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Boosting infrastructure is key to curing economy of virus ravagesMay 3, 2020
Ministers must support an enterprise-led renaissance to avoid Britain sharing the fate of the Venetian Republic
Unlike the well-documented progress of Covid-19 itself, we are only just starting to measure the scale of the damage it has wrought on the economy. Factories lie idle, many construction sites are empty and our high streets resemble film sets where everyone has been given the day off.
Business metrics that usually move only in small increments now lurch downwards in the 10s of percentage points. Car sales were down 45pc in March and advertising spend – a lead indicator of the real economy – is expected to fall by half for April.
The state is paying the wages of more than three million people. Millions more self-employed people expect to get state support from next month.
There is no vaccine or immunity that will restore the strength the economy was showing before the pandemic. The Government has done its job of flattening the infection peak; recovery will take a similarly determined effort and it is imperative to now start that without further delay.
Fortunately, a blueprint for success already exists. The Conservative election promise was to unleash Britain’s potential by being the best place to start, grow and run a business through lower taxes, better infrastructure and new free-trade deals around the world.
There was a prescient focus on both broadband and mobile connectivity, as well as on cutting red tape and tax cuts for smaller businesses.
Whitehall needs to turn its focus to deliver this with an unaccustomed zeal and intensity. The good news is that as a result of the crisis, the barnacles have been well and truly knocked off the hull of government. We need more of this: ministers engaged and in charge, with sleeves rolled up and the naysayers being rightly sidelined or choosing to isolate themselves.
Business leaders who have stayed open during the crisis tell of delivering innovation in weeks that would normally have taken years and meant a battle with Britain’s weak productivity growth, as well as unnecessary regulations.
The Treasury and HMRC have surprised themselves with their ability to design and execute interventions at scale and speed – protecting the capacity of the economy but also proving the case for a radical shift to the digital delivery of government via the excellent gov.uk infrastructure.
As ministers deliberate this weekend, they should remember that every additional day the phone rings unanswered in lockdown Britain is an order lost to an overseas competitor whose own economy is open for business.
Our standard of living depends upon exports; they make up almost a third of our GDP and without them we will be forever poorer. Students of history know the flow of global trade readily adapts itself to new channels, with the risk that the UK shares the fate of the Venetian Republic.
Fortunately, Covid-19 has not depleted any of our natural advantages: a strong adherence to the rule of law; a flexible and educated workforce; sitting between the Asian and American time zones; and with English as our own but increasingly the world’s language.
Today, fewer than one in 10 British firms export. Our objective must be to double that number over the next five years, pursued with the determination of a health secretary chasing a ventilator supplier.
To hit this target, we will need a significant expansion in the country’s export infrastructure: our trade representatives, promotion activities and grants to get businesses exporting for the first time, all powered by a slew of new free-trade deals.
Above all, we must remember that to rebuild the economy, the only way is an enterprise-led renaissance.
It is businesses that will create the jobs, opportunities and prosperity that will restore our nation’s financial health.
Andrew Griffith is the Conservative MP for Arundel & South Downs and the former chief business adviser to Prime Minister Boris Johnson
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