Badenoch won't say if she'd reverse NICs increase

Heather Stewart

Conservative leader Kemi Badenoch has refused to say whether she would reverse Rachel Reeves’s £25bn increase in employers’ national insurance contributions.

“What I’m not going to do is comment on every bit of micro policy,” Badenoch told business leaders at the CBI’s annual conference, where the tax-raising budget has been much discussed.

Badenoch condemned employer NICs as a “tax on jobs,” but said it was too early in her leadership to set out specific policies.

When pressed on whether she would raise the £25bn of revenue in a different way - or alternatively what public services she would cut - she replied,

“I disagree with the premise of the question. We need to stop looking at everything as if it’s just a ledger, where it’s taxes raised and services delivered.”

She went on to pose the question of whether the planned football regulator is necessary, before adding that she didn’t want to talk about, adjusting “little knobs or levers”.

Badenoch had earlier told business leaders she wants to “rewire the economy,” and accused Labour of what she called an “unprecedented raid on business”.

“Capitalism is not a dirty word,” Conservative leader Kemi Badenoch insists.

Nor is “wealth” or “profit”, she adds, but there is a need to explain how these things deliver for the people.

Otherwise, Badenoch warns top business leaders at the CBI, people will think that business leaders are just in it for themselves, with the politicians “in cahoots” with them.

She says:

People who think business is all about greedy fat cats, rather than people who are working hard, entrepreneurs, and those who are making life better for all of us.

Badenoch then turns to her party’s principles,

One is “free and fair competition”. Not monopolies, rent-seeking or corporatism, but “genuine competition” where new entrants can come in, and failing competitors change or leave the economy, she explains.

A second is to represent all businesses, big and small. The burden on those small businesses are increasing, Badenoch warns.

She then says that the burden of regulations, and higher national insurance rates, end up falling on the public, as:

It is everyday people who bear the brunt, either in higher prices or lower wages, sometimes both.

It was obvious that the Conservative government had “lost the confidence of business”, Kemi Badenoch continues.

She says she wasn’t surprised that so many business leaders attended Labour’s “prawn cocktail, or smoked salmon” offensive last year.

That’s because businesses thought the Conservative’s didn’t understand their concerns, and that “we were going to lose”, she tells the CBI’s annual conference.

Badenoch says she has been keen to appoint MPs with actual business experience into the key business-facing roles in her shadow cabinet.

Shadow chancellor Mel Stride founded a successful business, which he expanded into the US, before becoming an MP, she says.

While shadow business secretary, Andrew Griffith, has “serious boardroom experience” having worked as a financial analyst and asset manager.

Back in London, Conservative leader Kemi Badenoch is starting to give a speech at the CBI’s annual conference.

You can watch it here:

Badenoch says she has spoken to many delegates at the conference about the need to deregulate.

She says she tried to protect firms from regulation when she was business secretary (until the July election).

Badenoch says:

I know it is not government that creates growth, it is business.

Government often needs to get out of the way.

This is a difficult argument to make, she adds, as people want government to solve everything.

Badenoch adds:

If you ever sound hesitant, then they will make you out to be a cruel, unfeeling person, as I have discovered to my own personal cost.

This, she then claims is why the UK national debt is now at record levels, with the country spending more on debt servicing than on health, education or defence.

She insists:

That needs to change, we need growth.

Heather Stewart

Back in London, the CBI’s annual conference has turned to “the future of public-private partnership,” with a panel discussion sponsored by law firm Browne Jacobson.

Browne Jacobson’s banking and finance partner Paul Hill (evidently if you pay for a panel you get a seat on the stage) is arguing we need a new era of public-private partnerships to deliver the government’s plans, including on green energy.

But he argues they need a rebrand, because the last generation of PFI schemes - which the last Labour government used to rebuild schools and hospitals - have such a poor reputation (unfairly, Hill reckons).

He says:

“It really is a toxic subject, and it’s quite interesting when you think that through.

Hill explains:

“The PFI delivered the longest sustained period of investment in public infrastructure in decades”.

He adds:

“If there’s one thing that’s clear is that any future model cannot have any of the words [in] ‘PFI’ in it”.

Jurgen Maier, the former Siemens boss now chair of GB Energy, says he’s optimistic about the prospects for attracting private investment into green energy projects, but, “we need to find some different language: I’m starting to talk about ‘private finance playbooks’”.

BoE's Dhingra: Trump tariffs could be deflationary

Richard Partington

Donald Trump imposing massive tariffs on China could drive down global goods price, leading to lower inflation elsewhere around the world including in Britain, a senior Bank of England policymaker has said.

Swati Dhingra, an external member of the Bank’s rate-setting monetary policy committee, said a second Trump presidency imposing a 60% tariff on Chinese goods sold in the US could lead Chinese exporters to cut their prices to ensure they maintained current trade volumes.

Dhingra said:

“It takes a massive amount of demand out of the world market. The way exporters, say in China, would respond to that would be to respond with prices, world prices, as they don’t want to lose market share.”

Speaking at a conference in London on Monday, she said there was uncertainty about what policy the president-elect would carry through from his campaign. Trump had warned before the election earlier this month that he would slap tariffs of up to 60% on Chinese goods and up to 20% on other US trade partners.

A leading expert in global trade, Dhingra said a tariff of up to 60% would have a disinflationary impact for the world economy.

“If there is the kind of big 60% type of tariff increase that’s been proposed, that will have repercussions on to world price and mostly on the downward direction,” she said.

However, if there was a broader “tit-for-tat” trade war where other countries imposed retaliatory tariffs on the US “then we’re in a completely different situation”.

Drawing a comparison with Brexit, Dhingra said Britain leaving the EU had “permanently” raised the price of products in the UK for households. This had a short-term inflation impact, but this had faded as prices stabilised at a higher plateau.

She explained:

“We saw much higher price increases in the UK compared to everywhere else and those pressures have now come off much more quickly as well for the reason they’re not inflationary, they change the price levels, permanently.”