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CBI: 50 Years of Business Innovation | chapter name
The Rt Hon. Vince Cable MP The Rt Hon. Lord Heseltine of Thenford CH Origins of the CBI Timeline
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CBI: 50 Years of Business Innovation
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Foreword
welcome John Cridland Director-general of the CBI
It is an honour and a privilege to be Director-
talented engineers and architects have
I am optimistic, and the CBI’s Great Business
general of the CBI at any time, but particularly as
designed iconic buildings from South America
Debate and A Better Off Britain research, which
the organisation celebrates its 50th anniversary.
to Saudi Arabia.
offer recommendations to improve the lives of low-
As a historian, I can think of no better way
And there is nothing quite like the sense of
income and working families, will definitely help.
of marking the occasion than pausing to recall
national pride that comes when the latest Nobel
In the final weeks of the Scottish Independence
the many groundbreaking developments during
prizes are announced or you hear of major medical
Referendum, it was also encouraging that the
this dramatic period – in the world of business
breakthroughs that enable someone to walk again
Business Voice, honest and upfront about the
and beyond – as seen through the eyes of
after years of seemingly irreversible paralysis.
everyday impact of such a change on everything
some of the country’s greatest business
The UK and its businesses comprise a nation
from food in the supermarket to credit card
success stories.
of problem solvers, innovators, entrepreneurs
charges and mortgage payments, helped secure
As the first home-grown director-general,
and creatives. So when disaster strikes – as it
the Union.
I have had the benefit of the CBI’s unique vantage
did most recently in 2008, the worst economic
As we look forward and anticipate the UK’s
point at the heart of public policy and political
crisis since the Second World War – we pick
future economic success, the $64,000 question
thinking, both at home and increasingly around
ourselves up, dust ourselves down and begin
is how and where that success will come from.
the world. As UK global champions have striven
the long, hard process of rebuilding.
A rebalanced economy that focuses on
to extend their reach, the CBI has worked to
It has been a tough journey and many
increased exports and investment is the most
extend its influence on behalf of its members.
families have suffered a great deal. It has to
likely way to create the growth and jobs that
I never cease to marvel at the achievements
be said, too, that business did not cover itself in
will be needed, together with a thriving stream
of a small island of 94,500 sq miles and 61 million
glory during the downturn. Although the recovery
of entrepreneurs pushing the envelope on
people. We have some of the best universities
is now established and we are on a more positive
new innovation. But we will also need a fit-for-
in the world, lead the way in so many areas –
trajectory, and better placed than many of our
purpose education system that produces rounded
from pharmaceuticals to high-end manufacturing,
competitors, there is much work to do to win
and grounded young people who can fully realise
music and film production – and our highly
back public confidence.
their potential in the workplaces of tomorrow.
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CBI: 50 Years of Business Innovation
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Foreword
government and industry are forging durable success The Rt Hon. Vince Cable MP Secretary of State for the Department of Business, Innovation and Skills
Last year, I became the longest serving Secretary
That government must operate strategically.
Bank, we are tackling lending to business.
of State for Business, Innovation and Skills for
It must look to the long term. It must recognise
We are implementing the Kay Review, and are
50 years. This year sees the CBI turn 50. I like
that business cycles do not fit neatly into political
working with business and with markets to
to think that durability is a mark of success.
cycles. The CBI’s consistent calls to plan for the
create a new model of responsible business.
The CBI has a long history of economic thought
long term are testament to that.
For the very first time, every UK FTSE
leadership and it has maintained its leadership
That government must operate in
100 company has a woman on its board,
role in very different conditions.
partnership with industry. The current industrial
showing what can be achieved with a voluntary
In the 1970s, the CBI, the TUC and the
strategy shows what can be achieved when
approach. We have introduced sensible
government would sit down to agree prices and
government works together with industry to
reforms to strengthen the link between pay
wages across the economy. In the 1980s, the
create stability and certainty for businesses
and performance. The formula we adopted was
political weather vane swung 180 degrees and
to succeed.
agreed with the CBI, and it sets a challenge
the CBI had to adapt to hostility against so-called
That government must be less fragmented.
to boards. Ultimately, however, it is in the hands
“corporatism”. The CBI’s members had to deal
It must have, as the CBI called for, a “whole-
of CBI members to deliver the change needed.
with the devastating financial crisis and recession,
of-government” approach and not simply a
I want to continue to work with business
and some hostility to business excesses in the
“top-of-government” approach. Observers can
to develop world-class vocational training.
