Short-Term Job, Long-Term Goals; Chris Clifford Stand-In Director of the Confederation of British Industry in West Midlands

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Byline: Philip Waller

For a man who commutes down the M6 to Birmingham from Warrington each day, keeping on the move is important.

And Chris Clifford is keen to get the economy moving again while he stands in for Carolyn Hannah as West Midlands regional director of the Confederation of British Industry.

The former CBI North-west director, replacing Ms Hannah while she takes maternity leave, reckons conditions for doing business in the UK are better than anywhere else.

But he says firms may be unable to take advantage of them if they are saddled with more red tape, tax and instability.

'There is uncertainty at the moment and business needs a stable outlook,' he said.

'We have low inflation and low interest rates and there's no place in which I would rather do business at the moment than the UK.

'We have the advantages of a flexible labour market, but the Government shouldn't destroy that with creeping regulation.'

The CBI recently cut its forecast for growth in the country's wealth in 2003 to 2.2 per cent from 2.4 per cent and in 2004, to 2.4 per cent from 2.7 per cent.

That is much lower than Mr Brown's forecasts of 2.5 per cent to three per cent and three per cent to 3.5 per cent respectively.

Mr Clifford says that does not mean 'Armageddon' and complete meltdown.

But he says business faces huge challenges to pull the economy out of its current slump. Ongoing weak demand in the manufacturing sector was down to a number of factors, principal among which was the state of the global economy, which had not recovered at the rate forecasted six months ago.

'I think a lot of that is to do with the uncertainty over the possibility of a war in Iraq, the general threat of terrorism and the anticapitalist sentiment that we have seen in certain parts of the world,' he said.

'Companies need a stable environment and as certain an outlook as they can get to ensure they invest in the right conditions. 'We're finding that the investment intentions of a lot of our members are pretty weak at the moment.

'On top of that, we have a number of things coming through that will add costs to businesses and about which they can do very little.'

Mr Clifford believes one of the biggest issues that the UK will face during the next 12 months is pensions.

People are living longer, the stock market is weak and the Government's decision five years ago to abolish tax relief on pension schemes took pounds 5 billion out of plans each year for the last five years, Mr Clifford said.

'When that was announced in the Budget of 1997, stock markets were doing very well' he said.

'But now we've gone full circle and therefore the Government has to take some responsibility for creating the really worrying situation we have now.

'I think the days of final salary pension schemes are numbered and we have to look at other, creative and simple ways of encouraging people, particularly the young, to save for the future.

'If they don't do that, they won't be in a position to retire with the same sort of benefits and spending power that people reaching retirement age currently have.'

Critics accuse companies that replace generous final salary schemes with defined contribution schemes, which rely more on stock market performance, of simply taking advantage of the stock market slump to relieve themselves of responsibility for pensions.

The CBI is not saying firms should stop offering pensions, since they can be valuable benefits that help attract and retain good staff, Mr Clifford said.

But the CBI would resist moves, advocated by trade unions and others, to force companies to offer final salary schemes, he added. 'It is incumbent on both sides, employers and their staff, to ensure pension provision, but there's no point bankrupting your business to maintain a final salary plan,' he said. …