Jones: talking up economy

The CBI chief Digby Jones has warned business that it must not talk Britain into a recession.

He told delegates that Britain must adopt a business as usual approach despite the attacks on the US.

Jones said that getting on a plane would be the ultimate way of beating the terrorists. "Get on a plane and be seen to get on a plane," he said before calling for "everybody to get their heads up".

In a speech that earned him a minute-long standing ovation, the CBI chief said business had a role to play in the response to events of two weeks ago adding "business is one of the constants in society" and that there was "a brighter tomorrow" that people should look towards.

The primary theme of his speech was a pep talk to Britain's businesses urging them not to talk themselves into a recession in the wake of the terrorist attacks on the US.

Jones dismissed talk of a global recession engulfing the economy, saying analysts should resist the "doom and gloom scenario".

"We are living in uncertain times but you won't here me talking about general recession. What is frustrating for business is the 'financial take' on the situation that appears in the headlines. I have many members whose share price is tumbling whilst the basic fundamentals of their business remains strong," he said.

He told delegates that events had hastened the economic downturn but it was not a new situation.

"It is helpful to state all this bad news isn't new bad news," he said before urging the Bank of England to make a further interest rate cut.

Jones called on the government to help the airline industry and the tourism businesses that were still suffering from the fallout of the foot and mouthcrisis.

He urged the EU to cut red tape and but warned against it opening "Pandora's box" by giving large cash bail-outs to European state-owned airlines.

"This is an opportunity, both politically and economically, for the EU to come into its own and show what it can do," Jones said.

He argued the official figures have yet to be released and other than those on manufacturing, none of the official indicators have spent successivequarters without growth - the usual definition of a recession. The absence of official data on the effect of the attacks means the doom and gloom isunjustified.

"With certain obvious exceptions in specific sectors, companies are reporting that the direct impact on activity has so far been very limited," Jones said.

Jones also urged the UK government to cut red tape as a way of helping airlines and tourism businesses.

"Government must help in this area; a more benign view taken by regulators to facilitate consolidation would be a welcome start," he told delegates.

His second message was that business had a social role and wanted to play a part in making society a better place by "taking everybody with us". Goodbusiness was "virtuous not vicious".

Bringing the private sector into public services should not be an exercise in ideology.

"No-one can say our public sector is delivering best service," he said.

The Lib Dem leadership did not back his call to support the airline industry and told business chiefs they should not expect unlimited handouts to dealwith the fallout from the US terror attacks.

Dr Vince Cable told the conference that the argument that the British government should match every subsidy to US companies is "spurious". Cablesaid airlines should not be given limitless government funds.

"It is right for the government to intervene to help out with insurance cover. But the government should not be in the business of bailing out failing airlines that had overstretched themselves," Cable said.

The trade and industry spokesman called on the government to carry out a range of measures aimed at helping UK PLC through the expected downturn.

Government departments paying their bills on time and honouring their spending commitments without delaying their announcements would make asignificant difference to the private sector, Cable argued.