City. Now business and government are working
hopefully see an integrated approach at the
We have seen a record two million apprenticeship
together to promote long-term growth. Like the
Department for Business, Innovation and Skills,
starts since 2010 and we are working with
CBI, we celebrate the success of British business
whether it relates to skills, exports, or science
CBI members to improve our apprenticeship
and we see our relationship as one of partnership.
and innovation.
standards through trailblazers.
I introduced the government’s industrial
We have stabilised and detoxified the
We cannot do all of this alone. The CBI
strategy to put our economy on the road to
banking system and, through the Business
is a valued partner in that mission.
recovery. It was a rebalancing based on investment and exports, not unsustainable borrowing and debt. In doing so, I made some observations that, until recently, were quite controversial.
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“ Like the CBI, we celebrate the success of British business and see our relationship as one of partnership”
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CBI: 50 Years of Business Innovation
Laying the groundwork for the competitiveness agenda The Rt Hon. Lord Heseltine of Thenford CH President of the Board of Trade, 1992–95
“I enjoyed tremendous
When I took over at the Department of Trade and
of competitiveness. I reallocated resources
support from the CBI,
Industry (DTI) in April 1992, I wanted to understand
within the department towards supporting
what an industrial strategy for Britain would look
some of our most successful industries and
like. My first question to officials was: what is our
away from regulation and subsidy. Finally, we
industrial strategy? The reply was that they were
established Business Link, which was designed
not even allowed to use the words “industrial
to help chambers of commerce provide a more
strategy” – so we were clearly starting at a very
comprehensive and tailored service.
low level of interest in the matter.
I must say that I enjoyed tremendous support
The first priority was to address the issue
from the CBI, which was fully aware of the myriad
of competitiveness and establish how British
of relationships between the public and private
businesses stood in relation to those of our
sectors. My aim was to make sure that those
main competitors. The second task was to
relationships worked as well as possible in each
ensure that the DTI itself was geared up to deal
of those three key areas.
with this challenge. It became apparent very
I would not say I wholly succeeded, but
rapidly that we were heavy on the ground with
one can never relax and say that the job
civil servants in sectors where the government
is complete because your competitors are
owned, or heavily subsidised, the industries.
always upping their game. But, looking at
The same pattern emerged with regulated
the situation today, many of those ideas have
sectors. However, when it came to freestanding
borne fruit. There is a very close relationship
private enterprises, the government took very
between the motor industry and government,
little interest. The final piece of the jigsaw was
the aerospace sector and government, and
to focus on the way in which firms were supported
indeed with many other sectors. I would like
by private-sector organisations.
to think that what we did two decades ago
As a result, we published an annual
has contributed to the industrial strategy
report with ratings for each of the elements
that is now in place.
which was fully aware of the relationships between the public and private sectors”
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CBI: 50 Years of Business Innovation
The birth of the Voice of Business origins of the CBI
In 1965, against a backdrop of state intervention
firmly believed that ignorance of this critical role
and control, rampant inflation and a severe
was one of the primary causes of the economic
balance-of-payments crisis, the CBI began
malaise that was holding the country back.
its work.
Even in the early days, the fledgling CBI was encouraged by parts of the business
In the words of Sir Maurice Laing, the
community to “fight the government”. However, it
CBI’s first president, the national business
stood firm and insisted that “it was the duty of
organisation was formed as a result of the
the CBI to be non-political and to endeavour to
common sense of thousands of people, and
assist the government of the day, whatever its
the vision and responsibility of a few people.
colour”. This has remained the guiding principle
In particular, this included Sir Peter Runge
of the CBI’s work in the years that have followed.
and Sir Norman Kipling of the Federation of
The die was cast and, on 30 July 1965, the
British Industries, Leslie Jenkins and Harry
CBI was incorporated by Royal Charter by
Gray of the National Association of British
Her Majesty the Queen.
