CBI warning over race to devolution

RUSHING headlong into devolution could risk damaging the UK’s economic growth and undermine the internal market.

This is according to CBI director general John Cridland who is delivering the message at an Institute for Public Policy Research (IPPR) event in Manchester.

In his speech at corporate law firm Addleshaw Goddard, Mr Cridland will say businesses believe devolution to be a real opportunity, but are concerned that the speed of reform and “rushed backroom deals” could harm the economic gains.

He will also add that local bodies ought to recognise the clear quid pro quo – enhanced powers must be met by commitments to structural reform, taking tough choices on budgets and priorities in a challenging fiscal climate.

And he will spell out the business view that “devolution shouldn’t be about being different for its own sake”.

To guard against damaging ‘devo cracks’, the CBI chief will outline core criteria for ensuring more power to the regions goes hand in hand with creating economic growth.

Mr Cridland will say that businesses want to see evidence that extra powers will boost growth and jobs while minimising complexity and bureaucracy.

“Business can – and should – play a constructive role in this debate,” he will say.

“Our members are most interested in the point at which devolution comes into contact with business.

“First, they raised concerns about the speed of further devolution.

“Now here, it’s important that where promises of further devolution have already been made – be that the Smith Commission in Scotland or the devolution of Corporation Tax in Northern Ireland – that these powers are delivered in order to give businesses in the devolved nations the certainty they need.”

Mr Cridland will say clear leadership is important and will hail Manchester’s Combined Authority as a shining example of this.

“We’ve seen strong leadership through the authority,” he will say. “It has put forward a clear, evidence-based case for how specific powers could unleash Greater Manchester’s potential to drive regional growth.”

In his response to Mr Cridland’s speech, IPPR North director Cox is expected to say the business case for devolution is unequivocal.

“Devolving a coherent package of powers away from Whitehall will allow areas our cities and regions to invest in the infrastructure, housing, skills and transport connections they need to flourish,” he will say.

“It will create a business-friendly environment which means the private sector can create more and better jobs in sectors which offer security and prosperity to all areas, not just core cities.

“The main stumbling block will be a lack of ambition and commitment from the main political parties, who must spell out in their manifestos the details of a new devolution settlement and timetable for the whole of England.

“As the economy recovers, nurturing Northern prosperity will create national prosperity. Devolution in the next Parliament is a golden opportunity for that to happen.”