A “whole economy” approach

By | Business
Theresa May at CBI Conference. Credit@flickr

Following its largest consultation of members since the EU referendum, the Confederation of British Industry (CSI) released a statement emphasising the importance of a “whole economy” approach ahead of the UK-EU negotiations, in order to answer the needs of all sectors of the economy and protect their interconnections. The CBI calls on the Government to consider the complexity of the modern economy where numerous businesses are linked to each other, where many products come with complementary services, supply chains may overlap across borders, and various companies operate in multiple sectors. Commenting on this subject, Carolyn Fairbairn, CBI Director-General, said: “Businesses in every corner of the UK are rolling up their sleeves as they prepare for life outside the EU and are committed to making it a success. Leaving the EU will be a highly complex process, and all sectors of the economy are making their priorities clear in order to get it right.”

The CBI’s consultation with businesses across the country seems to reveal their determination to get on with the job of delivering the goods and services which keep the British economy moving forward. At the same time, firms appear to also be exploring how the choices the UK and EU make together over the coming months and years may impact them – directly through rule changes, effects on employees or the choices of international investors or indirectly through the fortunes of customers, suppliers, and the industries which enable everyday activity. For example, airlines and the wider aviation sector, which employ nearly one million people, may seek reassurance on maintaining the smooth transport of holiday-makers, workers and goods post-Brexit. Companies in the chemicals and plastics sector, which export towards £30bn worth of products each year, may seek clarity on access to skilled employees needed at their plants. Construction companies, which build the UK’s homes, roads and rail in a sector worth over £100bn to the UK economy, seem interested in the potential costs of importing materials. Meanwhile, the creative industries, which employ nearly 2 million people across music, film, video games, architecture and more, appear focused on the future of Intellectual Property and data flows, as are life sciences businesses, technology companies and other sectors.

As the modern UK economy seems to be ever more interconnected, legislation in one sector may have a knock-on effect in many others. For example, any business handling data or having an online presence may be impacted by future digital regulations, extending outside technology companies. Therefore, the British Government has the chance to work out a Brexit plan to deliver an outcome which meets the needs of firms throughout the UK, including elements such as a barrier-free relationship with the EU, a clear plan for regulation which provides certainty in the short-term and in the long-term balances influence, access and opportunity, a migration system which allows businesses to access the skills and labour they may need to deliver growth, a renewed focus on global economic relationships with the business community at their heart, an approach which protects the social and economic benefits of EU funding and a smooth exit from the EU. For its part, the UK Government may best approach this process in partnership with industry, ensuring continued engagement with companies in every sector. The Government may also use this chance to improve UK’s competitiveness before the country leaves the EU.

As businesses are a source of economic growth, jobs and opportunity, the way the UK shapes its new relationship with the EU and the rest of the world seems to be one of the business community’s leading priorities. Government has the opportunity to take ambitious steps to place the UK in the best post Brexit position possible. In turn, the business community may aid this process, offering ideas on skills, tax, innovation and infrastructure, which may help attract prosperity to all.

What economic strategy may deliver the best results for the UK post Brexit?

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