Manufacturers and Sir George Pollock of the
Fast-forward to 2015 and the CBI, which
British Employers’ Confederation.
is now established as the leading voice of business across the UK, speaks on behalf of
the success of industry
190,000 businesses of all sizes and sectors.
In its first annual report, just eight months after
Together, these employ around 7 million
its formation, the CBI reminded its stakeholders
people, which is one third of the private-sector
that “the whole future of Britain rests upon
workforce. With offices in the UK as well as
the success of industry” and “industry must be
representation in Brussels, Washington, Beijing
endeavour to assist the
dynamic, competitive and profitable to compete
and Delhi, this growing network enables the CBI of today to project the voice of UK business
government of the day,
in an ever increasingly competitive world”. At the time, “the education of the public and
around the world.
“It was the duty of the CBI to be non-political and to
whatever its colour”
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the government to the vital role of industry” was the CBI’s principal objective. The organisation
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Opposite: The CBI’s new offices at Cannon Place
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CBI: 50 Years of Business Innovation
timeline highlights from the CBI’s first 50 years
1965 • The Confederation of British Industry officially
•F ull CBI membership was extended to “all the main sectors of the business community”.
the British Employers’ Confederation, the
1969
Federation of British Industries and the
• The CBI published Britain in Europe – A Second
National Association of British Manufacturers. and a time of rampant inflation, together with a severe balance-of-payments crisis.
TUC and the CBI helped to increase the public’s
advising on issues vital to Britain’s membership
understanding of the dangers of inflation and
of the European Economic Community.
paved the way for the pay and prices standstill.
• Singapore President Lee Kuan Yew met with
and particularly for small firms. • The CBI set up a Steering Group for Small Firms that later evolved into a fully-fledged council and, ultimately, into today’s Enterprise Forum. 1967
1970
Conservative minister Viscount Watkinson
• Fuel supplies became a growing concern
published a report, The Responsibilities of
for businesses as industrial discontent led
the British Public Company, which set the
to a number of “work-to-rule” actions.
scene for the debate on corporate governance
• The government acted on two key CBI
• Following the report of the Commission of Inquiry
on coal imports and stopping conversion
into Industrial and Commercial Representation,
of power stations to oil.
the CBI strengthened the power of its regional councils to set national policy.
awareness of key issues among management,
1971
unions and workers.
•T he CBI launched its price restraint campaign. Nine out of 10 of the CBI’s largest 200 members
counterparts in Moscow ahead of a visit to
signed an undertaking to avoid price increases
Russia by the president and director-general.
where possible, or limit them to 5 per cent if unavoidable.
1968 • The Employment Policy Committee was
and responsibility.
recommendations: dropping restrictions
• A joint initiative with the TUC aimed to increase
• A CBI party of industrialists held talks with
1973 • A CBI committee chaired by former
1966 considerably more complex for businesses,
incomes policy. • Tripartite talks between the government, the
Industrial Approach, a consultation document
the CBI as part of an official visit to the UK. • Changes to taxes and regulation made life
• Inflation hit 27 per cent as a series of major pay disputes shattered the government’s
comes into being on 30 July, bringing together
• It was born into a world of state intervention
1972
•A survey of CBI members by the Europe Steering Committee showed a strong majority in favour
1974 • The year saw the imposition of a three-day week, the oil crisis, a miners’ strike, two general elections and three Budgets. • The early years of the second Wilson government led to radical policies, which the CBI had to confront – some »
established to advise, initiate research and
of EEC membership. The CBI’s Brussels office
steer the work of other CBI committees in
was opened, giving direct access to the policy
Opposite: Sir Terence Beckett launches the CBI’s
employment matters.
machine of the EEC.
The Fabric of the Nation report
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CBI: 50 Years of Business Innovation
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of which resulted in sharply divided views
1980
on tactics among members.
