This week we’ve mostly been reading the manifesto offerings from the main UK parties. Starting just with the three main parties, these amounted to around 327 pages of policy commitments, pledges and photos. So what have we learned?
1. All manifestos start with the deficit
Literally. The state of the UK’s public finances has featured heavily in this election campaign (again) and all parties have been at pains to stress their plans for fiscal responsibility. Whatever the make-up of the next government it appears that by the end of the next parliament the deficit will be something the UK used to have. While that may depend on your deficit measure of choice, these commitments are nevertheless a positive scene setter from a business perspective.
While the destination for the public finances is broadly the same for all the parties, the length of the journey and the route taken are likely to differ (a bit). The Conservatives have set out a two year timetable of further spending cuts; while Labour and the Liberal Democrats are pledging not to brake quite as hard and have plotted a course that will involve some revenue raising measures.
2. There is some consensus on what’s important for business growth and competitiveness
Moving on to other economic outcomes; growth, jobs, investment and exports will all be getting political attention in the next parliament. The manifestos contain some big ambitions – from the Tory target to be number 1 in Europe in the World Bank Doing Business rankings (we’re currently 2nd in the EU) and create another 2 million jobs in the next parliament to Labour’s pledges on delivering world-class apprenticeships, infrastructure and education.
While some of these ambitions will be easier to prove (or disprove) than others in 2020, the policy levers to deliver them are very much in the same ball park across all three manifestos. Name-checked as important components of a supportive business environment for growth were: supporting innovation in businesses and the research base; competitive taxes; better roads; increased broadband coverage; sticking with industrial strategy; new trade agreements; more help for exporters and devolved powers and funding for local economic development.
EEF can more or less tick off a lot of our manifesto priorities for the next government then….
3. But less clarity on where these priorities sit on a scale of future spending priorities
But saying these are important and continuing to back them with increased public resources is not the same thing. It’s not just the goal of deficit reduction that makes increased investment in some of these areas more challenging in the next parliament, it’s also that all parties have attached a lot of strings to this aim but commitment to ringfences around some rather substantial areas of spending and – in some cases – to promise of even higher levels of spending in areas such as health or education for example.
So come the next spending review – exactly how important for growth and competitiveness will a bigger funding allocation for Catapult Centres and UKTI really be?
4. The light at the end of the skill shortage tunnel seems quite far away
Missing from my list of pro-business policies are the manifesto commitments on skills - of which there were quite a few. So crucial are these for manufacturers that EEF produced a separate manifesto! Employment is growing across manufacturing but these additional skills are not easy to find.
Promises to finally make the UK apprenticeship system employer driven should not only be written in manifestos, they should be carved in tablets of stone. Building a pipeline of young talent with the skills and appetite to succeed in an apprenticeship or STEM degree are also spot on for industry. And in five years or a decade’s time the UK will hopefully have seen a step change in our pool of engineering talent.
But what about the here and now? For companies with an immediate unmet need for skills, the manifestos are less encouraging. On one side there are a number of commitments from Labour that will impact on labour market flexibility and will add to the bureaucratic burden on businesses and from the Conservatives, promises to make it more difficult to attract appropriately qualified people from outside of the EEA risks making our companies less, not more, internationally competitive.
5. Negotiation, negotiation, negotiation
What we also seem to have learned this week is that either manifestos don’t move the polls or the electorate isn’t done reading them yet. With a hung parliament looking likely, the business priorities of the main parties are centred around what exists and works already. This isn’t a bad starting point for any coalition negotiations.