The helium-filled Airlander aircraft in a giant airship shed on February 28, 2014 in Cardington. Photograph: Getty Images.
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How to build an innovation economy

Backing tech, thinking global and reducing the tax burden for entrepreneurs will make Britain an economic world-beater once more.

The UK finds itself at a crossroads. With the economy now recovering strongly – as seen with buoyant GDP figures for Q1 on Tuesday – the dark days of the crisis might seem to be behind us. But as the Chancellor said in the Budget, we must face brute economic facts.

Though the view from the boardroom window on the top floor of UK plc may be sunnier, the continuing scale of the structural deficit effectively means there’s a fire in the basement. Despite very tough efficiency savings and cuts to rein in public spending, we are still running a serious deficit and accumulating debt. The rescue job is not yet complete.

Following the crisis, the key question of our time is how the UK can become the crucible of innovative approaches to public and private sector efficiency? I believe the only way we are going to get UK plc afloat again is through the power of innovation in both our public and private sectors to drive a new age of productivity and competitiveness.

First, we must continue to embrace the technological revolution to shake up existing markets. In tech, that means unleashing the power of the revolutions in IT and telecoms, digital media, genetics, data analytics and clean-tech solutions in energy, finding the twenty-first century’s equivalent of electricity or the invention of the internet, a new space race for the defining technologies of our age. As the Chancellor said in a landmark speech in Cambridge last week, it is about becoming the "best place to innovate".

We then need to think about how we innovate in terms of selling our products and services. Fundamentally, we need to turn our focus from the sclerotic eurozone to emerging markets. The western European nations are all grappling with the same structural weaknesses – and a currency and banking system weighed down in bad debts. We cannot afford to sit and wait for the eurozone alone to drive growth. We have to go and trade with the faster emerging markets, the BRICs and N11.

In my field of Life Sciences, for example, the emerging economies are driving vast new markets in food, medicine and energy. In food, we will have to double global food production with much less land, water and energy. In 30 years the exploding populations of these nations – who today need the basics of public health, nutrition and energy – will demand the modern biomedicines, Western foodstuffs and clean-tech that only their elites enjoy today. Far from giving up on emerging markets, such needs show why our exports are more sought after than ever.

To do that we need to make the UK the best place in the world to come and start a new business. That’s why for the last three years I've been advocating a "New Deal for New Business": if you’re starting or growing a small business, employing people and generating sales turnover, government should get off your back. No employers' National Insurance – a jobs tax. No VAT – a value tax. No regulations designed for big companies.

During the 15 years I worked in start-up venture capital, I was always struck by how many first-time entrepreneurs underestimated their turnover, and spent vast amounts of time and stress and accountants fees worrying about complying with government bureaucracy. Get off their backs and let them grow and we’ll find that they hit the threshold for tax that much quicker. Such a policy would be simple, clear and potentially revolutionary in its effect.

This Parliament has been about saving the UK from becoming another Greece. The next Parliament will be about making Britain an economic world-beater once more – investing, exporting and manufacturing more. Backing tech, thinking global and continuing reducing the tax burden for entrepreneurs are just three ways in which that can become a reality.

George Freeman is Chair of the 2020 Conservative Innovation Economy Commission, and a UK trade Envoy. This is an edited extract from 'The Modernisers' Manifesto’, published by Bright Blue

George Freeman is the MP for Mid-Norfolk, Government Adviser on Life Sciences, and Chair of the All Party Group on Agricultural Science and Technology

Photo: Getty Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.