•A s the government increased interest rates
• The CBI called for full UK membership of the European Monetary System, arguing that the
to as high as 16 per cent to combat inflation,
discipline of a more stable exchange rate could
1975
CBI director-general Sir Terence Beckett
help to increase Britain’s share of world trade.
• CBI president Sir Ralph Bateman
delivered his controversial “bare-knuckle
commissioned Lord Plowden and Sir John Partridge to carry out an independent review of the organisation. • The CBI launched a vigorous campaign for
fight” speech at the national conference. •T he year marked a new era for the CBI, which
• The CBI contributed to Industry Year – a national
left its home in Tothill Street in London’s Mayfair
programme launched by Prince Philip aimed at
for the landmark tower of Centre Point.
raising the awareness of the contribution that
Britain’s continued membership of the EEC, which was the subject of a referendum.
1986
industry and business make to the creation 1981 • The CBI started to focus on the issue of boosting
of wealth. • The CBI held a conference, Keying into the
1976
national competitiveness as the government
Future, and set up a panel of under-35s called
• The Road to Recovery, a report produced with
began to gain control over inflation.
Vision 2010 to study the direction British
input from more than 500 member companies, had a significant impact on government
• Her Majesty the Queen visited the CBI in its
thinking and public attitudes to issues such as
1987
cuts in spending, lower taxation and the need
1982
for further pay restraint to help beat inflation.
•T he CBI argued for savings from government
• Based on consultation with its members, the
expenditure and borrowing to be used to
CBI put forward constructive views to the
cut industry’s overheads and to finance new
Bullock Inquiry into industrial democracy.
projects, thereby boosting economic activity without increasing inflation.
1977 • The CBI held its first national conference in Brighton. Delegates from 800 firms attended
• It gave its backing to the Youth Training Scheme,
• The CBI Pay Databank was established to
bodies organising the scheme.
saying industry needed to retain more of the wealth it generated so that it could invest in people, skills, machinery and innovation. • The Design or Decline initiative to improve product design and marketing strategy was endorsed by Prime Minister Margaret Thatcher. 1988 • The Initiative 1992, a series of roadshows, kicked
1983
off a continuing process of preparing companies
• Strong campaigning by the CBI led to a
for the business implications of the completion
research and publish information of trends
reduction in the National Insurance Surcharge,
affecting pay claims and settlements across
saving employers £2 billion a year.
many sectors of the industry.
• The CBI called for an “era of investment”,
ensuring strong employer representation on the
the event, which attracted coverage in the print and broadcast media.
industry should take over the next 25 years.
new Centre Point home.
•T he CBI launched its regular monitor of retail sales: the Distributive Trades Survey.
of the Single European Market in 1992. • The CBI set up a biotechnology working party, and continued to push for harmonisation of standards, testing and certification.
1978 • The outbreak of strike action, now known as the Winter of Discontent, proved to be a nadir in industrial relations. • The CBI resisted the government’s move to introduce a pay clause into contracts with industry, which was ultimately withdrawn.
1984
1989
• The CBI took a strong line on the promotion of
• The CBI set up task forces to look at specific
energy efficiency this year, seeing it – among
areas where competitive handicaps faced the
other things – as a major contributor to
UK economy. They investigated the building
controlling costs.
of links between schools and business, the
•T he report, A Share in the Action, was a key document in the argument for promoting
1979
greater individual participation in the creation
• The election of Margaret Thatcher as
and ownership of wealth.
end to industrial problems.
approach to urban regeneration and the improvement of skills. • Polish premier Lech Walesa addressed CBI members at Centre Point and Mikhail
Prime Minister appeared to herald an •T he CBI published Guidelines for
need for transport infrastructure, a strategic
1985
Gorbachev met leading industrialists at a
• A major policy discussion document,
joint CBI /DTI event. »
Action on Employee Involvement and
Change to Succeed, was the driving theme
ran a series of associated regional and
behind the national conference and much
Opposite: Alan Lewis (left) chairman of the CBI’s
national conferences.
of the CBI’s policy work throughout the year.
