Dear Prime Minister,
As the world awaits the next step on your Brexit deal, it's time to think about how to maintain prosperity and bring the country together. How will you build the "high-wage, low-tax, high-skill, high-productivity economy" you described in your speech to the Conservative party conference last month?
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You can strike out "low tax", of course, with your promises to splash the cash on schools and other vote-winners. But please do demand some quid pro quos for your largesse.
Reform is always easiest when you're spending. Get the National Health Service to prioritise prevention, so your upgraded hospitals don't just fill up. Abolish the overbearing Independent Office for Police Conduct or your 20,000 new officers may be reluctant to use their stop-and-search powers.
I hate to say it, but we Brits are as good at excessive bureaucracy as Brussels. Despite the "bonfire of the quangos" lit by your predecessor David Cameron and his minister Oliver Letwin, Britain is littered with watchdogs that have been captured by industry or passed their sell-by dates. Tax loopholes don't help: do make time to meet with the Office of Tax Simplification.
We won't copy Singapore on fiscal policy, but we should emulate it on regulation. Intelligent regulation is not laissez-faire; it is proportionate, cost-effective, and, where possible, it supports competitiveness. The UK's financial services will face more global competition after Brexit. Yet neither the Financial Conduct Authority nor the Prudential Regulation Authority consider the competitive position of our financial markets in their decision-making.
There are legitimate concerns about systemic risk, in the wake of the 2008 financial crisis. But prioritising safety over growth dampens innovation, and leads to an overly cautious approach to capital. Why not ask your chancellor to emulate the US Treasury secretary, Steven Mnuchin, and review the competitiveness of the UK's financial regime?
Leaving the EU will put Britain on a war footing. We need to be as nimble as our Asian competitors, not ponderously digging a few more multimillion-pound inches of our ill-starred high speed rail project. I've opposed HS2, given its unconvincing cost-benefit analysis.
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But you need to make a cast-iron commitment that people can plan against. If I were you, I'd prioritise the northern stretches of the line and Northern Powerhouse Rail can boost the clean growth strategy.
I would also stop Whitehall's futile attempts to lure jobs to lower-productivity areas. Focus instead on helping people commute by improving road junctions. That would help tackle the nurse and teacher "deserts" that diminish our public services in some deprived areas. So would building homes for nurses on spare NHS land. The Treasury won't like that idea, but it's the right thing to do.
In your speeches, you often extol British scientists. But too many of their brilliant ideas still disappear into a valley of death, invented here but commercialised in other countries.
Technology transfer has improved markedly at some universities. But we still don't match the US for technology licensing, the rapid scale-up of businesses, the treatment of postdoctoral researchers or even thinking its normal for professors to have start-ups.
The UK should be a world leader in personalised medicine, capitalising on our prowess in pharmaceuticals and helping patients benefit from genome sequencing and clinical trials.
But we need a national effort to boost the collaboration between the NHS and the life sciences industry. Singapore built a biotech hub from scratch in only 10 years: it now has a vast network of public and private laboratories, and the world's shortest approval time for clinical trials. We need to match that if we are to keep scientists who fear the loss of research grants.
You rightly seek to drive up productivity by transforming investment. Central to that will be restoring business confidence, which has taken a big hit over the past three years.
Beware of delegating this task to the business department and expecting results. You need a high-powered bureau to attract foreign direct investment and dissuade companies from moving their headquarters. You also need to signal clear long-term ambitions and stick to them.
If the referendum achieved anything, it exposed the deep grievances of citizens whose standards of living have been bypassed by globalisation. People who have worked hard and played by the rules have seen their wages stagnate and their children's prospects overtaken by rentier capitalists.
So how about a citizens' wealth fund, ringfenced to prevent a Treasury raid, which could make long-term investments and give people a clearer stake in society? The 2017 Conservative manifesto proposed a version of this, funded by revenues from shale gas and public asset sales. You could go further and consider a wealth tax, as the economist Stewart Lansley has proposed. After all, a stable economy is one that works for everyone, not just the rich.
How you square wealth taxes with courting business, I leave to you.
Incidentally, nothing I've suggested requires Brexit to happen. It's a red herring, rather like that kipper you brandished when you wrongly claimed that British packaging rules on fish came from the EU.
After Brexit, don't imagine you can delegate meetings with business leaders. And don't, whatever you do, underestimate the sluggishness of the British state.
Written by: Camilla Cavendish
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