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UK faces rising competition for investment, says CBI Vince Cable to call for corporate rethink at CBI forum
(about 2 hours later)
The UK is facing rising global competition for business investment, and will need to work hard to maintain its position, the CBI has warned. Business Secretary Vince Cable is to call for a comprehensive rethink about how UK companies are run and how they should be bought and sold in future.
The business group, which starts its annual conference on Monday, said the UK needed to cut regulation, and reduce both business and personal taxation. He will ask the CBI conference how corporate governance should be reformed without discouraging investment.
It added that the planning system and infrastructure also needed improving. Mr Cable will also question the process for the acquisition of other companies.
Meanwhile, the CBI has warned that the UK will need to work hard to maintain its position against rising global competition for business investment.
Short-term goals
In a speech to the Lib Dems last month, Mr Cable spoke of the "murky world of corporate behaviour" which "takes no prisoners and kills competition where it can".
The business secretary will now ask whether shareholders in one company should be consulted before their board buys another company - a reference to the fact that many Kraft shareholders did not want to buy Cadbury earlier this year.
Another of the 17 questions he will pose is whether British boards too are focused on short-term goals and whether shareholders should rein in company bosses more, especially when it comes to pay.
Mr Cable will also tell the CBI that the best solutions are those which are owned and driven by market participants - especially investors and companies.
The business group, which starts its annual conference in London on Monday, said the UK needed to cut regulation, and reduce both business and personal taxation. It added that the planning system and infrastructure also needed improving.
The CBI interviewed 121 bosses of the biggest UK firms and large overseas companies operating in Britain.The CBI interviewed 121 bosses of the biggest UK firms and large overseas companies operating in Britain.
'Much to do'
The survey, which was co-produced by accountancy group Deloitte, said the UK scored highly for its economic stability.The survey, which was co-produced by accountancy group Deloitte, said the UK scored highly for its economic stability.
Yet respondents said the US, Canada, China and India were now seen as more attractive countries in which to invest.Yet respondents said the US, Canada, China and India were now seen as more attractive countries in which to invest.
'Much to do'
Richard Lambert, CBI director general, said: "Having acted fast to tackle the deficit, the government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy.Richard Lambert, CBI director general, said: "Having acted fast to tackle the deficit, the government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy.
"The coalition's efforts to improve the general business climate are viewed favourably, but there is much to do to improve the UK's competitiveness as a destination for investment.""The coalition's efforts to improve the general business climate are viewed favourably, but there is much to do to improve the UK's competitiveness as a destination for investment."
The CBI said that while the UK still performed favourably, it had "lost ground over the past 10 years".The CBI said that while the UK still performed favourably, it had "lost ground over the past 10 years".
It added that while the UK still performed strongly in areas such as good labour relations and flexible working practices, these issues were now seen as less important for firms making investment decisions.It added that while the UK still performed strongly in areas such as good labour relations and flexible working practices, these issues were now seen as less important for firms making investment decisions.
Regarding sectors of the economy, the CBI said manufacturing companies were the least likely to invest in the UK, while financial firms and others in the service sector were more likely than average to view the UK in a favourable light.Regarding sectors of the economy, the CBI said manufacturing companies were the least likely to invest in the UK, while financial firms and others in the service sector were more likely than average to view the UK in a favourable light.
'Great challenges'
John Connolly, chief executive and senior partner of Deloitte, said: "If the UK economy is to continue its recovery, then growth and jobs will have to come from the private sector.John Connolly, chief executive and senior partner of Deloitte, said: "If the UK economy is to continue its recovery, then growth and jobs will have to come from the private sector.
"One of the great challenges for policymakers is to provide the right conditions for companies to grow.""One of the great challenges for policymakers is to provide the right conditions for companies to grow."
Business Secretary Vince Cable said he welcomed the fact the majority of bosses surveyed by the CBI said they expected the coalition government to improve the climate for businesses. Mr Cable said he welcomed the fact the majority of bosses surveyed by the CBI said they expected the coalition government to improve the climate for businesses.
He said: "We want to provide an environment where businesses are confident to invest in the UK and today the prime minister and I will be talking to the CBI and setting out the government's strategy for growth.He said: "We want to provide an environment where businesses are confident to invest in the UK and today the prime minister and I will be talking to the CBI and setting out the government's strategy for growth.
"We believe that to do this you have to get the fundamentals right so we will be looking across the whole range of economic policy - from tax to regulation, skills to science, infrastructure to competition policy, bank lending to trade - to make it easier for businesses to flourish.""We believe that to do this you have to get the fundamentals right so we will be looking across the whole range of economic policy - from tax to regulation, skills to science, infrastructure to competition policy, bank lending to trade - to make it easier for businesses to flourish."