The Prime Minister made a bold statement last week. In her closing speech to the Conservative Party Conference in Birmingham, Mrs May spoke of "[a] quiet revolution” which took place “in our country just three months ago – a revolution in which millions of our fellow citizens stood up and said they were not prepared to be ignored anymore.” In this, the Prime Minister drew a mandate from the Brexit vote for launching her programme of social justice within the UK. Brexit may not just mean Brexit.
There were two parts of the Prime Minister’s speech which really piqued the audience, noticeably so to those of us inside Symphony Hall. The first was the warning to tax avoiders, and professional service firms who advise tax avoiders. Mrs May said the government would be putting them on warning. The second was the mocking of politicians and commentators who find the general public’s “patriotism distasteful, [its] concerns about immigration parochial, [its] views about crime illiberal, [its] attachment to […] job security inconvenient.” As a political point, it went down very well. And the audience lapped it up.
However, Mrs May is by no means anti-business. Not only did the Prime Minister state it is important for capitalism to change and adapt to survive, Mrs May also firmly understands that a society that works for all is one underpinned by a solid economy. Notwithstanding the views of the politicians and commentators mentioned above, as Mrs May was delivering her speech, The City UK published a report in which it considered the economic impact of both a post-Brexit UK which retains passporting and equivalence, and a post-Brexit UK without any regulatory equivalence. In the former scenario, The City UK estimates a revenue decline of £2bn, the risk to 4,000 jobs and a decline in tax revenue by £0.5bn per annum. In the latter scenario, the estimates increase to -£20bn on revenue, -35,000 on jobs and -£5bn on income to the exchequer. To take this into consideration is neither distasteful nor parochial. Economists and weighty political commentators have already insisted that economics will kick in and drive policy soon enough. Indeed, on the same day Mrs May’s comments were made, the British chemist, Sir Fraser Stoddard, who was being awarded the Nobel prize, said he was “very disturbed by the talk coming out of the UK at the moment” and “[a]nything that stops the free movement of people is a big negative for science.”
Party Conferences are important opportunities for political parties to draw together the faithful, and to reach out to potential supporters through bold statements of vision. Regardless of the rhetoric in that vision, businesses should continue to engage with government on the critical economic drivers which will lead to jobs and prosperity for the country. The Industrial Strategy has not yet been written. As Mrs May told Conference: "Philip Hammond and Greg Clark are working on a new industrial strategy to address those long-term structural challenges and get Britain firing on all cylinders again.” Businesses should decide and demonstrate to government how they can play a part in this, whether identifying how they contribute to the overall strategic growth of the economy, or how they support UK plc in its bilateral and multilateral trade relationships.
In playing its part, Business needs to appreciate that the political imperative is currently strong but to remember that the underlying drivers of economic growth remain critical for government, as The City UK’s research shows. Government will also benefit from effective engagement by Business to help it understand how best to maximise its position in Brexit negotiations. The European Commission is only really focused on the preservation of the Union. National leaders and the Council therefore need to be armed with evidence and solutions from their own constituencies, as well as understanding when they have sufficient political cover to move. This means it vital for the UK to ally with overseas interests as quickly as possible. But the benefit is not only for the economy and the government. Businesses which fail to do this will lose out because the Government will need to pick its fights and this means picking the sort of businesses it is going to fight for. With Article 50 being triggered in under six months, the time to engage is now.
*Robert is a partner in the firm Davidson Ryan Dore. He is not an employee, consultant, partner or agent of Hogan Lovells International LLP. Davidson Ryan Dore is a strategic communications consultancy that is working alongside Hogan Lovells on some matters relating to the UK withdrawal from the European Union. Davidson Ryan Dore is not authorised or regulated by the Solicitors Regulation Authority.