Vision for Britain needed amidst the crisis

Today’s global economic picture is undoubtedly a grim one. With the second lockdown until 2nd December, the national mood has numbed. And with a double-digit drop in GDP and resulting unemployment heading back towards 3 million, the outlook for Britain is exceptionally challenging. But I passionately believe that it is not a time to despair and resign ourselves to years of decline. Instead, remembering that innovation often flourishes in the most difficult of times (think of the great companies like Disney, General Electric and Microsoft that were founded during recessions), Britain requires an urgent ‘Reboot’ in terms of its industrial strategy. If we can define a clearly articulated vision for the future, with a coherent Net Zero Build Back Better Strategy, we can create growth, high value jobs, power the regions, and fuel exports as a basis for broader, collective prosperity. And we’ll do so in a world where the permanent global crisis (as opposed to the temporary Covid-19 crisis) will be climate change. Today marks one year to COP26 when the UK hosts the UN Climate Change conference in Glasgow. In a series of 3 blogs I will outline the immediate steps I believe we need to take to achieve this goal which shape a longer-term strategy.

Covid-19 has set the Government on the back-foot of open-ended emergency rescue packages. The Government appears overwhelmed with every sector lobbying from Andrew Lloyd Webber to entrepreneurial restaurant owners, for state support. I feel great sympathy for them as they watch their businesses tail-spin. But we need to transition from a seemingly chaotic and tactical crisis management approach to a proactive Government vision, strategy and plan to rebuild Britain with full support from Business and citizens. It is clear that pure capitalism has failed in this pandemic and this provides a platform for the Government to take the initiative and define a new partnership of public and private sectors where the profit motive is one factor in broader service of stakeholders including employees, communities and the environment. Given the failure of ‘hard core’ capitalism, there is an opportunity for the Government to embed NetZero throughout the Build Back Better strategy. It is a time for common sense and the Government to recruit leaders with competence, experience and substance to plan then manage the prosperous paths out of the crisis.

The impact of Covid-19 has been particularly brutal on certain sectors such as hospitality, leisure, travel/tourism and aviation. However, emerging from Covid-19, it’s really important for Government to be selective on interventions, to demand conditions from business/industry bodies and plan strategically with some bold ideas (ironically, this is perfect timing with new ‘open’ world with the exit of the Customs Union). Imagine how transformational it would be if this Covid-19 crisis sowed the seeds of radical new thinking for a clear vision for Britain. In this context, I would suggest it’s time for ‘zero based’ thinking to create the plan for Britain led by the Government to build a powerful public/private coalition.

So, what does this mean in practice? In short, what is the coherent industrial strategy for Britain (shared across all stakeholders - Government, investors, business, citizens, industry groups, trade unions)? Let’s call this the Build Britain Back Better strategy. To determine this, we must identify the core sectors which will be vital to Britain’s success in the world. This is not about ‘picking winners’ but it is blindingly obvious that certain strategic sectors for the UK economy and Government could shape and mobilise private sector activity, investment and entrepreneurship. Furthermore, this crisis is screaming for the Government to show leadership and direct the public sector to align with the private sector with a clear vision for the future supported by a strategy and plans. The learnings from the Covid-19 pandemic should be embedded within the strategy. One successful example during my tenure as Chief Operating Officer of UK Government during the Coalition years was the shifting the power of Government procurement. From 2010-15, of the ￡42bn that Central Government spent annually on goods & services, the spend with SMEs increased from 6% (￡2.6bn) to 25% (￡11bn) in 2015. An unexpected consequence was that 95% of this Government spend went to UK based SMEs (paying UK taxes) which was a turbo boost for SMEs, job creation and the regions. Back in 2010, the fantastic innovative Belfast based, Kainos had a handful of professionals working with Government. Now a successful public company, listed on LSE, Kainos is heading towards a thousand consultants helping the public sector innovate and deliver. 

There is a strong domestic multiplier where the UK has a core sector which supports an ecosystem of growth. The agenda on in-sourcing reliable domestic capabilities on things you need (either in a crisis or as ‘BAU’) – for example, PPE and ventilators. When you outsource this you pay an upfront price but you also play a “dependence premium” that has been cruelly exposed by COVID with time lags, sitting to be at the bottom of the global demand queue and ultimately over-paying. Additionally, if the UK invested in truly world beating sectors with products and services, these could be the centrepieces of an export-led growth strategy.

With the UK’s chairing of G7 and hosting COP26, it would be powerful to embed NetZero innovation throughout the Build Back Better strategy as appropriate. Therefore I thought it would be helpful to highlight a small selection of sectors which would be central to the Build Back Better Strategy: Creative Industries/Digital; Advanced Manufacturing; Agriculture; and Construction, to encourage the debate and the Government to work with industry to focus on the sectors that will move the needle for long-term prosperity and competitive advantage. This will be the subject of my next blog in the series.

It may seem bizarre to consider the plan for prosperity with a Vision for Britain immediately before Lockdown 2. However, this is exactly the right time to build the coalition of the willing and the crisis is the catalyst. I am simply calling for a coherent Build Back Better Strategy to shape Britain’s prosperous future. The ideas above are not revolutionary. Instead, they represent pragmatic thinking – in short, common sense - about where the Government can quickly lend its support to encourage growth across sectors that are key to the UK economy and in ways which will drive collective benefit for all UK citizens.