Lambert leaves rate-setting role to take helm at CBI

Richard Lambert was forced to step down with immediate effect from setting interest rates at the Bank of England after he was announced yesterday as the successor to Sir Digby Jones as the director general of the CBI.

Mervyn King, the governor of the Bank, said there was a potential conflict of interest in Mr Lambert continuing to sit on the nine-strong monetary policy committee in advance of moving to the employers' organisation in July. The MPC will have only eight members for its April meeting in a fortnight's time.

Mr Lambert said he had been invited to serve a second three-year term on the MPC from May but had declined the offer when the "real cracker" of a job at the CBI came along. He will be on "gardening leave" until taking over at Centre Point.

The former FT editor was chosen from a field of 300 candidates that was whittled down to two: Mr Lambert and the CBI's deputy director general, John Cridland. Mr Lambert said he was "delighted and thrilled" to get the job, and promised to lobby the government hard for a simplified tax system and a better-trained workforce. "The CBI needs to be leading the argument for a simple and competitive tax and regulatory regime and for improvements in skills and education. I couldn't imagine a more worthwhile or challenging mission."

Mr Lambert said he had no "political baggage" despite being appointed by the government to help with reviews into the BBC and into collaboration between business and education. "I have never been a member of a political party, nor have I ever donated money to any of them," he said.

Relations between the CBI and the government have cooled in recent years as business has raised concerns about regulation, tax and rising energy prices. Mr Lambert said ministers should expect him to fight the corner of business, and announced his intentions by criticising Gordon Brown's 10th budget as a "missed opportunity". The speech was "a political, not an economic event," he added.

Mr Lambert said the CBI was "in robust shape" and there was no need for radical change. "British business needs a powerful voice to put it where it belongs. It is not a separate interest group - the future well-being of everyone in the country depends on the dynamism and prosperity of our business sector."