Only business can create wealth and generate taxation in the current climate, said Lord Digby Jones, former Director General of the CBI and ex-Minister for Trade and Investment Promotion.
In a session aimed at revitalising small businesses at London’s World Travel Market, he said, “When we’re in the dippy-do, the only way is to trade our way out. It’s the only way to grown an economy.”
Lord Jones said many governments, journalists and citizens did not understand the role of business. “They think every small business is an Enron, owners in Rolls Royce smoking fat cigars, shouting ‘You’re fired’. But only business can create the wealth that’s needed.”
He admitted public finances had to be re-balanced, but that ‘cuts never grew anything. “The only way out of the mess is to generate taxation through business. Taxes pay for nurses, teachers and others, who pay tax themselves. Without tax, there wouldn’t be a penny in public funds.”
The importance of globalisation was also highlighted. Lord Jones said it’s “here to stay” and the UK should embrace its position as a highly globally-engaged country. “There are 1.3bn people in China, 1bn in India and 180m in Brazil, creating ever-affluent middle classes. It’s in our interests these emerging markets get richer.”
“In the end, it doesn’t matter who owns what. At last week’s Grand Prix, 80% of Formula 1 cars were UK-made and Jaguar had its best quarter ever, due to sales in China. These businesses pay corporation tax, employ British workers and manufacture here.”
However, he warned against making it harder for businesses to grow. “I expect those who earn more to a more, but don’t make the poor rich by making the rich poor. Make the rich understand how they can help mop up workers losing jobs.”
Increasing a workforce by even one person was progressive, although he condemned the UK’s lack of skilled workers. “In the UK, we have something two-thirds of the world doesn’t – full-time, free, compulsory education. Yet 48% of pupils don’t get grade C or above in English and Maths – what does that do for our productivity?”
Improved transport infrastructure and better planning was also key. “In Germany, they put up 3 high-speed rail links and 2 airports in the time it took us to have planning consultations for Terminal 5.”
