Howard Davies, the former director-general of the CBI, recently delivered a series of broadcasts on the state of British business. This is an edited version of his final talk, on links between government and industryby Howard Davies / November 20, 1995 / Leave a comment
October 6th 1995
In my first week at the Confederation of British industry (CBI), in June 1992, I received a personal letter from the then chancellor of the exchequer, Norman Lamont, still in all his ERM glory. How nice, I thought. I have finally arrived. At last I am a fully paid up member of the great and the good.
But when I read the letter I was not so sure. Because the message was that Mr Lamont did not want to see me-ever. Well, not quite. The point he made was that the government proposed-which means they had decided-to abolish the National Economic Development Council. That was the forum in which employers (represented by the CBI), unions (represented by the TUC), and the government came together to discuss the state of the economy. “Neddy,” as it was colloquially known, had survived 11 years of Thatcher government, though its deliberations gradually became more and more remote from economic decision-making. So in 1992 it was easy for the government to present it as an irrelevance-the last bastion of the corporate state and the last redoubt of tripartism. It fell without a struggle.
It was hard to argue for the continued existence of a body so redolent of the economic policy failures of the 1960s and 1970s, when government, employers and trade unions tried and failed to promote growth and control inflation through prices and incomes policies over beer and sandwiches at No. 10. There was no place for that nonsense in the bracing 1990s.
As it happens, I had a sandwich, and a beer, at No. 10 the other day. Not with the prime minister, on this occasion, but with one or two of his henchmen. We talked about pay. Top people’s pay. It occurred to me then, as I munched my cheese and Branston pickle, that much had changed in the three years since Norman Lamont’s letter.
Norman Lamont himself had gone, of course, to prowl the backbenches. More importantly, though, the relationship between the government and industry had changed. Subtly, gradually-and we are not talking about a return to the 1970s. But there is no doubt that the rigorous, minimalist non-interventionism of the late 1980s is now a thing of the past. There is a different, closer relationship between government and business. I will call it the new corporatism, although Michael Heseltine will not thank me for…