Our growth formula UK business secretary Jonathan Reynolds

Over the last few weeks, we have witnessed a complete reshaping of the global economy. The Prime Minister is right to say that we are living in a new world – one governed less by established rules, and more by deals and alliances.

The UK will rise to meet this moment, because we are proud to be an open, outward-looking, free-trade championing nation – a safe haven for investment, and a great place to do business. We offer today what few economies can: real political and economic stability.

To British businesses – to IoD members reading this – our government can offer something else, too. It’s a willingness to use our mandate in Parliament to ensure your firms can go for growth at every opportunity. We recognise that growth is the surest path to prosperity, to better jobs, to a stronger NHS and public services. It’s the only way we can deliver the change the British people voted for so decisively.

Bold choices

That’s why we haven’t shied away from making the bold strategic choices needed to spur that growth. We have thrown our full support behind a third runway at Heathrow, which is set to create over 100,000 new jobs. And we’re backing expansion plans at Gatwick, London City and Luton.

We’re delivering on our pledge to turn the UK into a clean-energy superpower by the end of this decade (see page 24); giving the green light to new solar projects, lifting the effective ban on onshore wind, and removing planning barriers to offshore wind, which will create 16 gigawatts of homegrown clean power alone.

We have also embarked on one of the most ambitious sets of planning reforms in a generation. To build the 1.5 million new homes we pledged in our manifesto, we’re making it quicker and simpler for developers to build on brownfield land. We’re preventing campaigners from launching legal challenge after legal challenge against developments. And we are strengthening the compulsory purchase process – so important developments that deliver real public benefits can get going without delay.

For my department’s part, we have rolled out a suite of measures to support small businesses, including a new Fair Payment Code and over £1 billion in startup capital through the British Business Bank. We’ve created an expanded Office for Investment, led by our trailblazing businesswoman and tech entrepreneur, investment minister Poppy Gustafsson. It’s providing that seamless journey for our most strategically important international investors, supporting businesses in navigating the complexities of government.

And we have co-launched a National Wealth Fund with the Treasury to invest in the industries of the future and turbocharge growth across every part of the country. With nearly £28 billion of firepower, the National Wealth Fund is driving this government’s Plan for Change and, in just a few months, we have already leveraged £1.6 billion of private sector investment – creating 8,600 jobs.

Strategic sectors

Crucially, we are also developing a modern Industrial Strategy, which will deliver the certainty and stability businesses need to invest in our high-growth sectors and our high-potential places.

We know that over the last 25 years, a third of our highest productivity industries were responsible for generating nearly two-thirds of our economy’s entire productivity growth. So, to ensure that the UK can continue to compete and win in this new, fiercely competitive global economy, we are being clear-eyed about the sectors in which we excel. They are our financial services; professional and business services; clean energy industries; digital and technologies; advanced manufacturing; life sciences; creative industries and defence –
all the areas in which the UK already claims a significant competitive advantage.

Our Industrial Strategy will also show that we are listening and responding to the needs of business, big and small. That’s what underpinned the consultation we launched in October, asking respondents a series of questions about our approach to growth and how we can break down the barriers to investment.

We received over 3,000 responses from a diverse mix of companies, academics, think-tanks, unions and business representative organisations. This feedback has been invaluable in helping us shape policy. Ahead of the Industrial Strategy’s publication, we are continuing to engage with businesses on those more complex issues, including skills, data, finance, regulation, energy prices, grid connections, infrastructure and planning. We are viewing every single one of these policy areas through the lens of promoting investment. The Action Plan this government has set out to ensure regulators and regulation support growth is proof of that. And I would like to thank the IoD for its work in this space – its calls to reinstate a Business Impact Target for new regulation over the life of this Parliament. We have listened and responded with a commitment to reducing the administrative costs of regulation on business by 25%.

International outlook

There is more to come, because we’ve always said that our Industrial Strategy would be international from the start. We said that it would take learnings from the best of what has been achieved globally, so we enable businesses of all sizes and sectors to thrive. We’re delivering on that promise. In March, the foreign secretary and I visited Japan, where we agreed an industrial strategy partnership to support growth and economic resilience in both Japan’s and the UK’s industrial sectors. This includes close cooperation on trade and manufacturing, especially within our space and defence industries where we know there is such tremendous potential for growth.

