We are in the run-up to the most unpredictable election of the modern age, having also experienced a seismic shift in the economic and technological environment. But what does this mean for business, and what can policymakers do to create a competitive market for UK firms within an ever-changing global arena?
Today, we are hosting hustings for the leaders of dynamic mid-sized businesses to discuss with Vince Cable of the Lib Dems, Nick Boles of the Conservatives, and Labour’s Chuka Umunna how this can be achieved. The challenge I would set for any new government is to build a vibrant economy, which is open (to talent and trade), enterprising, innovative, connected, and inclusive – and to do so in partnership with business. This means:
Regulation fit for the future: UK and EU laws and regulators were largely designed in an analogue world. The regulatory environment is already out of step with technology and disruptive change in markets.
A fair and simple tax code: we have the most complicated tax code in the world, creating unnecessary costs for business and government, and opportunities for aggressive avoidance and evasion by others. We need a radical review of the UK tax code to create simplicity, certainty, clarity and efficiency.
Twenty-first century infrastructure: we have a Victorian railway map and a broadband network which traces an older telephone network. Greater rail connectivity in the North could unleash growth by joining up cities and towns and opening up freight, and we need to start anticipating the infrastructure for a future of electric, driverless cars. UK broadband speeds are lagging international competitors.
Skills and education: our system is still grounded in a Victorian focus on knowledge and a post-war assumption that university is the best career path. The most valuable skills in the future will be agility and people skills.
Sustainable financial markets: the events of 2008 and since have exposed issues of culture, trust and resilience in financial markets and hindered their ability to provide efficient capital for growth. A new paradigm is needed for sustainable financial markets, embracing technology and looking at the role and purpose of audit as well as culture change and resilience.
A Global UK: Britain faces a rising trade deficit, and only 25 per cent of UK firms export. We must become a truly global trading nation, and that also means being open to talent from around the globe.
There is one more essential ingredient to successfully building a vibrant economy: trust. In the UK, just 52 per cent trust business (still higher than the 43 per cent who trust government), and family-owned firms are much more trusted than “big business”.
Business is at its best when innovating to provide new and better services and products. But without public trust, such innovation will not be adopted. And while our surveys show that companies see regulation as an increasing hurdle to growth, distrust of business means the public believes there is not enough regulation. More worryingly, the UK is well behind the global average in terms of both trust in institutions and trust in innovation. Restoring integrity is an imperative.
We have seen the rise of more agile and dynamic firms (such as the B Corps movement in the US and elsewhere), which have a social and environmental purpose and are innovating in how they connect with people and stakeholders. Government and business need to work collaboratively to restore trust and support such models.
Visit our General Election poll tracker to see how each party is faring in the build-up to 7 May.