The questions of why the economy is growing but living standards are declining, and how we can ensure that everybody benefits from growth in the future are set to be hot topics in the run up to next year’s general election. To command the public’s trust and confidence, business must have a positive vision that answers these questions.
We know that as well as needing to get pay packets growing faster than prices again, we also have to respond to the longer-term challenge that your background still has too great an influence on your outcomes in life. That’s why the CBI has published A better off Britain, business’ blueprint for an economy where growth benefits everyone.
The CBI report argues that there is a role for business and government in delivering this vision, but business must take the lead on many of the most important changes that we need to see. There is a lot of best practice in businesses the length and breadth of the country, and more businesses can follow their example.
A better off Britain sets out immediate steps to take like embedding flexible working so that parents can better plan their work and family commitments, and a series of longer-term actions too.
Business must devote the same energy to raising productivity as they would to reducing unemployment as higher productivity is the only sustainable route to higher pay and we are 16% less productive than we would have seen had the recession not happened.
There is a role for government too, enabling workers to keep more of what firms spend on employing them, providing help with the cost of childcare and helping to create routes to the higher skills people need to get on.