Our Industrial Strategy also affirms the UK’s commitment to free and fair trade, helping UK companies to export more and break into new markets. This is important because, in recent weeks and months, we have all borne witness to the fragility of global trade. This isn’t about any one country or policy; it’s about a long-term outlook, which is an increasing shift towards regionalisation. We cannot afford to ignore this economic reality.

It’s why our Trade Strategy – set to be published this year – will set out a clear plan to drive resilient growth in the face of these geopolitical challenges. It will take a hard-headed, practical approach to these issues, recognising that free-trade agreements are just one of many tools at our disposal in boosting exports, attracting investment and ensuring that both British businesses and consumers benefit from global trade. Our Trade Strategy will also show how we intend to seize the immense opportunities presented by trade digitalisation, emerging technologies, sustainability and the race to net zero.

In that sense, our Trade Strategy both complements and internationalises many of the aims within our Industrial Strategy. If we take our finance sector as an example, we know that the UK is the second-largest exporter of financial services in the world, behind only the US. Our financial services represent both an offensive and defensive interest. They offer enormous growth potential over the coming years, but they also contribute significantly to the UK’s economic resilience – given that trade fragmentation often manifests itself in the imposition of tariffs on goods, not services.

New partnerships

Where the UK is presented with opportunities to forge a new path on the world stage – delivering real benefits for businesses and cheaper prices for consumers – we will not hesitate to grasp them with both hands.

Our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – or CPTPP – exemplifies this approach. It is an expansive free-trade agreement covering four continents and more than 500 million people – without counting the UK. Our joining means that over 99% of UK goods can qualify for zero tariffs across a bloc which includes Peru, Japan, Mexico, Malaysia and Singapore – many of them are fast-growing economies with a burgeoning middle class.

We want to maintain this momentum – using increased trade to raise living standards and spur our growth mission forward.

It’s why I recently launched a revamped Board of Trade, charged with helping businesses and Britain’s 5.5 million SMEs to boost their exports. The new board includes The Apprentice star and entrepreneur Mike Soutar, BT chief executive Allison Kirkby, and Michelle Ovens CBE, founder of Small Business Britain; every member has been handpicked for their expertise and experience.

And it’s why we’re pursuing high-quality trade deals with partners around the world, including Switzerland, South Korea, the Gulf Cooperation Council and industrial giants like India – which I visited recently to progress talks on our Free Trade Agreement, as well as a bilateral investment treaty.

Better borders

At the same time, we are pursuing a more mature, more level-headed relationship with the European Union. We are, for example, seeking to negotiate an SPS agreement to prevent unnecessary border checks and help tackle the cost of food.

We would also like to strengthen the mutual recognition of professional qualifications so businesses can access the right talent at the right time – whether they’re in London or Lisbon.

We’re making progress in strengthening the UK-EU relationship. The Chancellor is now regularly invited to join meetings of EU finance ministers. When she first attended late last year, it was the first time a British chancellor had been invited to the Eurogroup since Brexit; a clear recognition on both sides that our growth aspirations very much align. We’ve agreed to regular EU-UK summits to bolster our connections on energy, security and the economy, too. The first is taking place in just a few weeks.

And in all this work, we are ensuring that policymaking is being done with business, for business. Since coming into office, one of my priorities as secretary of state has been forging partnerships founded on trust. We’ve done that in our roundtables and mission groups on the Industrial Strategy – and through our Industrial Strategy Advisory Council chaired by Clare Barclay. We’ve done it in our extensive consultation on our Trade Strategy. We’ve done it in all our priority areas. And I intend to continue strengthening these partnerships over the coming weeks and months.

At this time of global uncertainty, I want businesses, investors and the British people to know that this government offers calm, stable leadership for the long-term; stability that drives growth, promotes investment, and ushers in a new decade of national renewal. That’s the change we promised at the general election. Working together with mayors and local leaders, unions, academics and trusted partners – such as the IoD – that’s exactly what we will deliver.