Time running out to come up with a UK economic strategy
AS summer draws to a close and autumn approaches, we urgently need a plan for the UK economy. With a spring start to the UK’s two-year journey out of the EU, there’s no time to lose.
The plan does not need all the answers, but it needs some. We should not expect to see the full shape of the UK’s negotiating position – the choices on “hard” versus “soft” Brexit are part of a Rubik’s cube over which the UK has only one-sided control. But we should hope for answers on three things.
First, we need a resounding reassurance that the UK Government is truly pro-enterprise. Though Brexit was largely a political event, its economic consequences will be felt for decades to come.
Only if UK business thrives will the outcome be positive for jobs and living standards. Firms’ priorities for the new EU deal are well understood – maximising single market access; securing global talent alongside a skilled domestic workforce; and ambitious new trade deals.
The Great Repeal Bill provides some clarity. We now know that when the UK leaves the EU, the rules businesses must follow will stay broadly the same. As long as it does not lead to a bonfire of good regulation and maintains consistent rules so firms can trade easily with EU neighbours, this has the potential to help.
But businesses cannot continue to operate in the dark in other areas. The UK Government’s desire to play its negotiating cards close to its chest must be tempered by clear indications on how we will trade with the UK’s most important partner and how firms will be able to employ the people needed to drive growth.
Second, we need a genuine partnership between the UK Government and business. Engagement today is fragmented and piecemeal. What is urgently needed is a road map for business consultation, sector by sector, region by region and nation by nation.
And it should be set up to last years, not months. This will bring two advantages. It will give firms confidence they are being heard when negotiations with the EU may make open communication difficult. And it will provide evidence from companies to prevent bad decisions and maximise good ones.
Business needs to do the same – organise itself well, avoid thousands of separate wish-lists, be easy to deal with. This is working well in some sectors – for example, financial services – but there is more to do. As a voice for the whole economy, the CBI can help prevent fragmentation and ensure clear airwaves from firms to government and vice versa.
Third, we need a domestic plan to build confidence and prosperity. At its heart should be a focus on unlocking growth and productivity. London is a worldclass city, but the differences in living standards across the country must be addressed.
The UK’s companies can help address this challenge. Working with government, they can help build a skills system for years to come, ensure Britain is a leading location for innovation and help renew national infrastructure.
These are the drivers of increasing productivity, rising living standards and growing opportunities for our children. The referendum result gives us a golden opportunity to address them – so let’s get on with it.