In what was a pivotal general election, Labour won a decisive victory, with new Prime Minister Sir Keir Starmer being given a clear mandate to take the tough decisions needed to unlock sustainable growth.
Since election day, CBI’s chief executive Rain Newton-Smith has been a near permanent fixture in Westminster, briefing the new Labour team about key business priorities and making sure that the business voice is heard across and at the very heart of government. Armed with the CBI’s ‘Programme for Government’, a blueprint for Labour’s first 100 days in power, Rain has been issuing a rallying call to politicians and policy-makers to hit the ground running and really ‘get behind growth’
While I listened in from the comfort of my office in Belfast, Rain was also in attendance at new chancellor Rachel Reeves’ first official speech at the Treasury. Despite not being there in person to hear the UK’s first female chancellor, the significance of her speech was not lost on me, and I was pleased to see Ms Reeves speak so clearly and passionately about making growth the defining priority of government
The chancellor’s speech promised us a “decade of national renewal” and set out the government’s stall around accelerating long-term sustainable growth for the whole of the UK – something very much needed if we’re to raise living standards and deliver the public services we all want.
Her speech had a heavy focus on planning, a huge inpediment to investment and growth in Northern Ireland and elsewhere in the UK. These recent commitments to reforming the planning system are hugely welcome and need to be replicated locally.
She talked about revitalising the construction sector and has set a target of 1.5 million new homes to be built in the UK in the next five years. The chancellor also talked about that much-needed industrial strategy that the CBI has long been advocating for – a long-term strategic approach to backing business, improving productivity and competitiveness cannot be overstated.
While the new government’s growth ambitions are both welcome and admirable, they are dependent on concrete actions being taken to deliver that vision within the next 100 days. Firms are also keen to see progress in other key areas. For example, a net zero investment plan would support ambitions to boost green growth, and a clear business tax roadmap would help deliver stability.
There is little doubt that in recent years, companies across the UK have shown a huge amount of resilience in light of challenging external headwinds. But there are some signs that the economy is picking up steam. The latest GDP data shows that the UK economy saw a decent rebound in sectors such as retail and construction in May – both these sectors had been hit by poor weather earlier in the spring. In recent months, activity has been creeping up across a wide range of sectors and in Northern Ireland the economic composite index was reported to have risen by 1.1% year on year during the first quarter.
A change of government means a fresh start – but the chancellor, like business will face some persistent challenges. In Northern Ireland, these include sluggish productivity, low levels of business investment compared to our international counterparts and, of course, a deficit in both labour and skills.
Meeting a few days after the election with the Prime Minister and his new Secretary of State, Hilary Benn, First Minister Michelle O’Neill and her deputy Emma Little-Pengelly stressed the importance of delivering a long-term budget for the region if we are to make public services sustainable.
To turn the page, this government must get to grips with the long-term structural challenges in our economy. It is clear that no government can solve that ‘triple-whammy’ alone. To deliver sustainable growth and overcome these challenges we must have a new partnership for prosperity. The real work begins now.
Businesses want to see Labour hit the ground running. That requires building early momentum and putting up the institutional scaffolding that will crowd in investment and boost our competitiveness. We know that public finances are squeezed. But we can still shift up the gears on growth without big spending: through bold signals on the issues that matter the most to local companies, including that business tax roadmap, and doubling down on those green growth opportunities.
Through working with business, the new government can realise the economy’s true potential, by making the UK a more attractive place to do business, delivering high-productivity, a highly skilled workforce, driving green growth and strengthening the relationship with Europe. The UK government will need to make headway in all these areas to put the Northern Ireland economy on a solid path to sustainable growth.
The challenges holding back economic growth are not insurmountable. But they do require close-knit collaboration between government and business. The CBI stands ready to help, bringing bright ideas and analysis produced in collaboration with firms from all sectors and connecting politicians with the leading minds in the private sector.
With the election finally over, we need to seize the opportunities on offer and forge a new chapter in our economic growth story.
- Angela McGowan is director of CBI Northern Ireland
