Although I have always attended the CBI Annual Dinner, this London specific version was a new event for me – but definitely worth the time and money spent. As well as the obvious networking opportunities and the chance for Mike and I to talk to people about challenges in the interim management market, the surprise speaker of Lord Mandelson of Foy (and former Prince of Darkness) made me very skeptical. But I must admit, he talked a good deal of sense on Europe, the economy and growth – and surprised me and other attendees about his frankness and apolitical stance. Main areas covered included:
What Lord Mandelson Spoke About
Don’t go Changing
At the start of a far ranging speech, Lord Mandelson warned that the Eurozone crisis and the problems in Cyprus were far from over – but in an astonishingly unbiased manner (given his previous political allegiances), he said he believed that the UK economy is moving in the right direction and warned not to reverse on the current policy. Although Merkel & co. were having a hard time of it, cutting harder and faster is exactly what is needed – (and I completely agree).
Now while it is painful to implement efficiencies, the quest for growth is eternal. Aside from cuts, Lord Mandelson drew on the need for more energy to stimulate growth. But it is not growth vs. reform at the expense of structural reform. Absolutely not. Gaining growth is absolutely essential, but the focus must be on reform - short term stimulus alone won’t work – as Mr Osborne is clearly learning given his budget speech this week. Reform is not the enemy of growth.
Lord Mandelson said he believed that in Britain, the key to recovery is speed of deficit reduction. As costs are increasing and the way back to be being in the black looks long, costly and painful, more than stimulus is needed. In short, our economic problems need a complete reinvention of our economy rather than a back and forth redistribution of pay. But, as he went on to point out, this kind of major economic re-creation needs candour and co operation from both sides of political divide – something that I think seems unlikely.
Don’t Look Back
If we want to become a more socially progressive economy and move forward, we must stop looking back, Lord Mandelson intimated. Traditionally Britain has relied upon Financial Services and the City, but the plain fact is that FS has fallen back and we must look to new and emerging markets in order to succeed.
Beyond our Borders
It is a fine balancing act for government to enter new markets, engender new skills and services, whilst acknowledging a lack of funding and debt, but “how do we expand the cake, not just divide it?” Lord Mandelson asked. The answer is that we must exploit opportunities of a fast growing world. Burgeoning economic areas like the BRIC economies force us to look beyond Europe. They are looking at high growth - but we are not capturing this, despite reduction in value of sterling. Therefore we must look at Europe again, not as a sick man, but as a life sustaining partner to the UK. Don’t ignore Europe - it is a rich seam, with privileged access. Reform the EU and its regulations, yes and make it more effective and accountable - definitely. But don’t leave it. Not a surprising statement from Lord Mandelson, but true nonetheless.
In all it was a passionate and energetic speech from a man who has a very clear idea about how we can get Great Britain back to growth again – and for once I am in complete agreement with him. But we need a global role for Britain in a new Europe. Recalibration and reform are crucial – and in the meanwhile if Lord Mandelson is looking for a way to contribute, we have several interim board level roles that could really do with his expertise!