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Britain’s politicians are failing to champion UK trade and inward investment because of fears over reawakening old divisions on Brexit, the British Chambers of Commerce has warned.
Goods exports and inward investment have struggled in the years since Britain left the EU, but the UK trade association warned that both Conservative and Labour politicians were still failing to deliver on the promise of “Global Britain” that was made after Brexit.
Martha Lane Fox, the tech entrepreneur and president of the BCC, said that, after years of instability, urgent work was needed to secure the UK’s reputation as an investment partner and trading nation.
“There is sometimes a reluctance among politicians to either recognise problems or suggest solutions, because of how they may be viewed by either side of the Brexit divide. This must stop,” she said.
“Our politicians must be bolder in their decision-making. They must set out a strategy on how we manage EU regulation and — where it makes sense — to diverge so British business can benefit,” she added.
Lane Fox was speaking ahead of the launch on Wednesday of a BCC report setting out how the next UK government should move on from the old Brexit debates and focus on improving conditions for trade and investment.
Since Brexit, UK goods exports have suffered their steepest five-year fall on record, with volumes falling by 7.4 per cent between 2018 and 2023, while the number of foreign direct investment projects in sectors such as creative industries and communications has also fallen, according to analysis by the Financial Times.
Successive post-Brexit Conservative governments have also struggled to fulfil the original promise of “global Britain”, having failed to sign big trade deals, including with the US.
The BCC report includes many of the recommendations set out by Tory peer Lord Richard Harrington in his autumn 2023 review into how to attract more investment to the UK, including speeding up planning and creating a “concierge service” for potential international investors.
As well as calling for more stable policymaking after a period in which the UK has had 15 business secretaries in as many years, the BCC calls for the creation of a minister-led British Exports Council alongside investment in advisory services to help smaller businesses grapple with red tape.
Business groups have expressed frustration that trade has slipped down the political agenda because it raises awkward questions about how to address the past and future challenges of Brexit.
“Trade has been put in the ‘too difficult’ box because it brings up political questions,” said Shevaun Haviland, the BCC’s director-general. “But we need to move past that: Brexit is done, let’s just make it as easy as possible to trade into the EU and the rest of the world and get on with it.”
Chris Southworth, secretary-general of the International Chamber of Commerce, added that trade was a critical part of addressing the UK’s productivity crisis, yet had been “largely absent” from the government’s narrative on growth.
“Now is the time to ramp up efforts on trade digitisation and make trade cheaper, faster and simpler for trading companies, especially for small companies who feel the pain and burden of trade bureaucracy the most,” he said.
The Labour party blamed the “constant chaos” of the recent Conservative government for the UK having the lowest business investment in the G7. It said that if it won the general election it would implement a new industrial strategy, planning reforms and better business support.
“Labour has a plan to make Brexit work and we will back our fantastic exporters by removing the practical barriers to trade through our small-business export task force,” said Jonathan Reynolds, the shadow business secretary.
The Department for Business and Trade said the UK had exported more than £859bn worth of goods and services last year, and had also completed post-Brexit trade deals with Australia and Japan while joining the 11-member Asia-Pacific trading bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
“The IMF predicts that, between 2024 and 2028, the UK will see the third-fastest economic growth in the G7, and we continue working hard to seize post-Brexit opportunities on offer,” a spokesperson added.
Source: Economy - ft.com
