The urgent questions facing Europe were the highly topical subject of last week’s Industry Forum roundtable to discuss our research paper, ‘Europe on the Brink.’ In particular, the proposal that European nations should consider creating a new ‘Alliance for Defence and Democracy,’ which could rapidly assume responsibility for the unified defence of Europe. The meeting was hosted by Stephen Hockman KC at his chambers, 6 Pump Court, and the meeting was opened by a strong panel of European experts, Dr Denis MacShane, Dr Jonathan Leader Maynard and Brendan Donnelly, and followed by a discussion involving the businesspeople, diplomats and academics present. The gravity of Europe’s current position was agreed, and the dangers arising from a lack of political unity among the European nations, and serious policy disagreements with the US. Other important factors discussed were that in conventional arms Russia has likely been weakened by sanctions and the Ukraine war while Europe has increased its conventional arms capability. Political developments and initiatives are changing the situation almost daily and there was a view that the existing 34 nation ‘Coalition of the Willing’ on Ukraine, together with initiatives by the EU such as the ‘Security Action For Europe,’ may evolve into an approach which could meet the Russian threat, and also avoid a deep split with the US. This is a crucial topic, with big implications for European businesses and economies. Almost at the same time as our meeting, the German Chancellor, Friedrich Merz was powerfully covering similar points on the much larger stage of the Munich Security conference. The key factors which will influence decision-makers include: the heavy price of US military support for Europe; the need to combat Russian efforts to prevent European unity and split NATO, and how to give Europe a strong independent voice in international affairs. We hope to work with other organisations to address some of these subjects later in the year. We apologise that we didn’t cover the enormous implications for climate change of the major diversion of investment to defence - we haven’t forgotten.

Alert! Dangers ahead for business! This was the unmistakable message from this week’s Industry Forum roundtable on the potential benefits of proportional representation for the UK economy. Anna Dixon MBE, MP for Shipley, a long-term advocate of electoral reform, opened the meeting, which was attended by Industry Forum business members, academics and, as guests, a number of campaigning organisations including Make Votes Matter, Best for Britain and Labour For a New Democracy. The key new factor in British politics is that the old duopoly of power between the Labour and Conservative parties has dissolved into a complex multiparty system. The big risk for business is resulting economic instability as the first-past-the-post (FPTP) voting system turns UK national elections into a lottery. In 2024 Labour were big winners of this lottery with far more seats than their vote share. Next time the winner could be a minority government committed to reversing trade agreements, political alliances and infrastructure investment plans. Such a possible outcome can, even now, paralyse business planning and investment and undermine government growth plans. An alternative system of proportional representation could better represent voter wishes and would moderate policy swings. With the recent example of the severe damage to the UK economy caused by Brexit, this is clearly an issue that UK businesses need to take seriously. Radical change is always hard, but with the current economic and military threats to Europe, and the need for greater European unity, the case for bold action to reform our UK voting system appears strong.

There is potentially a glittering prize for India and the UK in the fast-changing world of 2026 - this is to forge a new and deep commercial relationship. To explore this prospect, The Industry Forum kicked off our New Year programme with a roundtable on ‘Working more closely with India,’ led by Seema Malhotra MP, Foreign, Commonwealth and Development Office (FCDO) Parliamentary Under-Secretary of State for Indo-Pacific. Members and guests attending included business people, academics and diplomats. The discussion ranged over issues and opportunities for building on the existing strong UK/India bonds and the recent trade agreement. It is clear that the FCDO is becoming more commercial and working closely with the Department for Business and Trade to strengthen UK focus on the whole, fast-growing, Asia Pacific region. The UK has important strengths in being stable and trusted in a trade environment subject to volatile supply chains, tariffs and sanctions. UK business people are enthusiastic about the Indian market but need to understand better how government trade and investment plans link to UK industrial strategy. They would also appreciate more government-led trade promotion activity, and guidance on some of the tricky sanctions issues relating to the current geopolitical situation. There is a vast amount to do, and some urgency, to turn opportunities into concrete plans in sectors such as energy, automotive, professional services, recycling and much more. We plan more meetings on these topics.

The Industry Forum assembled a stellar panel to discuss the key question, ‘Does Rachel Reeves’s 2025 budget provide a springboard for growth?’ Leading the discussion were Dr. Jeevun Sandher MP, Parliamentary Private Secretary for the Department for Business and Trade and Trade; Vicky Pryce, Chief Economic Adviser and Board Member at the Centre for Business & Economic Research (CEBR); Wes Ball, Senior Vice-President at Edelman, and Andrew Smith, Chief Economic Adviser, Industry Forum. The roundtable was hosted by the Railway Industry Association and guests were welcomed by James McGowan, Policy and Public Affairs Director at RIA. It is clear that increasing taxes to pay for restoring public services does put a significant load on the economy, but economics is not good at predicting the financial benefits of reducing, for example, chronic problems in access to healthcare, housing affordability and child poverty. It is also possible that the relative stability of the UK economy compared with the US and some mainland European states, and its lighter regulation than the EU may benefit the UK, despite not balancing the long-lasting damage of Brexit. The government’s clear industrial strategy will help companies plan and will increase their confidence in making investments. Inevitably from a gathering of business people some good ideas surfaced. These included greater powers for city/regions with Manchester/Liverpool a prime example; deploying some surplus pension funds for infrastructure investment, and also recognising the potential of our world-leading universities to generate income as well as innovation and research.

The Industry Forum recently addressed the important question of whether pension funds can help finance the essential renewal of UK infrastructure. Lauren Edwards MP, who has Bank of England and HM Treasury experience, led a wide-ranging discussion with professionals from the insurance, finance, construction, energy, telecoms, legal and advisory sectors. Matt Connell, Public Affairs Director at the Chartered Insurance Institute welcomed members and guests to their offices in the iconic Walkie Talkie building, in the City of London. There was recognition that getting the right formula could unlock significant investment but that obstacles need to be overcome. Government action to provide incentives for investment rather than rules mandating investment, would be preferred. To minimise pensioner risks it would be essential to avoid some of the mistakes previously made in setting up unduly expensive public-private partnerships. This would require good dealmaking and contract management skills to balance the strong commercial instincts of contractors. Pension funds not familiar with buying or owning infrastructure assets, could perhaps work together with specialist infrastructure investors to provide matched funds in the way that some development banks operate. This is clearly an area of a big potential to help the government’s growth agenda and a subject to which the Industry Forum will return.

The Industry Forum held a brilliant roundtable on the crucial topic of ‘Delivering the homes that the UK desperately needs.’ Florence Eshalomi MP, Chair of the Housing, Communities and Local Government Select Committee, introduced the topic and led a wide-ranging discussion at the City office of NHBC. Kim Bromley, General Counsel and Director of Government & External Affairs at NHBC welcomed guests including insurance specialists, house builders, architects, planning lawyers, trade associations and others. Everyone present recognised the urgent need for more homes and the enormous task the government has set itself to build 1.5m new houses in the current term. An additional critical current problem is the cost and social damage being caused by the large number of children in temporary accommodation. Some of the other issues discussed included the skills shortage, the mismatch between infrastructure delivery and new housing developments, unintended consequences of net zero targets, and the critical need for HM Treasury to balance short term investment costs with the associated longer term benefits. There was some feeling that the government still needs to improve cross-departmental cooperation for its major missions like housing - an agenda item for Darren Jones MP, Chief Secretary to the PM, perhaps? We couldn’t solve all the problems of UK housing in one meeting and will be holding further meetings on the key obstacles and bottlenecks that need to be overcome by government and industry working together.