August 2015 Quarterly Dinner

Date: 18 Aug 2015

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Outgoing CBI Director General delivers ‘valedictory’ speech in Milton Keynes

Introducing re-booted A Levels in hairdressing, scrapping GCSEs, banning the term SME and redefining mid-size companies in Milton Keynes as part of a British ‘Mittelstand’ are on the still-to-do list for the outgoing Director General of the CBI John Cridland CBE.

Mr Cridland, who steps down this year, addressed members of Milton Keynes Business Leaders Partnership at their quarterly dinner, sponsored by The Open University.

Top of his list remains bridging the UK skills gap, which he said is one of the biggest challenges facing the economy.

“The other elephant in the room for my successor (Carolyn Fairbairn) is the EU. Business is not unanimously in favour of Europe, but the majority would probably wish to stay in a reformed Europe,” he said.

Mr Cridland began by explaining what his role championing British business over the past five years actually involved - and was best done by examining what he did that week. “On Monday I announced the latest CBI growth forecast – up from 2.5 per cent to 2.8 per cent next year. But most journalists thought the falls in the Chinese stock market more important than entrepreneurs in the UK and Milton Keynes doing very well. 

“I said I couldn’t comment on the stock market because I am here to talk about the real world, and I was also asked about ‘Corbynomics’ - which I had to look up on Google!”

On the Wednesday he tried again, with his ‘cunning plan’ to build a British Mittelstand – based on the German model of a bedrock of medium-sized businesses. “I have been banging on about this for five years,” adding that he hated ‘with a vengeance’ the term SME (Small and Medium-size Enterprise) which lumped together a wide range of businesses.

“I am passionate about small businesses, which do need a strategy. But it is not the same strategy as that for a medium size business with a £20 - 40 million turnover. We have focused on start-ups but not on businesses which reach a larger scale. Then we stop supporting them just at the point when they need a different kind of nurturing.

“The City doesn’t support them enough yet they are the principle dynamo of growth. They grow more jobs than the small and the large companies and there are around 6,000 UK ‘Mittelstand’ companies, with a good number here in Milton Keynes.

Mr Cridland spoke of his continuing passion for promoting the role education can play in meeting the skills challenge, and he spoke of the many who fell through the cracks in the education system. He met unemployed young people who had dropped out of school, couldn’t get apprenticeships or work experience and had applied for jobs but didn’t even get a reply.

“They are fabulous young people but have been failed by the system,” he said, repeating his call for GCSEs to be abolished, scrapping exams at 16 ‘so young people could enjoy their teenage years’, and the creation of high quality vocational A Levels.

“Most employers still regard them as the gold standard. So let’s have re-booted A Levels in hairdressing, in engineering and leisure management,” he said, urging greater collaboration between FE colleges, schools and the higher education sector.”

Equipping the workers of the future was the highest priority. “We ask teachers to do miracles and many of them do, but business can help by getting more involved in schools, even at primary level,” he said. “I toured a Glasgow factory where workers end their shift by visiting a local school and sitting down with a five-year-old to help them read. Businesses should be getting into those primary schools.”

He said it is difficult to predict what jobs in 30 years might look like. “We have notions of ‘knowledge’ workers, a concept of more high skilled roles and fewer low skilled ones. It won’t matter where people live and there could be ‘virtual’ workplaces. We could be working for Chinese capitalism, on the far side of the globe – we may end up not working at all. It will be a very different world.”

In closing he said: “We have a soundly based, growing economy and the best economic opportunity we have had for 20 years. We are well positioned compared to most of our international competitors. Our major problem is a skills shortage.

“We have the most ‘streetwise’ generation of young people we are ever going to have. The world has changed and they can access information in a way I never could. As I come to the end of my five years at the CBI I am left with a sense that despite everybody’s best efforts, including those in education as well as entrepreneurs, we haven’t satisfactorily bridged the gap between business and this generation of young people.”

Lucian Hudson, Director of Communications at The Open University thanked John Cridland for a stimulating and inspiring speech ‘with its big message on education and skills’, and for his leadership of the CBI.

Afterwards Dr Philip Smith, chairman of MK Business Leaders said he had expected a direct, stimulating commentary from John Cridland, and he was not disappointed.

“MK Business Leaders has for a long time been lobbying and talking to partners about the vital issue of education and skills and building links between business and the HE/FE and school sectors. To hear someone of John’s calibre and authority confirming his concerns about this key area is very encouraging to us,” he said.