Competitiveness: The black hole at the heart of the General Election debate
With less than a week of election campaigning left, the issue of competitiveness has been notable by its absence. As it’s the foundation for long-term prosperity, I would like to see the political parties championing this cause.
Being fans of evidence-based debate, we reviewed the major parties’ manifestos and found just a handful of mentions of competitiveness – only three in the Conservative Party’s manifesto, just four in Labour’s and 13 among the Liberal Democrats’ policy promises.
In contrast, words like jobs and growth dominate. For example, the word “jobs” receives 71 mentions in the Conservative manifesto alone, 32 mentions from Labour and 28 mentions from the Liberal Democrats. Crucially, however, these indicators of economic success rely on the UK maintaining its position as an attractive, globally competitive hub. We need voices from across the political spectrum to prioritise competitiveness, for the benefit of the UK economy, trade and investment.
While it appears that the economy is at the centre of this election battle, economic success is the fruit of the competitiveness tree and needs to be given even greater support by the next government.
Put simply, competitiveness is about making sure that the UK remains attractive for businesses to trade and invest, and a place where the best and brightest people want to live and work. It’s the foundation of the UK’s long-term economic success; the reason why London is one of the most desirable cities in a globally-connected, fast-moving world, up there with New York and Hong Kong as a prime destination for businesses and wealth-creators.
So why has competitiveness not been talked about more? Perhaps because it’s complicated and requires a long-term perspective. To be competitive, a broad range of policies need to be blended together, from taxation, regulation and skills development, to immigration and infrastructure. Getting the right tax policies is especially important, as they need to be attractive enough to tempt new foreign direct investment without encouraging a race to the bottom. Infrastructure also has an allure as classy buildings create a global impression, but rail, road and airport links need to function smoothly too or the gloss quickly fades.
Whichever party wins the election, they will need to bolster Britain’s competitiveness. I would like to see policymakers, businesses and regulators working together to make this happen. The current government established the Financial Services Trade & Investment Board, and it is essential that the good work of this group continues as it aims to make sure the sector’s views are heard by policymakers. Given that financial services is the nation’s leading sector for tax contributions, brings in more foreign direct investment than any other sector, and also makes more for the UK in export earnings than other industries, it is important that government policy supports our industry while helping others to grow tall too.
The UK economy continues to recover relatively well, with strong increases in jobs and steady growth helping to maintain our position as a global economic powerhouse. But continued success can only come from remaining internationally competitive. For people and businesses to benefit from ongoing economic growth, the next government needs to nurture, champion and secure the UK’s ongoing competitiveness.
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