Protectionism ‘not the way forward’ – IoD responds to Corbyn ‘Build it in Britain’ speech

Responding to Jeremy Corbyn’s ‘Build it in Britain’ speech in Birmingham, Stephen Martin, Director General of the Institute of Directors, said:

“Protectionism, it seems, is back in fashion. For all the criticism of America’s current approach to trade in this speech, the proposals of subsidies and ‘buying British’ are just as protectionist as tariffs. While Labour’s Brexit position recognises the value of some kind of customs union with the EU for manufacturing, there is little understanding of how crucial imports are for that sector. Our trade balance should not be treated as a zero-sum game that governments can or should try to control.

“Britain has many fantastic manufacturing firms, but the fetishisation of factories and production lines over all other parts of the economy is misguided. We should not be ashamed of our world-class creative, digital and professional services.

“While our members are keen to see a long-term industrial strategy adopted by all parties, the emphasis must be on creating the conditions for growth, not government dragging the economy in its preferred direction.

“Public procurement processes certainly have room for improvement, but the overriding aim must be ensuring that these contracts are delivered with the right balance of quality and cost. Moves to shut out foreign companies and investors cut against efforts to build our reputation as an open and outward-looking country, and could throw a spanner in the works of negotiations with the EU.

“Protectionism is not the way forward for post-Brexit Britain. Attempts to shape the economy according to an idealised view are prone to failure. Instead, politicians must recognise the benefits for everyone of open, liberal markets, and work with businesses of all sectors to address the issues that are thrown up in terms of skills shortages, infrastructure failings and regional imbalances.”