of pay.
But those statistics and soundbites don’t give the measure of the real problems that people face in today’s jobs market.
Over six million workers earn less than the living wage – more than one in five.
More than a million people are on insecure temporary contracts without full rights.
Labour’s Shadow Work and Pensions Minister, Debbie Abrahams is currently working with the Federation of Small Businesses to look at what can be done to support the growing army of self-employed people whose earnings are no higher today than in the mid-1990s.
The gender pay gap is now locked in at nearly 20 pence in the pound. At the current rate of progress it will take another 50 years to close.
And if you’re a disabled person you’re nearly three times as likely to not be in work.
That’s why we’ve launched our Disability Equality Roadshow to hear from disabled people in and out of work about their experiences and better inform our policy.
For too many families in Britain increasingly insecure work means they cannot plan for their future, or how to pay the bills, mortgage or rent.
There are far, far too many people struggling to make ends meet.
Because wages are low, hours are insecure and rents are too high.
They are not ‘just about managing’. Many are just about surviving.
This is what happens when government and the economic model it’s relied on for a generation fails to deliver.
What we have seen in Britain, the US and elsewhere is the rejection of a failed economic consensus and a governing elite which has not listened.
This is a corporate as well as a political failure.
And after the latest global wakeup call from the US the need for a real alternative to a failed economic and political system could not be clearer.
So those of us who want to see an open, tolerant, more prosperous Britain must make common cause in the battle for that future for our country.
It’s a future that must be based on us working together to achieve social justice and economic renewal rather than sowing fear and division.
Every business needs a plan for a stable and successful future.
But following the British people’s decision to leave the European Union, businesses have been plunged into huge uncertainty by a Government which has no plan at all.
I believe when it comes to Government there’s bad intervention and good intervention.
Bad intervention wants to name and shame you on the basis of how many foreign workers you employ.
Bad intervention wants to punish you with a shambolic Brexit that limits our ability to trade with the world’s largest trading bloc on our doorstep.
As Carolyn has said, a Brexit deal without tariff-free access to the Single Market would ‘close the door’ on an open economy.
Bad intervention also covers an international trade secretary who says, and I’m quoting, so please don’t attribute this to me, “You’re fat, lazy and spending too much time on the golf course!”
I remember Labour’s pro-business strategy in opposition in the 1990s was known as the ‘Prawn Cocktail Offensive’.
This government’s attitude seems just plain offensive.
After six wasted years, the government’s failure to invest in infrastructure and scientific research has put at risk our future prosperity.
British employees are now a third less productive than American, German and French workers, not because they don’t have the drive, talent and spirit to succeed, but because this government prioritised ideological cuts over investing in Britain’s prosperity.
Their absurd fiscal rule meant they treated capital investment like resource spending – like treating credit card debt the same as investing in a mortgage.
Now there is an opportunity for the new Chancellor, Phillip Hammond, to change course and take the bold action necessary to support our economy.
Last week, Labour’s Shadow Chancellor, John McDonnell, set out three tests that we want the government to meet:
First, we need a credible fiscal framework that ends austerity and supports investment crucial to make our whole country successful post-Brexit.
To do that the government needs to replace its failed fiscal framework with Labour’s Fiscal Credibility Rule drawn up with world-leading economists to provide clarity and confidence in our approach.
It would ensure we will only spend what we earn but allows flexibility to invest for the long term in order to grow the economy.
Second, we need real support for those in work on low and middle incomes who will struggle as prices rise.
The Chancellor can start by introducing the Real Living Wage and reversing those cuts to low and middle earners through Universal Credit.
Third, we need secure and properly funded public services.
The NHS is at breaking point with a £2.5bn deficit and social care in crisis with one million people not receiving the care they need.
The same applies to local authority funding, cut every year under the Tories.
The challenges our country faces are pressing.
What we need is a government that is truly ambitious for Britain. Not more cuts and half measures.
Unfortunately, the Prime Minister’s commitments today, on infrastructure and R&D, fail to recognise the gravity of the government’s economic failure and betray a lack of ambition for our country.
But as well as a critique of what’s wrong Labour is also setting out the path to a better alternative.
That’s about good intervention. In fact, it’s intervention for the common good.
Help not only for business,
but for workers,
for young people,
for Britain as a whole.
Government supporting business and giving you the tools you need to improve the wellbeing and prosperity of our country and its people.
And I see we have plenty of common ground with the CBI.
In your submission for the Autumn Statement you called on the Government to “invest for the future, prioritising measures that boost productivity and increase life chances across all regions and nations.”
