City grandees call for long-term economic blueprint

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The next government must seize the opportunity to embark on a major ‘reset’ of economic policy and business strategy, according to some of Britain’s most senior corporate leaders.

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They believe a new framework for growth must include ambitious plans to take the country into the next decade, reaching a consensus and drawing a line under the divisions of the past.

Although Boris Johnson was ousted last week, he is planning to remain in office until the Conservative Party conference in October. Until then, leadership hopefuls will be laying out their plans to boost the economy.

Looking ahead: The next government must seize the opportunity to embark on a major 'reset' of economic policy and business strategy

Looking ahead: The next government must seize the opportunity to embark on a major 'reset' of economic policy and business strategy

Looking ahead: The next government must seize the opportunity to embark on a major ‘reset’ of economic policy and business strategy

Speeches were expected this week from the Prime Minister and former Chancellor Rishi Sunak outlining their economic plans, but the event has now been scrapped.

Marks & Spencer chairman Archie Norman, a former Tory MP and previously deputy chair of the Conservative Party, urged the current caretaker Government to avoid rushing into an ill-thought-through plan despite the worsening economic outlook.

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He said: ‘The country needs a reset. We need to use the next three months to reflect on where we have come since 2016 – since the Brexit vote – and put all that behind us.

‘That means accepting what has happened and drawing up policies that allow the country to move forward and build on our strengths.’

He said Britain has ‘fallen into the trap’ of seeing events ‘through the prism of Brexit’.

‘Every decision is seen as a vindication of Brexit or confirmation that it was not a good idea. Now people need to come together to work out a comprehensive plan for how Britain competes outside the EU. That means a long-term plan for productivity and competitiveness – industrial strategy, if you want to call it that – and it needs to be done with sober reflection about where we want to be as a country, not lurching from palliative to palliative as if government can solve every problem.’

He pointed out that a leadership conference ‘will facilitate debate and discussion’, but noted that ‘early front runners rarely win’. Norman said that meant that the process needs time, ‘uncomfortable as it may be’.

Asked if the country needs an emergency plan to see it through the next four months while the leadership campaign proceeds, Norman said: ‘The danger of rushing in is that the crisis is evolving all the time.

We don’t know how enduring this inflationary period will be and most of the problem is driven by world events to which the Government and the Bank of England cannot make a bit of difference. We do know that consumer spending is going to go into a grinding reverse in the autumn when higher bills and higher prices land on the doormat. But there is danger in reacting to events as they occur to chase popularity and never getting ahead of them.’

John Allan, a former president of the Confederation of British Industry and chairman at both supermarket Tesco and housebuilder Barratt Developments, said a reset ‘is long overdue and hopefully now a possibility.

It would be terrific if the new leader of the Conservative Party would set out a comprehensive strategy that they are willing to commit to for the long term. A broad framework of economic, industrial and social policy that gives everybody in the country clarity about where we are heading.’

He added: ‘Could the different political parties even agree on some basic principles so that businesses know that we are all heading in the same general direction and there is some national consensus about what needs to be done? That would be ideal, but perhaps unrealistic to hope for.’

Many corporate leaders are still smarting from Johnson’s ‘f*** business’ comment in 2018. One senior board director said: ‘Recent times have been dismal on a number of levels. I sincerely hope we can move on. We need to be looking at which of them have sensible proposals and which are prepared to commit to a long-term plan because this is something that is going to take years.’

Starling Bank founder and chief executive Anne Boden said large businesses require ‘certainty’ because they need to invest.

She added: ‘We are concerned that businesses are going to stop making decisions.’

Lord O’Neill, the former chief economist for Goldman Sachs and a former Treasury Minister, said last week that Johnson leaves ‘no real economic legacy’ other than ‘one of utter confusion’.

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