Grangemouth closure and ‘bruised’ business confidence

With tensions between government and business, and with borrowing costs continuing to rise while the pound falls, the prime minister’s speech on AI is intended to show there is a shorter-term strategy as well as a long-term one.

But as the week starts, the CBI employers organisation is putting pressure on MPs ahead of a vital stage in legislation for labour market reforms. It wants, at least, to slow down reforms being demanded by trade unions, saying they’ll cost a lot more to implement.

Its president, Rupert Soames, former chief executive of Aggreko and Serco, says that trying to fill a hole in this year’s Westminster budget has created another hole – “in the confidence and trust that business has in government”.

He told the BBC’s Today programme that confidence is not gone but is “bruised”, adding: “We think the National Insurance increase is going to feed through into inflation, and that’s not good news.

“We’re going to have lower growth – not good news. But also because of things like the Employee Rights Bill coming along, you’re going to find people laying people off and less likely to employ people.”

Such employer organisations warned Labour ministers that their minimum wage would lead to fewer jobs – warnings that turned out to be wrong.

But after only half a year and with a huge Commons majority, the government is not in as strong a place as it might have expected.

The tension, if not contradiction, between its budget tax choices and its drive for growth brings a reminder that it can’t achieve its goals without business, and without business confidence.