As we begin 2022, British business is looking for security. For the past six years, the country’s businessmen and women have faced uncertainty, in part due to Brexit-related parliamentary shenanigans and more recently due to the government’s handling of the pandemic. Announcements, lockdowns and ever-changing rules have caused many businesses to close, and placed others under severe strain despite the recovery. In 2022 the government must focus its attention on moving beyond Covid-19, resolving outstanding Brexit issues and going for growth.
We cannot as a society and as an economy continue to live from jab to jab. We have to move beyond the pandemic mindset and pandemic policy. The overwhelming majority of people in the United Kingdom are vaccinated and the booster programme is a huge success; 2022 is the year we must learn to live with Covid. We cannot change the practices of the economy with new restrictions, or ongoing changes to how we live our lives every time a new variant emerges. Freedom cannot be subject to a vaccination and coercion must cease. The government must commit now to allow business to return to normal with no new restrictions just as we have learned to live with the flu.
The country has amassed an enormous amount of debt as a result of the government’s interventions in the economy during the pandemic. That debt needs to be paid down or we need to turbocharge the British economy. Businesses are ready to step up to innovate and invest if only the government would create the conditions for that to happen. The Chancellor, Rishi Sunak, is introducing tax increases this year. They should immediately cancel those tax increases and the UK should abandon the global commitment for 15 per cent Corporation Tax. The UK must be the number one destination for investment and businesses; to do that we must have a globally competitive tax rate.
Significant obstacles to unleashing the British economy remain, not least the Northern Ireland Protocol which essentially entraps Northern Ireland in the orbit of the European Union. The government currently cannot diverge significantly from Brussels standards, as it will simply serve to highlight the fact that Northern Ireland has been ceded to the European Union. As long as the existing arrangements are in place, Britain as a whole will not be able to diverge. The DUP has called on the government to set a deadline for the Protocol talks. This is absolutely right because until that is resolved Britain is still in regulatory chains. The United Kingdom voted to leave the European Union; the government should tear up the Protocol and focus on growing the British economy.
Once the protocol has been removed, immediate deregulatory steps need to be undertaken to unleash the engines of the British economy. By removing unnecessary EU regulations that are imposed on all British businesses despite their trading status, we can expect the UK economy to increase its productivity and experience increased growth over the coming decades.
The government then needs to get on with its levelling up agenda. At present existing funding allocations seem to focus on delivering pet projects in MPs’ constituencies, many of which will have very little impact on the overall rate of economic growth. Levelling up needs to ensure that every region of the UK increases its productivity and is able to compete with other parts of the world. To do this the government needs to focus on working with the private sector to rapidly upgrade British infrastructure and connectivity, as well as reform the UK planning system to accelerate house building and encourage investment. The government needs to take advantage of the low interest rates we are experiencing and borrow to invest in the areas of high return.
Critical to our economic growth, levelling-up and global influence is the rebuilding and reshoring of the British manufacturing sector. One of the biggest challenges facing the sector is increasing energy costs and the government should move to slash Value Added Tax (VAT) at the earliest opportunity to support the sector. An examination of expensive levies to support green investment should also be reviewed to see whether the consumers are getting value for money and whether the subsidies green energy enjoys are actually delivering reliable energy supplies for businesses and families. Along with costs, the government needs to assess its strategic dependency on an unreliable and autocratic China, which is reaching a dangerous level. The government needs to work to reshore industry back to the UK and ensure conditions are favourable, including through the use of exchange rates, to make investment in light manufacturing profitable in the UK once again.
Britain is now operating independently in a globally competitive market. Nobody is going to give us favourable terms because of what we once were. When our politicians laud our natural advantages, language, geography and history they really are saying they have no plan to make Britain boom. We are like any other nation; a competitor, and we must ensure we have the advantage and the cutting edge.
To that end we should adopt the line taken by Lord Palmerston in the pursuit of our interests: “We have no eternal allies and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.” Our interest is growth because with growth comes power. To achieve that we must be prepared to undercut other nations in tax policy, diverge from the European Union to boost growth, and we must remove our dependency on China by creating conditions in the UK where levelling-up becomes a reality and investment profitable.
We should pursue these aims bullishly without doubt or concern. If we do, we can make the British lion roar once more.
Brendan Chilton is co-founder and Chief Executive of the Independent Business Network. He was also General Secretary of Labour Leave during the European Union referendum, and has served the people of Ashford since 2011 as a local Councillor.