CBI Supports Burnham's State-Led Growth, Urges Private Sector Role

CBI chief executive Rain Newton-Smith commented on Prime Minister Andy Burnham’s economic vision.

The Confederation of British Industry (CBI) gave a guarded endorsement to Prime Minister Andy Burnham’s vision for increased state intervention, emphasizing that public investment should complement, not replace, private sector funding.

Rain Newton-Smith, CBI chief executive, said Burnham’s first Labour conference speech as prime minister outlined an ambitious economic vision. Its success, she noted, would rely on businesses providing investment, expertise, and innovation.

“Public investment should be designed to crowd in, rather than crowd out, private capital,” Newton-Smith said.

In his Liverpool speech, Burnham detailed plans for greater state involvement in energy and infrastructure. He pledged to address long-standing issues like social care and youth unemployment.

A key announcement was the Great British Grid, a publicly owned entity within Great British Energy. This company will invest in electricity network infrastructure and compete with private operators.

The government claims this body will help businesses secure faster grid connections and boost investment. Burnham aims to align UK energy costs with European levels within a decade.

Newton-Smith supported the proposal but emphasized its success should be measured by its ability to accelerate connections without sidelining private investment.

As renewable generation grows, Britain’s electricity infrastructure faces significant expansion. Ofgem estimates that £70 billion in grid investment will be needed between 2025 and 2031, with much expected from private companies.

The CBI also praised Burnham’s willingness to tackle challenging issues like the state pension and social care. Ministers consider reviewing the pensions triple lock as they develop a new social care system, though no abolition has been announced.

Newton-Smith called for similar ambition in addressing youth unemployment, alongside policies encouraging business investment and recruitment.

She backed Burnham’s commitment to fiscal discipline and closer EU ties, while commending his pragmatic approach to the North Sea.

“The Budget now needs to provide the first downpayment on that partnership,” Newton-Smith said.

She urged Chancellor John Healey to ease cost pressures on employers in the October 28 Budget, arguing businesses need more confidence to invest and hire.

This intervention reflects a cautious improvement in relations between the government and corporate Britain at Labour’s conference. Business leaders remain focused on whether next month’s Budget will increase their tax burden.