RCL Partners LLP
In the second of a three-part series of articles over the summer, Carl Richardson (pictured) discusses the importance of establishing, and then delivering, a medium-term national plan for the UK economy.
“Those who fail to plan are planning to fail” – Winston Churchill
Writing from the perspective of business, it seems somewhat obvious to state that in order to grow successfully and develop an organisation you must first know the direction in which you are heading, and then develop a clear strategy to achieve those aims.
Good plans help businesses to create jobs and prosperity, as well as generating tax revenue to build better schools and hospitals.
Yet, if we ask the question, ‘what does success look like for the UK in 10 years’ time?’ how many people would know the answer, or even the measure of success? Are we looking at economic growth in terms of gross domestic product (GDP), productivity, employment figures, retained membership of the G7 group of the world’s most advanced countries, or a measurement far more intangible than any of those? Would we wish, for instance, to emulate the Himalayan kingdom of Bhutan, which has used the concept of ‘Gross National Happiness’ to measure its development and success since the 1970s?
In recent months the Centre for Policy Studies has felt compelled to set out a 10-point plan for government to help the economy grow out of its current malaise, while the Resolution Foundation has accused ministers of a “lack of long-term thinking in economic strategy”. These are think tanks that lean in opposite ways on the political spectrum, yet the theme around the current lack of an economic plan to help business thrive is clear.
A sense that a different approach is breaking through to the front-line of national politics was evident with Tom Tugendhat’s pledge for a 10-year plan for growth during his recent unsuccessful leadership campaign. Bucking the trend for quick win economic solutions that might appeal to voters, his plan was to move the UK into position as the most investment-friendly tax regime amongst OPEC countries within five years. This would allow businesses to plan with a greater degree of certainty and for a range of initiatives to take effect and bear results. While he was unsuccessful, we must now wait and see what the next Prime Minister may do with such an approach.
The importance of delivery
One of the challenges of our electoral system of government is that our democratic leaders are encouraged to vie for media coverage by announcing new policies or initiatives. Relatively speaking, the responsibility for the successful delivery of a plan comes with less glitz and coverage, and can therefore become less of a priority than the announcement itself. Given this, could it perhaps be timely to look at altering how our excellent Civil Servants are measured, with a greater emphasis placed on the delivery of policy?
The nature of the democratic beast?
The obvious challenge for any long-term political initiative is the nature of our political cycles. These increasingly seem to result in a series of short-term initiatives designed to appeal to focus groups and voters, rather than recognising the value of long-term overarching strategy.
Significant ‘political churn’ clearly helps to fuel a more short-term approach to strategy. Two examples to illustrate this are the fact that three of the UK’s last four Prime Ministers have held office for little over three years, while 12 individuals have held the post of Minister of State for Housing and Planning over the past 10 years. Consequently, it is unsurprising that there has not been greater consistency in our planning and economic development priorities over that period.
Paradoxically, business flourishes when it has sufficient certainty to look ahead, and so surely it is worth exploring ways to remodel our systems to allow a more consistent ordering of national economic priorities regardless of political changes.
The Swedish experience
In 2014 the Swedish government trialled an initiative called the ‘Ministry for the Future’. This policy saw a Minister appointed to lead on long-term strategic initiatives that cut across traditional ministerial silos, such as how Artificial Intelligence might impact on the labour market.
Having a seat at Cabinet and a direct line to the Prime Minister meant that the Ministry for the Future was set up to have influence on its own. It was designed to work both across government departments and with the private sector in a series of working groups in order to ensure it tapped into the best minds available.
The initiative ended in 2016 but certainly gives an example of how some non-traditional thinking around government structures, designed to optimise results, can be implemented at the highest levels. It also echoes a frequent call by our constituency MP, John Spellar, for government departments to foster a greater culture of effective co-working, while moving away from an approach of working in silos that has become the norm in Westminster.
In the past we have floated ideas such as appointing a Minister for FAANGs (Facebook/Amazon/Apple/Netflix/Google). This is based on the fact that their market capitalisation would rank them among the top 20 countries in the world by GDP. We have also advocated keeping Trade Ministers in role for the duration of a Parliament so they can become experts on their briefs.
Furthermore, we have proposed looking beyond Westminster when making ministerial appointments to bring the experience of leading business leaders into Cabinet. This is with an aim to encourage a constant review of how things are done to ensure the UK’s approach to driving the economy keeps pace with an ever-evolving world.
Need for a Royal Commission?
The challenge, of course, is to build a cross-party consensus around what can be agreed upon as national economic priorities. This would be no mean feat coming at a time when political parties seem to be struggling to find a common approach on their own benches, let alone across the political divide. Maybe this is a perfect opportunity for a Royal Commission to circumvent that impasse?
From the perspective of the wealth creating community it would certainly seem to be worth trying to establish a political accord around the prize of thinking and planning longer-term at a national level, allowing greater certainty and more business-friendly conditions.
As business people well know, a failure to innovate and evolve can be fatal to even the most successful of organisations. However difficult it may seem, as a country we should not let a desire for perfect be the enemy of good in terms of outcomes.
Rather, we should think long and hard about letting the nature of political cycles hamper such fundamentals as having a clear national plan to help businesses create jobs and wealth, as well as generating tax revenue. This is all the more important when many of our global competitors are thinking, planning and acting in a far longer time-frame.