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British business assesses future leaders

BBC News


By Jorn Madslien 
Business reporter, BBC News, CBI conference

Nothing pulls British businesspeople closer together than adversity.


David Cameron addressing the CBI conference
 They’re throwing money at us now to pay back later 
David Cameron, leader of the opposition

No surprise, therefore, that this year’s scaled-down CBI conference was buzzing with energy.

“Now is the time for agility and determination,” declared Paul Walsh, chief executive, Diageo, with Royal Dutch Shell’s chief Jeroen van der Veer chipping in: “When times are easy, anyone can succeed.”

“You’ll need to make sure you get out of this situation stronger than the competition

As the united business community was preparing the fight-back against a recession that is quickly gathering momentum, they were looking for a sense of direction.

Two of the most senior politicians in the land were standing at the ready to take the lead.

First up was Prime Minister Gordon Brown, flippantly down-playing his actual power by insisting he was “in a difficult position this morning. I am not the Chancellor.”

Mr Brown was closely followed by the leader of the opposition Conservative party, David Cameron, who insisted that “even with all the leaks in the newspapers, I can’t react to something that hasn’t happened.”

To spend or not to spend

Both leaders spoke ahead of Monday afternoon’s pre-Budget report, which sets out to map out the path out of the economic quagmire, in what seemed to quickly turn into a pre-election beauty contest.


 I think David Cameron did a very good job in spelling out a genuinely attractive alternative 
Sir Mark Moody-Stuart, chairman, Anglo American

“If monetary policy cannot do everything it’s done in the past to keep the economy moving… then we have to ask whether we can use fiscal policies to better effect,” declared Mr Brown, ahead of a pre-Budget report that is expected to detail a sharp boost in government spending aimed at giving the economy a shot in the arm.

“To fail to act now would not only be a failure of economic policy, but a failure of leadership,” said Mr Brown.

“The best way for taxes to be low in the long-term is for us to ensure that the downturn is as limited in length and scope as possible.”

Bad plan, countered Mr Cameron, insisting that the debt-mountains built up by both the government and by consumers had grown out of control, and that the economy had become over-reliant on the housing and the financial sectors.

More borrowing to fund more spending may not be the way ahead, he said.

“I am very sceptical and very cautious about this idea of a big, fiscal stimulus package,” Mr Cameron said.

“They’re throwing money at us now to pay back later.”

Polar positions

And so the battle lines appear to have been drawn.

“For the first time in years, the two main political parties are head-to-head in their economic policy making,” observed CBI director-general Richard Lambert in the wake of the two speeches.

“This looks likely to be the grounds on which the next election will be fought.”

And just as the positions of the two leaders were polarised, so were the responses from the businesspeople at the conference.

“I think David Cameron did a very good job in spelling out a genuinely attractive alternative,” said Sir Mark Moody-Stuart, chairman of the global mining giant Anglo American, and in many ways a voice representative of views held by those who run large, international corporations.

“He put a lot of emphasis on the liquidity side.”

Risky spending cuts

Others were concerned at Mr Cameron’s reluctance to see lending now as a necessary economic tool to be paid for in instalments over a period of years.

“It’s a 20-year fix,” said one executive from the construction industry, who declined to talk on the record about “politics”.


Delegates at CBI conference

“Whilst I agree with much of what Cameron says, taking that much debt out of the economy that swiftly could cause a lot of damage to companies and to the economy,” he said.

During these difficult times, public spending on hospitals and schools, railways and power stations, should help bolster the construction industry, he continued.

“What we’re concerned about is the Conservatives coming in and cutting back spending dramatically,” he said.

“I think we’ll have to live with the debt for now.”

Grassroot engine for growth

Simon Atkins, managing director of Biz Wiz Books, meanwhile believed that much of the debate at the conference was missing the point.

“Governments only start looking at companies once they’re VAT registered, said Mr Atkins, who advices sole traders and other very small firms with turnover of less than £100,000.

“That’s where the economy really is,” he stressed, pointing to how these businesspeople are just getting on with their day-to-day operations, getting the sales to bring in money.

“A lot of the stuff mentioned [by Mr Brown and Mr Cameron at the CBI conference] is well above that,” he said.


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