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DERMOT MURNAGHAN: Is British business scared of Ed Miliband? Well the Labour leader has been described by his critics as anti-business after announcements of price freezes, land controls and corporation tax increases. Well I’m joined now by the Director General of the CBI, John Cridland, a very good morning to you Mr Cridland. So you are scared of so-called Red Ed then?

JOHN CRIDLAND: No, I have very good relations with Ed Miliband but at his party conference he did make a speech which moved the party a little bit to the left and business is entitled to be concerned about what that means for living standards, job creation and the Labour party’s view on the role of markets.

DM: He’s not coming to your conference either, is he? Is that because he doesn’t want to or you didn’t want him?

JOHN CRIDLAND: No, we invited the Labour party to speak at our conference and this year they asked us to have Ed Balls, the Shadow Chancellor and I am delighted that Ed will be with us tomorrow.

DM: Mm, but wouldn’t you rather have Ed Miliband there to ask him about, let’s be specific about it, we’ve got the headline in this price controls on the energy companies if they’re elected, a Corporation Tax increase for big businesses as well and taking land off developers who hold on to it for too long.

JOHN CRIDLAND: Yes, I think it raises questions about whether the Labour party believe that markets are the way to create wealth and jobs or whether they believe that markets need to be regulated by government. If you want more houses built, do you tell house builders you’ll take their land away if they don’t or do you encourage them to build more houses? These are the questions we are talking to the Labour party about but I think, Dermot, we are at the beginning of an 18 month election campaign, I think that’s what’s happened this autumn. The firing gun has been fired and we are going to have lots of attempts by politicians to attract voters. Business has to keep reminding politicians and indeed your viewers, that we need businesses to prosper, to create jobs, to raise living standards. That’s the way that we’ll deliver sustainable growth.

DM: But Mr Miliband has got a point, hasn’t he, in terms of public trust and confidence – I’ve been talking about that and the police but big businesses have been their own worst enemies recently, be that energy companies, banks, we all know about them but so many businesses are getting it in the neck for hiding their taxes and their profits and things like that.

JOHN CRIDLAND: I’d like to get back to the day when business can stand up and say we’re the consumer champion, we businesses exist to serve consumers and therefore consumers are at the absolute heart of what we do and it’s my job as chief cheerleader for business to make sure that’s exactly what business is doing. It’s what business wants to do, there have been these incidents that have shown we have even more work to do to put our house in order and I’m busy doing that.

DM: So do you think that Ed Miliband doesn’t get big business? He makes this distinction, doesn’t he, between the small businesses, when it comes to Corporation Tax for instance, big businesses you can pay more and small businesses, you can pay less.

JOHN CRIDLAND: Well I think that’s a fundamental mistake. Sometimes people think that the CBI speaks for large businesses, actually we speak for 240,000 British businesses, 99% of which are small. I speak for small, medium and large and what my small companies tell me is that they don’t want to be divided from large companies because they are probably in a supply chain to Jaguar Land Rover or Nissan or they are selling in to a high street large retailer. They need large companies to prosper but large companies need small companies to be innovative, nimble and dynamic. We live together and not apart.

DM: Well let me put this specific proposal from Ed Miliband, given what you’ve said about businesses having to improve their image – a living wage, which is higher than the minimum wage, tax breaks for companies that do that?

JOHN CRIDLAND: Yes, that’s a good idea. If you are a shoe shop on Hackney High Street, whether you can pay more than minimum wage which is £6.31 and the living wage in London is £8.55 an hour, depends on whether the local people coming into your shop to buy children’s shoes for the winter can pay the extra cost of the shoes. What the Labour party would like to do if they were in government is they want to pay about a third of that, so they want a tax incentive that would pay a third of that extra £2.21 an hour and pay it for one year. Now it is good to see today that the Labour party is talking about an incentive rather than a stick. This might help some businesses that have a skilled employee who has become very productive to pay them £8.55 in London but it won’t be for all employees because for all employees the shoe shop can only charge what they can get the customer to pay.

DM: Okay, people are going to want to know from the businesses you represent just how embedded is this recovery at the moment? What is the scenario over the hill, what is their view as we go forward?

JOHN CRIDLAND: I think the British economy is now set fair for recovery and I wouldn’t have said that even three months ago. Business services are doing well, manufacturing exporters are doing well, the intervention by the government to help the housing market has cheered up some of the construction companies and over the next year I think even consumers should begin to see some fall in inflation and some modest increase in wages. So I think we’re set fair, I think the economy will grow by 2.4% next year and 2.6% in 2015, that’s pretty close to what we call the trend rate of growth, what the British economy can bear. So it’s slow, it’s steady, it ain’t spectacular but if we can get to the mid two and a half percents and keep it there, that’s actually quite good.

DM: I see and business then making those all-important investment decisions as well. Issues that they don’t like in terms of making those decisions are clearly uncertainty and I’m thinking about the EU referendum. We’ve got more legislation going through, discussion of it going through parliament this week, how does business view the debate about whether Britain stays in the European Union or not?

JOHN CRIDLAND: Well I think the business community is pragmatic and realistic. They know that half of all of our exports go to Western Europe and much as we’re trying to get increased exports to China, that’s going to take an awful long time so we need the European single market. Some of the regulation that we get from Brussels is quite irritating and burdensome, particularly in the employment arena, things like the Working Time Directive, but on balance British business believes it’s better to be in the European Union and reform it from the inside.

DM: So just very briefly then, is it a mistake even to have a referendum or discussion of a referendum if British business wants to stay in?

JOHN CRIDLAND: I think a referendum is a matter for the Prime Minister, business concentrates on the economics. We want a reformed Europe and if the Prime Minister can persuade Chancellor Merkel and other European leaders that what’s good for British business is good for German business, then we all swim upwards and then I think we can ask the British public and put them a better proposition than the proposition we have on the table today.

DM: Mr Cridland, thank you very much indeed. John Cridland there from the CBI.