JOHN Cridland is one of the few people who could get excited by the prospect of working next to a building site for six years. The view from his office window in London’s Centrepoint building is currently a mess of cement mixers, trucks and cranes as the Crossrail construction crews set about transforming Tottenham Court Road station into a major transport interchange by 2018.
But despite all the dust and noise the director general of the Confederation of British Industry (CBI) says it is an “inspirational” sight.
“All the economic research says spending on infrastructure is the best way to get economic growth moving,” he says, before launching into a passionate defence of his plan to kick-start the economy with investment in public works.
“The biggest part of the cuts so far have been in capital, not current, spending. Over the next few years that will rebalance because most of the capital cuts are in and most of the current cuts are still to come.”
“But businesses are frustrated with cuts in capital spending – that directly impacts on the growth rate because of what it’s done to the construction industry, as well as weakening the economic capability of the nation.”
Right now he says the government has the right policies on infrastructure but is severely lacking when it comes to implementing them on the ground: “I think the delivery is weak, things are taking too long and the impact is lost. Last Autumn Statement the chancellor said there would be £20bn of pension fund investment in Britain’s infrastructure. A year on, how much progress has been made?”
“The government gets that – appointing [former Olympics chief] Paul Deighton as infrastructure minister shows they know they need to do more.”
Cridland will be the first to admit that calls for investment in major public works is “different from what you’ve heard from the CBI before” but this befits the fact that the current director general is cut from different cloth to predecessors such as Digby Jones and Adair Turner. Unlike them, Cridland has never been active in business and instead has spent his entire 30-year career with the CBI.
But despite the lack of hands-on experience he has always been willing to fight for a pro-business environment, even when this runs against the prevailing national mood.
“I’m continuing to argue for business tax cuts at a time when people are questioning whether business is paying enough tax. I’m continuing to say that the government needs to reduce the deficit at a time when people question austerity.”
One of those “unpopular” tax cuts that Cridland backed was the reduction in the top rate of tax for those earning more than £150,000: “Personal tax affects businesses’ ability to deliver growth. The 50p personal tax rate was damaging to British industry,” he says.
He is also willing to take a stand against any attempt to reduce tax relief on pensions: “I am pretty clear that a hit on pensions tax relief for higher earners would be seriously damaging.” He says a reduction in pension tax relief is not just about “world class talent” but also middle managers on moderate salaries “who suddenly find their pensions being messed around.”
“That matters to business,” he says.
His demands from the chancellor’s Autumn Statement are priced at £1.5bn but he claims they will have a major effect on the economy. Some are classic CBI measures – a two per cent cap on business rate increases to help retailers – while others, such as a removal of stamp duty for shares traded on AIM and an increase in the annual investment allowance for small firms – are more targeted.
Despite saying his small business members want a “return to Captain Mainwaring banking” based on strong personal relationships, he is strongly opposed to suggestions that the government may force banks to split their investment banking arms from their high street operation.
“That isn’t what [the Vickers commission on banking] called for and it’s not what George Osborne has asked for, but we’ve heard some noises that we may end up there.”
“As a small business, if I choose a high-street bank and get my first export order then I don’t want to be told that I’ve suddenly got to go and build up a relationship with an investment bank to get a simple hedging product.”
One of his predecessors, Adair Turner, is second-favourite for the top job at the Bank of England. Cridland will not be drawn on his favoured candidate but says the new governor must be able to “look the chief executive of a bank in the eye and raise an eyebrow when he or she needs to. It’s got to be someone who anyone in the City or Canary Wharf would say ‘he’s a heavy hitter’.”
Cridland supports a return to what he terms the “real economy” that replaces “debt-driven consumption” with manufacturing and overseas trade, including in services. As to finance, he insists that he’d “like [the City] to employ as many people as possible but if the rebalancing of the economy means we are less dependent on growth from financial services… that probably means a shift in the labour market.”
He backs a real-terms freeze to the EU budget – “a classic area where business and government stand together” – but says there is a real fight coming up to ensure Britain retains all the benefits of the single market and is not sidelined by the 17 Eurozone member states deciding policy on their own.
Ultimately Cridland’s message is that we must get trading abroad if we want to secure Britain’s economic future: “We could easily slip away or we can get out there and sell. I’m up for the fight – I’m a glass half full sort of guy.”