IoD: Labour must be wary of lurching towards jingoistic protectionism

Responding to Shadow Chancellor Rachel Reeves’ pledge “to make, buy and sell more in Britain under a Labour government”, the Institute of Director’s Policy Director, Dr Roger Barker, said: 

“Labour make some sensible proposals for the reform of public procurement. Measures to encourage the greater involvement of SMEs are to be welcomed. Furthermore, an enhanced use of environmental and social criteria in informing procurement decisions will help the UK achieve its Net Zero objectives and more generally encourage a more responsible business environment.

“In addition, the pandemic has highlighted the fragility of global supply chains and the need for greater economic resilience. A greater emphasis on building the capabilities of UK business in important strategic areas is essential.

“However, Labour should be wary of pushing their proposals too far in a jingoistic or protectionist direction. An emphasis on buying British should not be achieved at the expense of delivering value for the taxpayer.

“Furthermore, many British businesses are seeking to compete in a global trading regime, which would be endangered if protectionist attitudes become the norm. Indeed, trying to define what is meant by a ‘British’ company for the purpose of procurement decisions is likely to be highly problematic territory for policy makers.

“What is still missing from policy debates on both sides of the political spectrum is a credible plan for the post-pandemic economy. The Government has abandoned its earlier intention to develop an industrial strategy. Too much of current economic policy making is ad hoc and short-term oriented. Business needs a credible plan through which to realise a sustained, dynamic and green recovery.”