One thing most politicians agree on is the need to increase growth in the economy. To put more money into people’s pockets by creating higher paid jobs. To increase productivity and generate the wealth to fund our public services.
With this week’s Investment Summit and the upcoming Budget we will soon be able to judge how committed the government is to its self-declared priority to boost growth. Of course, the announcements by businesses of billions of pounds of investment into our economy at the Summit are to be welcomed. They build on the success of the UK over the last decade in attracting inward investment – last year the UK was again Europe's second-biggest destination for foreign investment.
In recent weeks, I’ve been visiting companies who are investing and exporting successfully. On Friday, I was at the Port of King’s Lynn looking at progress on a new £7 million storage facility for an international customer which represents the largest investment in the Port’s history. During my recent visit to Guy-Raymond Engineering which distributes 20 million high quality products to medical, educational, and other sectors in over 40 countries They told me their export growth was strong. New figures from Visit West Norfolk also show strong visitor numbers over nearly 10.5 million trips and tourism and hospitality was worth £565 million to West Norfolk.
There is however unease among businesses generally about what might be around the corner which is reflected in the most recent Institute of Directors’ survey showing business leader confidence falling and investment intentions at their lowest level since 2020.
That’s perhaps unsurprising with a Budget coming on 30 October where it seems likely Labour will break a manifesto commitment and put in place higher taxes on jobs by increasing employer National Insurance. Capital gains tax also looks set to rise. We have also seen anti-business rhetoric from Labour ministers almost lead to the loss of £1 billion investment. That came off the back of wide-ranging French style union laws which run the risk of adding to businesses costs and harming employment prospects rather than improving them.
Over the last 14 years, 800 jobs a day were created on average and having a flexible labour market is a key reason for that. Measures were introduced to encourage higher levels of business investment which is essential to boosting productivity. And the UK successfully grew and attracted hi-tech, innovative companies.
The test for the new government is to build on those economic strengths, to increase investment, and foster a pro-growth environment for companies. Let’s hope the Prime Minister and Chancellor recognise higher taxes on jobs and investment are not consistent with promoting the economic growth we want to see.
