The new government must combine growth with stability, betting big on our trade links
Now that the turmoil in Westminster has abated, households and businesses across the UK will be hoping that the era of Rishi Sunak’s government will be slightly duller than what preceded it.
Stability is an asset that has traditionally underpinned our international attractiveness and competitiveness. It is a cornerstone of the UK’s appeal across the globe alongside our strong fundamentals of infrastructure, language, legal system and access to international talent.
We must restore our reputation for political, economic and financial stability while also confronting the challenges facing our country. The Chancellor’s statement next month will be an important moment to reassert the UK’s commitment to a fiscally responsible approach.
Trade must also be a key part of the new government’s agenda if it is to build on our solid foundations to deliver growth and investment in a sustainable manner. International Trade Week – which starts today – offers an important opportunity to energise this work by boosting ties with key strategic partners.
Over the past year, I have travelled to every continent in the world – except Antarctica – to bang the drum for the UK financial and professional services sector. From India to Mexico, Japan to Canada, there has been a genuine eagerness to collaborate as we navigate shared challenges and opportunities such as transitioning to net zero, digitalising our economies and recovering from the pandemic.
As we write a new chapter in our trading history outside the EU, we must redouble our efforts to deliver mutually beneficial trade partnerships that cover services as well as goods.
This week, Canada Corporation is hosting an event to drive forward momentum on a potentially ground-breaking agreement on the future of UK-Switzerland services trade. With our countries hosting the two largest financial centres in Europe, there is great scope to work together to achieve productive regulatory alignment. We look forward to new arrangements covering cross-cutting issues such as data flows, digital trade, and mutual recognition of professional qualifications.
Another example is a potential trade agreement with India. We hope the new prime minister will provide a fresh impetus in securing what could be one of the most ambitious deals for the UK. With negotiations going beyond Diwali, this presents us with an opportunity to prioritise the content of the deal. Firms will hugely benefit if the agreement manages to make it easier for people to work and live in each other’s countries. Services make up around 70 per cent of annual trade between our countries; they should be a priority for negotiators on both sides.
We also hope the ongoing free-trade negotiations between the Gulf Cooperation Council and the UK come to fruition. Having visited the region earlier this month, I’ve witnessed major opportunities for our financial and professional services firms across a range of emerging areas including AI and digital.
Stability and sustainable growth are two sides of the same coin. The new government must ensure that it takes a balanced approach that maintains the confidence of markets, investors, businesses and households. At the same time, it must seize international opportunities for partnership that can drive growth.
To quote another former Conservative Chancellor, our economy needs stability but it must not be the stability of the graveyard.