‘Hope, confidence and optimism’ can help accelerate UK growth says CBI boss

“I think business leaders are natural optimists,” she says. “And CEOs have a huge role to play in building hope and confidence and getting others excited about the opportunities ahead.”

Harnessing that optimism to challenge perceived risks and obstacles will be key to driving increased growth across the economy.

“The vast majority of growth in our economy is going to come from the private sector. It's going to come from business leaders making the decision to invest in the UK, to create jobs. It’s going to be decisions taken in boardrooms saying ‘yes, I am going to take a risk on that opportunity, I'm going to invest’.”

Critically, Newton-Smith is clear this is not about CEOs ignoring risk – or just talking up their business – but taking more educated risks. 

Reasons to be optimistic

Newton-Smith says her role, and that of the CBI is to “set out why the UK is a great place to invest and grow a business”.

Among the reasons for UK business leaders to feel confident about the future are the UK’s universities and the world-leading innovation and talent they produce, says Newton-Smith. 

Newton-Smith also notes that while leaving the EU has created “some huge challenges” for UK business, one upside is a boost to the UK’s ability to compete in emerging technologies. “We can be more agile in terms of regulation and nurturing innovation.”

However, Newton-Smith believes current attempts to rebuild a stronger relationship with the EU will provide a further boost to UK businesses. She also cites the UK’s ability to navigate potentially tricky trading relationship with the US, China and the EU as a solid foundation for growth—including the UK’s relatively strong position on US tariffs, compared to other countries.

“The UK’s overall economic strategy is we are going to engage, we are going to engage with the world, we're going to engage with big economic players, but we're always going to think about the UK's interest, and I think internationally the Government has navigated that really well.”

Creating a business environment for growth

Domestically, it is critical the Government works with businesses to create the conditions that encourage risk-taking and drive growth, says Newton-Smith.

But ambition must be matched by delivery. “We want to be that voice of business that helps the UK Government set out not just a plan for growth, but to really deliver that,” she says. “Thinking about the areas where government and business can work together to overcome challenges and create prosperity.”

A consistent message she hears is that businesses want to see more policies and more decisions taken that make it easy for them to invest and grow in the UK. “The Government’s Industrial Strategy is part of that, setting out the sectors we really want to be famous for, but what we want to make sure is that we don’t see government policies on the one hand trying to create opportunities while on the other feeling like they’re holding back ambition.”

Positive steps would include accelerating major investment programmes in schools, hospitals, roads, transport, and energy infrastructure. Newton-Smith says the Government increasing capital expenditure on such projects is welcome, but businesses are yet to feel the benefit.

While issues such as tax and the cost of energy and employment are also challenges for business, Newton-Smith says the need among businesses isn’t just about reducing tax and operating costs, but also ensuring speculation is kept to a minimum and businesses have clear sight of future changes to the tax and investment landscape.

“In the UK, there’s been so much speculation about what might happen, and that has held back some of the decisions businesses want to make,” she says.

Newton-Smith says businesses would also like to see “proportionate regulation”. Again, this is not about less regulation, per se, but rather ensuring “regulation creates a level playing field and is proportionate to the outcomes we want to achieve and helps make the UK economy more competitive.”

If the Government and businesses can strike the right balance, Newton-Smith is confident projections of slow growth can quickly accelerate.

“In our economic forecast we expect growth to be 1.3% this year and 1.5% the year after. But I think we all need to be more ambitious for our country,” she says. “We want to see growth pick up from that level. We want to see stronger business investment driving growth, supported by government policies that create opportunities and support ambition.”