CBI Backs Burnham’s Growth, Urges State to Attract Private Capital
The Confederation of British Industry has cautiously welcomed Prime Minister Andy Burnham’s plans for a more interventionist state, emphasizing that increased public investment must attract rather than displace private capital. Rain Newton-Smith, the CBI’s chief executive, praised Burnham’s first Labour conference speech as prime minister, which outlined a vision for transforming the economy dependent on business-driven investment and innovation. “Public investment should be designed to crowd in, rather than crowd out, private capital,” Newton-Smith stated. Burnham’s speech in Liverpool highlighted plans for greater state involvement in energy infrastructure and addressing challenges like social care and youth unemployment.
A key announcement was Great British Grid, a publicly owned company under Great British Energy, aimed at investing in electricity network infrastructure and competing with private operators. The government claims this will help businesses secure faster grid connections while maintaining a goal to align UK energy costs with European counterparts within a decade. Newton-Smith said the initiative’s success hinges on accelerating connections without displacing private investment. Britain faces a major expansion of its electricity infrastructure as renewable generation grows, with Ofgem estimating £70 billion in grid investment needed between 2025 and 2031, much from private companies.
The CBI also supported Burnham’s willingness to review the state pension triple lock and social care policies, though no abolition plans have been announced. Newton-Smith called for similar ambition in tackling youth unemployment through policies that boost business confidence in hiring. She endorsed Burnham’s fiscal discipline and closer EU economic ties, along with a pragmatic North Sea approach. “The Budget now needs to provide the first downpayment on that partnership,” Newton-Smith said, urging Chancellor John Healey to ease employer cost pressures in the October 28 Budget to encourage investment and hiring. The CBI’s cautious optimism reflects improving government-business relations at Labour’s conference, though business leaders remain focused on whether the upcoming Budget will raise their tax burden.
The report points to the careful balance between public and private sector roles in economic growth, with infrastructure and fiscal policy at the center of upcoming decisions. Newton-Smith emphasized the need for the Budget to deliver concrete support for businesses, ensuring that public investment complements rather than competes with private sector efforts. Progress in energy and social care policy hinges on maintaining this collaborative approach as the government outlines its fiscal priorities for the coming year. The CBI remains committed to working with policymakers to achieve sustainable economic outcomes that benefit both workers and enterprises.