1992 Single Market initiative
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CBI: 50 Years of Business Innovation
1990 • Although the economy was growing strongly,
qualifications and closer links between business and education.
the CBI warned that five points of inflation cost
• Centre Point was the location for the signing
business around £20 billion a year – more than
of an investment agreement between Prime
the total retained earnings of all UK commercial
Minister John Major and his Pakistan
and industrial companies in 1989.
counterpart Benazir Bhutto.
• In the year that the CBI celebrated its 25th birthday, Prince Philip visited Centre Point.
1995 • The CBI went public over its concerns
1991
around the Private Finance Initiative, making
• At a time of momentous change in the
recommendations that challenged the
countries of the former Soviet Bloc, the CBI launched its Eastern Europe initiative to
government to fulfil its commitment to PFI. • The National Manufacturing Council launched
help speed emerging trade between British
PROBE, an initiative to tackle deficiencies in
companies and newly independent countries.
skills and training.
• The CBI lobbied the Maastricht Summit to prevent the retrospective application of the
1996
so-called Barber judgment of the European
• The CBI launched the Business in Europe
Court on occupational pensions, which would have cost CBI members between £40 million and £50 million.
campaign, making the case for a free market rather than a regulated European Union. • The report Winning Ways called for a rise in investment across all transport modes for a
1992
decade, financed by public and private sectors.
• In the Budget, the Chancellor responded to CBI calls for cuts in rates on business properties
1997
and for higher tax allowances on capital projects.
• In the wake of the landslide Labour victory
• The National Manufacturing Council was
in the general election, the CBI decide
launched, providing a forum through which
to engage fully in the debate over the
manufacturers of all sizes and sectors could
government’s commitment to the Social
influence CBI and government policy, and
Chapter, the prospects of a National
work with other commercial organisations
Minimum Wage and compulsory trades
on UK manufacturing issues.
union recognition.
• The agenda for the UK’s presidency of the EU
• CBI lobbying succeeded in ensuring that
was shaped with help from the CBI. Progress was
substantive amendments to UK law were
also made on the Single Market programme.
avoided. It sought to minimise the effects of statutory union recognition by working
1993
on the detail of proposals at an early stage.
• The CBI launched the Manufacturing by Design initiative to increase the awareness
1998
of manufacturing among young people
• CBI membership of the Low Pay Commission
and to strengthen links between business and education. • Its leaders welcomed Nelson Mandela
ensured a successful start for the National Minimum Wage. • The CBI was instrumental in influencing
to Centre Point, while the South African
the final powers of the assemblies and
president-in-waiting was on a UK visit to
regional development agencies, and of the
attract foreign investors.
Mayor of London, as part of the process of devolution. »
1994 • The CBI launched a sustained campaign for a “skills revolution” that promoted vocational
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Right: Gordon Brown at the CBI Annual Conference in Birmingham
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CBI: 50 Years of Business Innovation
1999
2001
2003
• The CBI publication Clockwork was at the
• The CBI held its first business summit allowing
• CBI’s work on The UK as a Place to Do Business series responded to members’
forefront of an initiative driving British
senior business leaders to hear from their
companies to take action to ensure their
peers and from academics on where they
concerns about the deterioration of the
computer systems would survive any
thought the future of business lay.
UK business climate and focused attention
effects of the feared “millennium bug”. • President Sir Clive Thompson used a
• The CBI designed the Emissions Trading Scheme and proved to government it was
hard-hitting debate with the GMB’s John
a better way forward for the environment
Edmonds to reinforce the importance of
than the Climate Change Levy.
international investment decisions. • At the national conference, Chancellor Gordon Brown addressed delegates and highlighted the need to create a “stronger,
UK labour markets remaining flexible and responsive.
on the factors critical to determining
2002
deeper enterprise culture”.
