Use immigration to solve worker shortages and end arguments over Brexit in a bid to boost growth, Confederation of British Industry chief Tony Danker will tell politicians on Monday.
Mr Danker, the group's director general, will use his speech at the CBI annual conference in Birmingham to praise some “incredibly welcome” announcements in last week’s autumn statement, while also warning the UK must go further to solve years of stagnating growth.
Senior politicians are expected to attend the business body's two-day conference, days after Chancellor Jeremy Hunt unveiled £25 billion of tax rises in a budget designed to restore market confidence in the UK after former prime minister Liz Truss’s disastrous attempt.
The move from massive tax cuts to steep tax rises has been criticised by some on the Conservative back benches, raising speculation of a rebellion by MPs over some measures.
“The painful reality about growth is that it can’t be stimulated overnight," Mr Danker will tell the conference, with the UK said to be already in recession. "That’s what the mini-budget got wrong.
“Across-the-board tax cuts. Immediate demand stimulus. Relying on the old British strength, consumption, at the expense of the perennial British weakness, investment, has given growth a bad name.”
Three ways the UK's autumn statement could affect you - video
Praising Mr Hunt for “staying the course” on projects designed to generate growth, such as the high-speed rail programme and the new nuclear power plant at Sizewell C, the CBI chief will also offer the government solutions to boost the flagging economy.
Mr Danker will also call on politicians to be “practical” about immigration, according to excerpts from his speech that were released early.
“Let’s have economic migration in areas where we aren’t going to get the people and skills at home any time soon. In return, let’s make those visas fixed term.”
UK finance minister 'focused on bringing down inflation' as economy shrinks - video
He will also urge reform of regulations and red tape.
“I know that some Conservative politicians today feel that this issue is the fault of Europe, Mr Danker will say.
"But the biggest regulatory barriers facing businesses today are based on British laws, created by a British parliament, and administered by British regulators.”
He is also expected to flag concerns over Brexit, namely the as-yet unresolved row with the EU about the Northern Ireland Protocol.
“Boris Johnson achieved a deal with the EU that allows us to continue to trade tariff and quota free with our biggest trading partner. There’s some good stuff in there. Currently locked up.
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“But still we argue over the Northern Ireland Protocol. Still we argue over sovereignty.
"Get round the table, do the deal, unlock the Trade and Co-operation Agreement.
"I say to Brexiteers, the best guarantor of Brexit is an economy that grows. Its biggest risk is one that doesn’t.
“Now I know that some of these things will not be popular with politicians but while I have no problem with government taking tough choices to bring stability, I want them to also take tough choices for growth.”
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The Details
Article 15
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Our rating: 4/5
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Essentials
The flights
Emirates flies direct from Dubai to Seattle from Dh6,755 return in economy and Dh24,775 in business class.
The cruise
UnCruise Adventures offers a variety of small-ship cruises in Alaska and around the world. A 14-day Alaska’s Inside Passage and San Juans Cruise from Seattle to Juneau or reverse costs from $4,695 (Dh17,246), including accommodation, food and most activities. Trips in 2019 start in April and run until September.
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Neighbourhood Watch
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
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While the best-known track major indices such as MSCI World, the S&P 500 and FTSE 100, you can also invest in specific countries or regions, large, medium or small companies, government bonds, gold, crude oil, cocoa, water, carbon, cattle, corn futures, currency shifts or even a stock market crash.
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How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
