With not much else to offer, Reeves pitches ‘stable’ UK to Davos elite
The Canadian PM and former governor of the Bank of England, Mark Carney, told an audience at Davos yesterday that “the old order is not coming back,” and that “there’s been a rupture in the world.”
He said the structures we took for granted have been replaced by “a system of intensifying great power rivalry where the most powerful pursue their interests, using economic innovation as coercion.”
This gloomy declaration came just days after he went to Beijing to strengthen ties with the communist superpower in light of what he called “the new world order.” It seems to have passed him by that China has been “using economic innovation as coercion” all over the world for years. Perhaps it’s only bad when Donald Trump does it.
But while Carney tries to lead the enlightened into a brave new world, Rachel Reeves has been making a more understated pitch to the Davos crowd, saying “In a volatile world Britain stands out.” According to the Chancellor, Britain is the home of stability.
And she’s right, up to a point. Britain is indeed the least drunk person at the bar, but I wouldn’t let it drive.
Labour has not been a friend to business
America is unpredictable, France can barely muster a government, Germany is in recession and the wider EU is more concerned with regulating bottle caps and phone chargers than it is in driving genuine growth. So Reeves is right, when viewed alongside everyone else the UK does look quite attractive, even in light of the dozen or so u-turns carried out by this government on everything from welfare spending to inheritance tax and ID cards. And that’s to say nothing of the rampant uncertainty generated by the chaotic approach to Budgets and tax policy.
Still, this week PWC’s Global CEO Survey had the UK second only to the US as the most attractive destination for international investment. This is nothing to sniff at. The government has thrown its arms around big tech and made some good progress in cutting red tape. It’s promising big reforms to the planning system and has signed off some major infrastructure projects. All good stuff.
Unfortunately, PWC also found that UK-based CEOs are gloomier than they were last year, and wider business confidence measures tell the same story. On balance, this government has not been a friend to business and the tax-happy Chancellor must take responsibility for that, and for the dire levels of economic growth over which she is presiding.
So there’s a slogan for UK PLC: “We’re not great, but at least we’re stable.”