We couldn’t agree more.
So I want to set out the framework for a new settlement with business.
First and foremost, a Labour government will prioritise investing in our economy.
To support investment-led growth Labour will put a National Investment Bank at the centre of our plan to rebuild and transform Britain.
Our National Investment Bank will deliver long term strategic investment in our under-powered infrastructure and provide the patient finance that our businesses need across the country.
Who can be content with seeing the US and Germany investing in cutting edge and green technologies while Britain lags behind?
So we agree with the CBI in your call for this Government to get going on major infrastructure projects.
As well as delivering HS2, we desperately need to improve links from East to West across the North.
And we cannot stand by while a shortage of affordable housing leads to suffering and insecurity and for so many people.
Housebuilding has dropped to its lowest level since the 1920s.
So Labour would fund a dramatic increase in the number of affordable homes to rent and buy.
Our country’s history is based on individual ingenuity and collective endeavour.
But Britain now spends less on research as a share of national income than France, Germany, the US and China.
The next Labour government will support innovation by aiming to meet the OECD target of three percent of GDP a year on all research and development a move the CBI also backs.
Last Thursday I visited Airbus in Stevenage, a site at the cutting edge of the design and manufacture of advanced satellites and telecoms systems, building the Exo Mars Rover and the Rosetta Space Probe.
But they’re also investing in Britain’s future by increasing the number of apprentices and doubling the number of graduates they have taken on this year.
Britain is a country rich in talent and potential.
We know that recruiting talented people with the right skills is a priority for businesses.
That’s why we’ve committed to a comprehensive National Education Service at the heart of our programme for government to deliver high quality education for all throughout our lives.
I would argue that this common ground between us on infrastructure , investing in people and skills, R&D and housebuilding are all examples of common-good intervention.
Of course, businesses will need to contribute.
It will mean some increase in corporation tax while maintaining one of the lowest rates in the world.
But see it as a sound investment not only in your own business’s long-term future but for the common good of the country.
The Prime Minister’s suggestion that Britain should chase after Donald Trump, in a race to the bottom in corporation tax , to fifteen percent or below, is reckless short-term grandstanding.
That would do nothing to bolster the long-term investment we all need or to raise productivity or boost innovation, and would undermine the rebuilding of our economy on which our prosperity depends.
And we need to see genuine employee representation at board level , which the Prime Minister promised, but I see is already backing away from. As well as real accountability for runaway executive pay and we want to engage with you as we bring forward the detail of our proposals.
Labour’s common-good intervention will see us make the case for Britain to retain full access to the single market and a stake in the European Investment Bank to support jobs, living standards and prosperity.
And we back your call for a fair migration system that allows you to continue to employ skilled workers from overseas.
We won’t set false immigration targets, unlike the Tories, or refuse to guarantee the right to stay for EU nationals currently working in Britain.
But we will take action to prevent undercutting of workers’ pay and conditions and insist that employers invest in boosting the quality of skills, training and apprenticeships at home.
Good employers are also undercut by those who piggyback on others’ investment or try to steal a march in a race to the bottom of low skills, low productivity and low pay.
Far from being alternatives economic prosperity and social justice are two sides of the same coin.
We can and must have both.
The progressive policies of previous Labour governments helped civilise, industrialise, educate and deliver increased and shared prosperity.
Government doing what all good businesses do.
Taking the long view and adapting to change.
For too long there was a damaging consensus that government just needed to get out of the way for business to flourish.
That consensus has now broken down.
The CBI rightly identifies that we need more investment in skills. Government needs to reverse the cuts in further education and support business to deliver high quality apprenticeships.
And I hope in the Autumn Statement we will see two more things, the reversal of what would be the largest real terms cut in the schools budget since the 1970s and the funding for the government’s nurseries pledge.
And now more than ever, we need government comprehensively to raise its game on the challenge of Brexit. Its shambolic handling to date has fuelled economic uncertainty and is hampering business planning.
In 1963, Harold Wilson famously said if the country was to prosper a ‘New Britain’ would need to be forged in the white heat of a scientific revolution.
More than 50 years later, we now face the task of creating a New Britain, not just out of Brexit and a new relationship with Europe, but from the challenge of the fourth industrial revolution.
We know the first industrial revolution saw mechanized production powered by steam.
The second was powered by electricity.
While the third was driven by the internet and digital communication.
The fourth industrial revolution is being powered by the internet of things and big data to develop cyber physical systems and smart factories.
I might add that this Industry ‘four point zero’ (4.0) was pioneered by the German Government’s high-tech strategy.
