As The Chancellor moved onto the second chapter of his address to the conference, he shifted gear to talk up the UK economy. After seemingly being in the policy shadows for some time, back was the Northern Powerhouse and the Midlands Engine.
The main policy headline was a new £300m investment into the railways of the North to better connect the cities across the region. In his speech the Chancellor raised the points of lower productivity and low wage growth, two concerns that have continued to drag on the UK economy for some time. To tackle this, he argued that parts of the economy needed help and that the Government’s industrial strategy, would help to spread economic growth and build an economy for the future.
An economy for the future and an industrial strategy, two key themes that have a clear focus for the Conservatives. From a policy perspective it is about defending their record and addressing the needs of the business community. In his speech, Hammond outlined how the UK is leading the way on the 4th Industrial Age and is the number one digital economy in the world. This is the view from the top.
But putting your ear closer to the ground and you hear a different tune. Business challenges remain the same and are beginning to sound like a broken record. At a fringe event for entrepreneurs the message was clear: access to skills and access to finance. Speaking with one entrepreneur based in Liverpool it was very clear that these two areas were their greatest challenges as well.
On business funding, it is the gap in being able to scale up that remains the steepest hill to climb. A challenge for policy makers and the business community remains – how do we help a £1million pound business grow into a £20million and beyond? The UK is 3rd in the OECD for start-ups but is only 13th on helping businesses to scale up.
The second challenge is skills. Speaking at an event, Rachel Maclean MP, highlighted the challenge in the economy and education policy of creating the management skills that enable businesses to make this leap.
Skills was another key area discussed by Matt Hancock, MP Minister for Digital, at an event looking at digital disruption and the industrial strategy. Creating the skills for the digital disruption taking place now is essential in ensuring that the UK does not fall behind. Predicting the skills for the future economies and jobs though is a more difficult challenge.
Building an economy for the future is clearly the goal to prolonged growth, at a time when the UK looks to re-define its economy as it leaves the EU. However, there are several gaps to be filled before UK businesses can start to deliver the growth needed.
By Matthew Whitbread