John Cridland: 'The public sector must feel private sector's pain'

The Business Interview: The CBI's new, more cautious director general talks to Sean O'Grady about the 'necessary' cuts, and ways to get UK plc back on track

For some reason, I had always assumed that the CBI's latest director general, John Cridland, was an accountant. Actually, the reasons are pretty obvious: he looks like one and sounds like one. His grey pinstriped suit is not an especially flashy one, like one with those deep chalky stripes that the bankers used to favour in the good times. Mr Cridland favours a neat striped shirt and tie combo, he hasn't the vanity to wear contact lenses rather than spectacles and is gently spoken, with the slightest hint of an East Midlands accent. But Mr Cridland didn't train to be an accountant, or anything else: he is a CBI "lifer", having joined the lobbying group in 1982 straight after Cambridge and stayed there ever since.

During our interview the "voice of business" doesn't stray far from his line of general support for government policy, even at one point offering praise for the beleaguered Andrew Lansley's NHS reforms. Mr Cridland's immediate predecessor, Sir Richard Lambert, snarled at the Coalition in a valedictory address in January for having "failed to articulate in big-picture terms its vision of what the UK economy might become under its stewardship", and taking a "series of policy initiatives for political reasons, apparently careless of the damage they might do to business and to job creation".

There is a contrast there with Mr Cridland, who argues that "it isn't obvious to me that there is some sort of master plan available to us" – because the levers available to government in a modern globalised economy are so few, hedged in by globally mobile capital and people, international rules and economic realities. He believes, rather, that the Coalition has "got off to a good start on the basis that the deficit was the number one task". His message to the Chancellor for his Budget today is: "Just Stick to Plan A." Unlike Sir Richard, Mr Cridland believes the slow, gradual, piecemeal nature of the Government's plans is inevitable: "There is no silver bullet. The biggest way to promote growth is to protect our sovereign AAA rating so firms can invest with confidence and we can keep private borrowing costs down.

"The Government needed to take quite a lot of time on its growth agenda. I don't criticise them for that."

One bold move he does urge on them is to mandate a 40 per cent threshold for strike votes, so that 40 per cent of those eligible to vote positively support action. Mr Cridland suggests this would be a sensible "precaution" for a government that may have some bruising battles ahead.

Overall, though, the tone is restrained at the CBI these days, and I think it's doubtful that the organisation will get into as many scrapes with government as Sir Richard did, still less the colourful Digby Jones. Or, going back to the days when Mr Cridland was a CBI freshman, the pugnacious Sir Terry Beckett, an ex-Ford man who told Mrs Thatcher, of all people, that he was up for a "bare knuckle fight" over her policies.

Mr Cridland does do passion sometimes, though. He declares, for example, for a moment almost Obama-like himself: "The last thing we want is an Obama-style jobless recovery. We had a relatively better performance on jobs in the recession, so why not drive that through and have a relatively better performance on the upside as we create jobs?"

He suggests that it's the turn of the public sector to undergo the pain and learn the lessons the private sector did in the slump: exercise pay restraint and work together to minimise redundancies, if needs be by going over the heads of the likes of Bob Crow, general secretary of the RMT.

Warming to his theme, he points out that every year in the last 20, private business has created 200,000 new jobs, net, except for the recession years of 1992 and 2009. Mobilising the usual criticism that many of these jobs are part-time or temporary, he adds: "Every time we poll our members, the primary constraint they identify is employment legislation and a real disincentive to take on extra staff."

Thus, argues Mr Cridland, tiny businesses are so frightened about costly employment tribunals kicking in after a year if things don't work out with a recruit that they would rather employ people on a six-month contract than as permanent members of staff. Hence the way 209,000 new part-time jobs in the economy last year outstripped the 90,000 new full-time posts. Mr Cridland wants new recruits to be given two years to prove themselves in small firms, reverting to the position before Labour strengthened workers' rights in 1997.

I meet Mr Cridland at the local headquarters of a CBI member firm named Enterprise, which has taken over housing maintenance at Barking and Dagenham Council. On a grey morning on what was once the largest council housing estate in Europe, we go out and about with the Enterprise fitters as they pursue what Mr Cridland calls a "re-engineering" of local government in action, in practical terms making express call-outs to broken boilers and leaky roofs in territory that grew prey to the BNP, in part because of disenchantment with social housing.

Mr Cridland says that local authorities have to go much further in becoming purely commissioning rather than delivery machines. While functions such as school catering or refuse collection have been out to competitive tender – about 50 per cent of local government activity – a further 30 per cent of council work could go the same way, such as housing department admin, say, that have hitherto remained untouched by private enterprise.

With enthusiastic ex-Army apprentices, more contented residents and pragmatic local Labour councillors, the Dagenham model does seem to be a fine example of municipal re-engineering, and doing its small part to make an inroad into the 974,000 16 to 24-year-olds who are registered unemployed.

It is in this context that Mr Cridland makes a sole faux pas. Pushing the case that the abolition of a statutory retirement age destroyed employers' "right to manage retirement", he conjures up "an old fuddy duddy who won't give way", getting "a bit slow" and "getting crotchety" with customers and blocking up jobs for younger people – a Victor Meldrew-ish image of the over 60s.

"Not everybody of a particular age is a fuddy duddy," Mr Cridland adds, just in case I take his non-PC words as a gaffe. Careful and cautious, then, is the current voice of business, and sharp enough to spot and correct mistakes with forensic precision. The CBI isn't being led by an accountant, but it may as well be.

Additional research by Zahra Saeed

The voice of business

* Born 3 February 1961, he went to Boston Grammar School and studied Indian and African history at Christ's College, Cambridge.

* After joining the CBI in 1982 as a policy adviser, his path to becoming head honcho included stints as the youngest ever director of Environmental Affairs and of Human Resources Policy. He was deputy director-general from 2000-2010 and is now the 10th head of the organisation and the only one who was already working in-house.

* He was on the Low Pay Commission until 2007 and the Acas Council, the employment conciliation service.

* He lives in Bedfordshire with his wife and two teenage children.