• CBI director-general Digby Jones opened the 2000
CBI’s office in Washington, DC, to expand the
2004
• The SME Council launched its SME
international presence it had established with
• The CBI’s pensions strategy group examined
charter Facing the Future. • Incoming Russian President Vladimir
its Brussels office.
the key challenges facing UK business
• I ts pensions conference in the autumn was one
Putin visited the CBI for talks at
of the first to alert employers to the significance
Above: Director-general John Cridland meets R2D2
Centre Point.
of ominous developments in this area.
at Annual Conference 2014
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and produced the vision document Securing
CBI warned that restricted opening hours,
could be reduced, including improvements
Our Future – a set of strategic recommendations
difficulty in booking appointments and limited
to the education and skills systems.
on the long-term direction for UK pensions.
services on offer in many doctors’ surgeries
• On a lighter note, then-chief economic adviser Ian McCafferty (now a member of the Monetary
resulted in millions of lost working days and
2012
was detrimental to people’s health.
• Ideas to support high-growth exporters, put forward in the CBI’s Financing for
Policy Committee) led his team to victory over The Royal Opera House on BBC2’s
2009
Growth report, led to a commitment by
University Challenge.
•T he CBI launched the report of its Higher
government to a business bank that
Education Task Force, which brought together
would bring all existing access to finance
2005
representatives of business and universities.
schemes under one roof.
• The CBI launched its Business Agenda setting
It said the rapid rise in student numbers,
• The CBI’s First Steps report, setting out
out the top 10 priorities for the new government,
coupled with a severe strain on public
a new approach for schools, found favour
calling for immediate action on pensions
finances, made current public funding
across the education establishment with
and climate change, together with long-term
levels unsustainable.
calls for a greater focus on developing more
investment in skills, transport, and science and innovation.
• Steve Ballmer, the CEO of Microsoft, gave
rounded and grounded young people.
the CBI Annual Lecture, focusing on ways in which businesses from all sectors could
2013
for the World Trade Organization summit that
not only survive tough times but continue
• The CBI released the landmark report
took place at the end of the year.
to thrive despite the challenges of the
Our Global Future: The Business Vision
worldwide downturn.
for a Reformed EU, an apolitical analysis
• The CBI opened an office in China and prepared
of the advantages and disadvantages
2006 • The CBI welcomed what it called individual business-friendly steps in the Budget, but warned
2010
of the UK’s EU membership, which
• The CBI report on skills, Fulfilling Potential:
concluded that the UK should remain
that the package fell short of the boost for UK
The Business Role in Education, called for
competitiveness that business was seeking.
a renewed focus on science, technology,
• Richard Lambert, former editor of the Financial Times and a member of the Bank of England’s Monetary Policy Committee, took over as CBI
in a reformed Europe. • CBI president Sir Roger Carr hosted
engineering and maths qualifications,
the presidents of national business
as well as improvements in basic skills.
federations from across the G8 in
• In Room at the Top, the CBI called on listed
London, where they met Prime Minister
director-general on 1 July after spending a
firms to improve boardroom diversity by
David Cameron and Business Secretary
month travelling the country and hearing the
using the UK Corporate Governance Code
Vince Cable to discuss tax, trade
views of CBI members.
on a “comply-or-explain” basis rather than
and transparency.
on internally set targets. This influenced 2007
the subsequent decision by Lord Davies
2014
• The CBI’s new Climate Change Task Force
to argue against quotas.
• CBI HQ moves into modern, steel-andglass offices in Cannon Place, London.
was established to investigate the role business could play in tackling global warning. • As the financial crisis started to hit the UK,
2011 • New director-general John Cridland leads the
• The CBI highlighted the need to safeguard Britain’s supply chains, saying targeted
Richard Lambert called for the government
CBI’s campaign to gain support for medium-
action to revitalise domestic supply chains
to provide “well-targeted, controlled and
sized businesses and increase trade produced
could inject £30 billion into the economy
time-limited fiscal stimulus in the immediate
results, with the £1 billion Business Finance
by 2025, creating more than half a
future” while focusing on cash flow for
Partnership and other policies to support
small firms.
exports, as recommended by the reports Future
2008 • The CBI opened for business in New Delhi, India. • In its report Just What the Patient Ordered, the
million jobs. • The CBI’s major report A Better Off Britain
Champions and Winning Overseas: Boosting
set out how business and government could
Business Export Performance.
work to improve the lives of low-income/
• The CBI’s Action for Jobs: Getting the UK Working report set out ways unemployment
working families by making growth work
•
for everyone.
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