Key issues

Both the main UK political parties have identified low growth as a key factor holding back investment in infrastructure and public services. The Conservatives favour a low tax, low regulation solution; Labour favours industrial strategy and a business partnership approach.

Brexit has caused a major loss of trade with the EU and entering alternative markets has not yet replaced the lost EU trade.

The previously neglected issue of UK military security has become much more urgent following the full-scale invasion of Ukraine by Russia. The need to strengthen the UK armed forces has become more important and significant opportunities have arisen for UK defence companies.

Our entire economy is built on energy but consumption of our traditional carbon based fuels needs to be reduced rapidly to combat climate change. Nevertheless, the Russia/Ukraine war has demonstrated our continuing dependence on fossil fuels and has diminished commitment to the renewable energy transition. It is clear that this reduced commitment can only be a short-term approach nationally and globally.

The finite nature of the world’s resources of land, minerals flora & fauna has become increasing obvious and the serious risks of unsustainable consumption. Therefore, the UK will need to address the gradual economic changes this will entail.

The public overwhelmingly approve of public services such as the NHS, education and local authority provided services including social housing and social care. Low growth and austerity policies have, however, reduced the funding for such services and led to dissatisfaction and some economic damage caused, for example, by long waiting lists for the NHS. Economic prosperity and social harmony are both dependent on the next administration tackling these issues effectively.

The UK has a stubborn, long-term productivity problem. This has worsened, since 2008, compared to other G7 countries. It needs to be addressed to provide funds for infrastructure investment, public services and to attract private sector investment.

Governance in large UK organisations appears to have deteriorated severely in recent years. Examples include the Post Office Horizon scandal, the Carillion collapse, the behaviour of the privatised water companies and the behaviour of the government and Civil Service demonstrated by the Partygate scandal. The Conservative administration proposed tightening company law and audit reforms but then backed off. Nevertheless, the governance issue needs to be addressed for the sake of economic efficiency, investor confidence.

The UK economy needs major investment in physical and human infrastructure. However, until growth improves such investment cannot be afforded by the state and is not attractive to the private sector. A new approach is therefore required to provide infrastructure investment. This may need to be based on a taking a longer view of the investment cycle for productive investments.

High value-added growth and the associated high-quality jobs can only be produced by a highly skilled and trained population. For many years now there has been a focus on extending academic, university level education but progress on the skills training and apprenticeships that are also needed, has been less successful. The UK has wonderful schools and universities, a great record in scientific research and some high-performing technology companies. Bringing this all together to train and retain a workforce with world leading skills could provide the engine needed to rebalance and re-energise the British economy.

Economists are largely agreed that Brexit has meant the loss of some 5% of UK GDP. It has also probably damaged the much larger EU economy. Furthermore, the Brexit referendum occurred when the security risks to Europe from Russia were not so apparent. Opinion polls indicate that a majority of the UK population now considers Brexit a mistake. While, rejoining the EU is not an immediate option, it is obvious that closer and more harmonious trade and security arrangements should be explored.