Amid the steady grey Birmingham drizzle, Britain’s leading business lobby group tried to walk a careful path on immigration.
Members of the Confederation of British Industry (CBI), present in greater numbers than in recent years at its annual conference, have been clamouring for more flexibility on hiring foreign workers, as a tight labour market wreaks havoc on their businesses and drives up wages.
The chaos that is visa processing at the Home Office is one of the biggest problems the country faces, the chief executive of a mid-sized manufacturing company said.
“The Home Office costs my company and the country ridiculous sums in lost opportunities every damn day,” he said. “I hope Tony [Danker, director general of the CBI] gives the government both barrels on that.”
He was disappointed on this count, but perhaps not surprised. The CBI has had a bruising relationship with the government in recent years, in particular around Brexit, and is anxious to remain on side.
After Boris Johnson reportedly said “fuck business” in 2018 in response to dire warnings about the commercial impact of a hard Brexit, it was clear that business groups, a traditionally preferred constituency for Conservative governments, were out of favour.
Markedly few top Brexit deal wishes – such as a more moderate approach on shared regulation around product standards or mutual recognition of qualifications – were won by business lobby groups.
The CBI was quick to welcome aspects of Kwasi Kwarteng’s disastrous mini-budget in September, and now shares the collective burden of UK plc’s attempt to win back its reputation for competence on the global stage.
But it also finds itself trying to be diplomatic about Brexit and immigration amid signs of a break in the omertà on discussing those toxic topics.
Simon Wolfson, the chief executive of clothing retailer Next, spoke for many Brexiters in the business and political community when he said earlier this month that this is “not the Brexit I wanted”.
While in the run-up to the 2016 vote and 2020 EU trade agreement the Bank of England and thinktanks talked about risks, cliff edges and abstract potential outcomes, now, in the face of hard data, they have a newfound confidence.
UK GDP is lagging behind other leading developed economies and will not reach its pre-Covid level until mid-2024. That’s well behind the pandemic recovery of some leading European economies.
“It’s not [an impact] we’ve been surprised by,” said Andrew Bailey, governor of the Bank, last week. “As a public official I’m neutral on Brexit per se, but I’m not neutral in saying these are what we think are the most likely economic effects of it.”
Paul Johnson, head of influential thinktank the Institute for Fiscal Studies, went even further in the aftermath of Jeremy Hunt’s autumn statement.
“Very clearly Brexit was an economic own goal,” he said last week. “Economically speaking that has been very bad news indeed.”
For now, though, the CBI still seems to be seeking out a middle road.
“I say to Brexiters, the best guarantor of Brexit is an economy that grows. Its biggest risk is one that doesn’t,” said Danker.
Immigration, he added, was “the only thing that’s increased the potential growth of our economy since March”.
It’s not hard to see why the CBI is trying to sit on the fence under its newish leadership. It still bears the scars of losing influence, due to what some in Whitehall found to be an extreme and unrealistic response to Brexit issues from its former director, Dame Carolyn Fairbairn.
Still, while the prime minister, Rishi Sunak, acknowledged that attracting talent from overseas is one of the chief challenges that business leaders come to him with, he said he found the issue of illegal immigration was more pressing.
His government would first have to “rebuild public consent” before meeting the needs of businesses.
A system “that allows businesses to access the best and brightest from around the world” is predicated on giving the British people “trust and confidence that the system works”.
“That means tackling illegal migration,” Sunak said.
This did not sit well with some business leaders present. “It’s not chicken and egg,” one head of another manufacturing company said. “Both things need sorting, and they need sorting now.”
There was a sense of disappointment with Sunak’s speech among some business leaders in the room as they formed disorderly queues for shepherd’s pie. The style – a “grown-up tone” and sense of looking to the future – was welcome, one senior figure in a financial services firm said.
“But there was no substance. Nothing meaningful on talent, which is the primary issue our clients raise,” they added. “Why not just be honest and say we need a Brexit that’s tailored to the services-heavy economy we have?”
“It’s like they want to start a fresh consultation, as though they think they’ve just won an election and they’ve got five years,” a public affairs lead at a listed company said. “They haven’t. Businesses have repeatedly identified problems – from planning to immigration, skilled and unskilled. Go and fix them.”
At least for the CBI there is now a prime minister who, at the very least, talks the talk on being pro-business. Sunak told the conference he was “unequivocal” that the Conservatives are the party of business.
Still, after a disastrous mini-budget, and amid growing frustration among business-minded Brexiters, the Conservatives face an uphill battle to win back trust from the captains of industry.
There’s an increasing sense, at least among some junior government ministers, that this is a job – winning back bosses’ goodwill – which needs greater priority.
And once the recession starts to bite, the power balance may yet tip in the lobbyists’ favour once more.
