Tony Blair has issued a call to arms – but will Labour listen?
Tony Blair’s blockbuster intervention is a reminder of a time when the government believed business was part of the solution to Britain’s problems, says Steve Rigby
For entrepreneurs, looking back can be anathema. Everything is about the future – the next customer, the next acquisition, the carefully-plotted route towards a big-money exit.
But for those of us who run businesses, it was difficult not to feel a pang of nostalgia following Sir Tony Blair’s blockbuster intervention last week. Recollections may vary, but it reminded me of a time when businesses were seen as part of the solution to the UK’s economic and societal problems.
And yet sentimentality, even for a second, is a mistake because Blair offered real clarity in a debate that is too-often clouded by ideology and a lack of understanding about how the economy works.
The prime ministerial hopefuls are right that Blair’s essay lightly touches on inequality, but you do not right inequality by taxing to extinction those who produce the country’s wealth. You secure it by ensuring more citizens have gainful employment derived through increased investment, high salaries driven by a strong and competitive economy, through confidence and hope and leadership on the issues that will drive growth.
At the heart of Blair’s argument is the thesis that Britain taxes too much, builds too little, regulates too heavily, underinvests in technology, tolerates low productivity and discourages risk-taking. Take the temperature of business leaders on this and you will find resounding agreement. But this is not nostalgia for the period of prosperity Blair was fortunate to lead. These are the defining challenges of our time.
Whole of government failure
Most of these problems span two decades. This is not a Labour issue alone but a whole of government failure. We have placed blockers, trap doors and diversions throughout our economy that have stalled competitiveness, productivity and growth. The changes to national insurance, minimum wage and employment rights in the last 18 months have added further headwinds at precisely the wrong moment. This directly affects the performance of companies from tiny start-ups to high-growth scale-ups and giant multinationals.
When we also consider the Alan Milburn review on young people and work, published last week, it is no wonder we face a despondent generation, already set back in their education by Covid, burdened by student debt as interest rates rose and now confronted by the prospect of AI reshaping the jobs market before they have even entered it.
Blair’s call for a revised agenda rooted in growth, led by technology and AI, anchored in infrastructure, energy security and public sector reform is a clear direction. But if this is to be our direction, it must become something close to a religion. These objectives must usurp all others. They must be our true priorities. Our north star.
Instead, Blair identifies the opposite tendency at work: redistribution-first politics, anti-business rhetoric, ideological net zero policies and welfare expansion without productivity reform. The two visions could not be further apart.
Blair’s overall thesis rests on five imperatives. Fix weak growth with a pro-enterprise agenda. Fix low productivity through state redesign and the adoption of innovation and technology across the public and private sectors. Improve competitiveness through less regulation and more infrastructure spending. Return to political stability, with governments given the time to govern. And above all, improve living standards, which can only be achieved through sustained growth.
His comments on AI are where the argument is most powerful. “AI will displace jobs as well as create new ones. Companies and countries will rise or fall on the back of it.”
We are watching the train leave the station, but we are not yet fully on the journey. Britain must not be a passive passenger with no idea of the destination. We should be building the tracks, driving the train and setting our own course.
Blair cites AI as the most important of his recommendations. He states plainly that “those who understand it will see their countries prosper; those who do not, will not”. He calls for a reorganisation of the whole of government around the harnessing of the 21st century technological revolution.
That last point is critical. The Tony Blair Institute has set out what this means in practice: a reimagined state that is data driven, preventative rather than remedial and built around the citizen rather than the institution. It means a new cadre of technically skilled people running departments, AI embedded across every area of public spending and a long term commitment that survives changes of government.
For those of us on the outside running businesses, this is encouraging, but only if it is acted on. This is a timely call to arms. Many of us in business have been waiting for exactly this kind of growth-oriented leadership. Now we need government to match the ambition.
Steve Rigby is the co-chief executive of Rigby Group