How we best respond to Brexit and the Fourth Industrial Revolution will require radical thinking.
It will challenge yesterday’s received wisdom of private good, public bad.
It will need common-good intervention.
We certainly won’t be telling you how to run your organisations.
Though someone did point out to me that over the last two years Labour has more than doubled its membership, paid off £20m of loans and returned to profit!
We won’t stand back when there is injustice in the workplace or the boardroom, as we saw with Sports Direct and BHS.
All we ask is that for the investment we make for you,
from building better infrastructure,
to delivering a high-skill workforce,
that you make your contribution to help the next generation of workers, the next entrepreneur, or the next business coming down the road.
And in return we’ll clamp down on the people cheating our economy with aggressive tax avoidance and evasion by doubling the number of investigators to chase payment and ending the payment of excessive dividends to offshore owners.
Aggressive tax avoidance and evasion is a burden and deadweight on us all and we will work at home and internationally to bring it to an end.
If we believe in building a fairer and more equal economy , the indicators of whether Britain is doing well, shouldn’t just be economic growth, interest rates and inflation.
The measure of a successful economy must take into account how our policies and businesses are helping tackle poverty, inequality and low pay and how they increase productivity and protect the planet.
Labour’s offer is to work together with business to deliver prosperity for the whole country.
We want everyone, and every community, to share in that prosperity.
Under a Labour government, there’ll be no more exploitative zero hours contracts – we’ll put an end to them.
There’ll be no more poverty pay for those in work.
We’ll raise the minimum wage to £10 an hour by 2020.
And we’ll make sure businesses, including small businesses, are supported to deliver those goals in a sustainable way.
The challenge of Brexit and cutting edge technology, especially from the Gig Economy, throws up both problems and opportunities.
Which is why I invite all of you here, along with businesses across the UK, to get involved and engaged in helping us shape Britain’s future.
We want you to feed into Labour’s Industrial Strategy review , led by Labour’s Shadow Business Secretary, Clive Lewis, to design an industrial strategy that meets the needs of 21st century Britain.
That isn’t about the old straw man of “picking winners” or pouring good money after bad into white-elephants.
Instead we will set the missions, put in place the right institutional framework and support, and provide businesses with the opportunities to develop our economy.
Provided of course, that businesses live up to their side of the deal – on wages, on workers’ rights, on paying taxes.
We want our relationship with business to be a partnership.
Labour’s new settlement for Business.
And in case there was any doubt at all. Labour has an open door for employers, innovators and investors and we welcome your ideas and your advice.
To ensure that prosperity is spread across the country, it’s vital that the devolution of powers and funding must be delivered closer to businesses and the people that work for them.
The North-South divide in income, jobs and pay is widening faster than ever.
Last year, when jobs increased by 277,000 in London, they rose by only 1,000 in the North West and fell by 40,000 in the North East.
Britain now has the most extreme regional inequalities of any country in Western Europe.
Labour pioneered devolution in Government.
We devolved power to Scotland, Wales and Northern Ireland.
We set up Regional Development Agencies across England. We developed the Northern Way concept to improve infrastructure, trade and local government across the North.
The Conservatives scrapped the RDAs and Northern Way, only to bring them back as the weaker Local Enterprise Partnerships and the Northern Powerhouse.
But if we’re to get sustainable growth in a post Brexit Britain it’s vital that we maximise these collaborative partnerships.
For example, Hull, a city devastated by the loss of the fishing industry has once more turned to the sea to find its future.
The Labour council, its MPs and government, worked with Siemens to invest £160m in Greenport Hull to build wind turbine blades to power the renewable energy revolution taking place off our coast creating 1,000 jobs.
That’s why Labour’s proposal for a National Investment Bank will be supported by a network of regional banks publicly accountable and locally managed with specialist knowledge of their areas.
These regional banks will help break the logjam in the British financial system that has starved small and medium-sized enterprises of the lending they need to flourish.
Labour will be on the side of the innovators, entrepreneurs and investors that our economy and our workforce need. We will use public intervention to unleash the creativity and potential of entrepreneurial Britain.
Labour is open.
We’re open to change.
Open to new ideas.
And open to working with you.
In return, we ask you to be open, to listening to the workforce, in the boardroom as well as the shopfloor.
Open to investing in Britain, and paying a bit more corporation tax to make this country more productive and fairer, so that you’ll get a return on your investment.
And open to working with us.
Together, I am confident we can rebuild and transform Britain for the common good.
To create a fairer, prosperous and more sustainable country for all.