Britain can’t afford to be complacent about growth
The UK has many long-standings strengths, but it’s time to be honest about the fact that other countries around the world are stealing a march when it comes to growth and innovation, says Brandon Lewis
Too often in the UK, we still see ourselves as a great trading nation, built on our history of global mercantilism. A historically dominant force in the world, we frequently think we have retained a soft power that belies our size. I fear though that we have held this lax and arrogant attitude for too long. Today, we are in a difficult situation and the threads of trade and innovation that used to be bound to our shores are coming untied. What’s more, the driving forces of innovation are finding the UK less and less appealing. Without concerted effort by the government to establish a friendly regime, the country’s economic growth will be driven further afield.
Unfortunately, a first and obvious place to start is our high-cost tax regime. From the individual impacts on VAT – with many international shoppers now buying in the EU as a result – to people looking at leaving the UK for more attractive tax regimes in other parts of the world, the winds are changing. One thing is certain, easy global travel and a technologically connected world makes living anywhere more viable now than at any other point in history. The fact is, we have not kept up with these trends or the basic understanding of their impact. Even the briefest look at the global movements of millionaires shows that the UK is suffering a shocking exodus. Some may argue this is no bad thing; some circles hold that being successful is a toxic trait. Yet we must not be wilfully blind to the damage this does. Successful people spend money, build businesses, employ people and pay taxes. If we create a regulatory regime that deters them from the UK, we will lose out significantly and that search for growth will remain elusive for years to come.
Even the briefest look at the global movements of millionaires shows that the UK is suffering a shocking exodus
Much of that growth is now driven by new trade routes created well beyond the UK. The Middle East and Indonesia are areas of recent exceptional economic shifts. Spend any amount of time in the UAE or further afield and you can sense the excitement about opportunity and growth. The plans to utilise and deliver technologically-driven improvements for people via AI and other advancements is palpable. While in the US, the positive outlook for jobs – especially for those in the technology and cyber sectors – is compounded by a dynamic and competitive market highly appealing to investors. Sadly, the same cannot be said of the UK. Instead, our regimes are outmoded, stuck in past ways of thinking and convoluted regulatory regimes that stifle rather than create the conditions for innovative ideas that test boundaries and drive change.
The winds of economic change
We all know our government must plan a wide-ranging industrial strategy that supports and develops innovative sectors to deliver growth and create the jobs of tomorrow. It could start by examining our educational sector; finding ways to ensure students are fully supported in accessing the proper instruction to develop the skills they need to dive headfirst into the world of technology and innovation. Sadly, despite our world-leading research centres, we are not fully delivering on the all-important application of R&D. Take, for example, the telecom industry. We are at the start of a huge period of change with disruptors like Starlink offering new, global possibilities to deliver accessible digital technologies to more people around the world. As more people are brought online, they will interact, trade, develop, share and commercialise new ideas and technologies. This will be transformational for individuals, communities and countries.
The UK should do its best to position itself at the centre of these new digital-driven worlds. Other opportunities can leverage long-standing strengths of our country. We have always been the focus of the world for legal services, international business transactions and contractual agreements. As new technology develops, we need to ensure we stay ahead of competitive inroads this industry faces from places like the US and Singapore who are eyeing our lead. Legal services are worth billions of pounds to the UK economy and support hundreds of thousands of jobs. We can continue to lead the world in this area and begin building our international reputation in others, but to do so, the government needs to signal and ensure its full support. It must foster global agreements and alignments to support legal services, secure commitments to educational advancements and it must put its money where its mouth is to encourage new, innovative industries and the people who build them to see the UK as a natural home.
We can and should be excited about the future for the UK but it requires a bit of honesty about the challenge we must face to get there. In order to move back to a competitive place, we need to ensure we are in the best possible position to attract companies and people who see the UK as a solid, supportive base. This may require some courage from the current government but the prize for our future is worth it.
Brandon Lewis is a former minister and Conservative Party chairman