The Confederation of British Industry (CBI), the equivalent of the trade union of businesses, is holding its annual conference today. That’s why our airwaves should be full of the somewhat depressing sight of multimillionaire chief executives demanding further tax cuts and deregulation, threatening that the crops will fail if politicians do not meet their demands. Occasionally, an old-fashioned family businessman/woman will pop up and say something reasonable, but it doesn’t happen anywhere near as often as it should.
However, there are two interesting topics that are dominating the CBI conference this year: Britain’s membership of the EU and the Living Wage.
There is a near-consensus amongst employers in favour of continued membership of the EU. I’m not surprised at all: if I were a businessman, I’d want to be in what will become the largest and richest trading bloc in the world when the US-EU free trade agreement becomes reality. The downside to employers is that the EU has this irritating habit of trying to regulate things, but it’s nothing that lobbying EU commissioners (public health regulations) or the British parliament (the Working Time Directive opt-out) can’t solve. I’ve no doubt that the support of business would be very influential in any referendum campaign on Europe.
However, I was pleasantly surprised by the CBI’s reaction to something else. The Labour Party has just launched a proposal whereby any employer which raises wages from the legal minimum to the Living Wage (within the first year of a Labour government) would be able to claim back a third of the cost of the pay rises in tax credits. In other words, the state will temporarily subsidise employers’ transition to paying a fair wage.
I thought that this is too weak: paying a liveable income to full-time workers is an ethical obligation, not a choice, and the law should reflect that. My view hasn’t changed. Nevertheless, the CBI has given a ‘cautious’ welcome to the proposal, saying that although it merely delays an increase in wage costs, it does make the transition for employers who want to change easier to manage. I’m not sure how many employers are likely to take up Labour’s offer, but there will be millions of workers, many working for highly profitable large businesses, who will continue to work for as little as 68% of the Living Wage.
The CBI’s goodwill is commendable, but words and actions are remarkably different creatures, as we well know.
