Ahead of the Budget, TheCityUK has proposed targeted measures to boost sustainability, productivity, competitiveness, secure future skills and increase diplomatic resources to help capitalise on services-focused trade deals around the world. These are all vital to building an economy that incentivises innovation, attracts investment and acts as a dynamo for growth and jobs across our country.
Key points from TheCityUK’s budget submission:
Partner with business to advance sustainability goals: The government should work with business to ensure that the right incentive structures are in place – ones that are sufficient for businesses to promote sustainable investments over non-sustainable ones. It should establish joint industry working groups to focus on international cooperation and agree consistent methodologies for measuring the effectiveness of national initiatives in addressing climate change.
Digital infrastructure – go further and faster: The existing speed and availability of key infrastructure in the UK, such as broadband, lags most other leading financial centres, putting at risk growth, attractiveness, and the ability to innovate. The government should deliver on its promise to work with industry to target a minimum of 85% gigabit capable coverage by 2025, but should seek to accelerate roll-out further to get as close to 100% as possible. Efforts to accelerate roll-out to meet this target earlier than 2025 would help ensure that digital infrastructure is not a barrier to the UK’s economic recovery. Efforts to rollout of 5G connectivity should also be more ambitious and include places outside the main urban areas where it is already available.
Create a simplified, competitive and predictable tax regime: The government should strongly consider tax simplification, rethinking certain taxes rather than applying short-term patches which create further complexity. For example, the UK’s tax code runs to over 17,000 pages; in contrast, Hong Kong’s tax code is less than 300 pages. A stable and consistent approach to tax policy will have a positive impact on inward investment and the overall attractiveness of the UK’s business environment. The government should develop a long-term, strategic approach to taxation in the UK, producing a ‘Tax Roadmap’ to help businesses plan for upcoming changes.
Work with industry to meet skills needs of the future: TheCityUK’s pre-Budget submission highlights that 30% of financial services workers have said they need more digital and technology expertise to fulfil their roles as a result of the pandemic. Government investment in skills and training needs to be aligned with the skills needs of business. It should also be accessible so that the training opportunities that are taken up deliver the greatest possible impact. Reskilling in areas of technology, data, sustainability, and remote and digital tooling will help future-proof the UK domestic workforce against future crises, and strengthen the competitive position of the industry internationally, allowing it to make an even stronger contribution to the domestic economy.
Greater investment in diplomatic resources: The future prosperity of the UK will be highly dependent on forging effective new trading relationships as an independent trading nation. Diplomacy, trade policy and international development need to be seen in terms of long-term value creation and the projection of soft power. The UK’s vast network of diplomatic missions is a national asset and investing to maintain and strengthen resourcing should be a priority. This investment should include the deployment of specialist staff who have a deep understanding of some of the UK’s key export sectors within relevant missions. The UK’s future prospects will also inexorably be tied to its ability to exert influence in global forums, shape global standards, and advocate for the reinvigoration of the rules-based order. The UK’s multilateral missions (e.g. UKMIS, UKDEL) will have a leading role to play in achieving these aims and investing in their resourcing will also be crucial.
Emma Reynolds, Managing Director for Public Affairs, Policy and Research, TheCityUK, said:
Making the most of global opportunities and enhancing the UK’s competitiveness, while ensuring all parts of the UK can share in future economic growth will not happen by accident. The UK’s future lies in being a highly-skilled, competitive, innovative and green economy. In this sustainable vision, people will be our greatest asset, and digital infrastructure our most important tool.
“Ministers must have a laser-like focus on ensuring people across the UK have the skills and digital infrastructure they need to innovate and create value. The Lifetime Skills Guarantee is a welcome start – but success will require persistence and a long-term partnership with industry to drive wider UK competitiveness and progress towards sustainability goals.”