Slashing tax is always a popular message around election time but, as the top British economist Tim Congdon recently argued, they do not by themselves make a nation better off. Our next Prime Minster needs to put their shoulder into winning global investment and backing Britain’s global champions which export around the globe.
Britain is facing the weakest growth of any economy in the G7 next year which adds urgency to kick starting a vision for winning business overseas.
Britain already has an outward-looking export policy framework for a ‘Global Britain’, combined with a global network of companies – our ‘Export Champions’ – giving us a platform in major export markets in Asia, Africa, the Americas and beyond. Whoever our next Prime Minister is, cutting tax is going to be a whole lot easier if we are bringing in lots of cash from exports. To do this we need leadership from No.10 or we risk losing out to our rivals who have the backing of their political elites.
These global champions need the assurance and support provided by a top level political presence on global trade delegations. The think tank I run has looked into this and found that leaders of other major economies are much more likely to back their exporters on trade missions than our own Prime Minister, something that will need to change quickly if we are to win this global race for investment. Another major survey of Brits doing business abroad found near unanimous criticism of our efforts to back British business. The message is simple for our next Prime Minister. They need to lead from the front as the best advocate for Britain and to become the highest-profile champion for business.
But putting the Prime Minister on a plane to sell global Britain is just the first step. The new Prime Minister should privatise the ‘Exports and UK Trade’ section inside the Department for International Trade on day one. Hand it over to business leaders and give them responsibility for boosting British trade abroad with new expectations put on them to deliver for Britain. Our European neighbours have their own similar institutions to oil their own export machine. In Sweden, the ‘Business Sweden’ organisation is owned in equal shares by the state and the Swedish business sector. In France, Team France Export uniquely brings together all public and private partners working for Business France.
Our research recommends junking ineffective information campaigns and putting all our resources into business led missions abroad to win investment. Competing French and Swedish trade missions work better because they force the public and private sector work together to win big export contracts.
This part-privatisation model could replicate the path of ‘British International Investment’ company, the development finance institution of the government and for which the Foreign, Commonwealth and Development Office (FCDO) is responsible. The then Commonwealth Development Corporation was converted in 1999 from a statutory corporation to a public limited company, with all shares owned by the government. The privatising of the ‘Exports and UK Trade’ portfolio in the DIT would take the form of enabling that part of the Department to become an ‘Export UK’ organisation as a public limited company, although in this case with a half share from both government and our private exporters.
On top of the ‘Royal Yacht’, better leadership and a new private sector export body could turbo charge support for our exporting trade missions. Other countries pull out all the stops to win investment, their leaders do whatever it takes to win a bigger slice of global investment. The new Prime Minister must lead businesses into the battle for a Global Britain by privatising the Department for International Trade, packing in the air miles and doing everything they can to bring money back home to Britain.
Dr. Jim McConalogue is the chief executive officer of Civitas