Theresa May’s speech at the CBI conference today confirmed that her government are embarking on a new approach that links economic and social policy her speech set out to build a new ‘social contract’ between business and society at a time of massive change in the economy. She emphasised that the EU referendum result was a vote “not just to leave the European Union, but to change the way our country works – and the people for whom it works – forever.” And that public faith in capitalism and business is at risk unless business and government embraced reform. As a history graduate I was reminded of the case for electoral reform in 1832: reform the system to survive - or face a bloody revolution.
In her speech she confirmed the priorities for her government:
a modern Industrial Strategy, that supports Britain’s industrial strengths and tackles weaknesses – and crucially cerates economic growth in all parts of the country.
A focus not just on start-ups but on scale-ups too (those businesses with high growth potential, able to rapidly grow jobs and revenue)
Reforming corporate governance: including executive pay and accountability to shareholders, and proposals to ensure the voice of employees is heard in the boardroom
Whilst we were expecting the industrial strategy and corporate governance reforms, the focus on scale-ups is new. It reflects a view that the previous Prime Minister sometimes focused too much on start-ups at the expense of those firms that had greater growth potential. It also picks up the great work by Sherry Coutu ( @scoutu ) and others to champion scale-ups. Key elements of the ‘scale up’ strategy announced were:
Longer term finance: Sir Damon Buffini will lead a Patient Capital Review that will examine how to break down the obstacles to getting long-term investment into innovative firms.
strategic use of government procurement to give new firms a foot in the door: with a review of the government Small Business Research Initiative led by Cambridge entrepreneur David Connell.
This is still early days but a direction of travel is emerging that seeks to build a more balanced and long term economy and strengthens the links between business and society. One that resonates with our work of shaping a Vibrant Economy (http://vibranteconomy.grantthornton.co.uk/) here at Grant Thornton.
For if we support free markets, value capitalism and back business – and we do – we must do everything we can to keep faith with them. And with not enough people feeling that they share in the wealth created by capitalism – and with the recent behaviour of a small minority of businesses and business leaders undermining the reputation of the corporate world as a whole – the way to keep that faith is to embrace reform. To do things differently. To recognise that some people – particularly those on modest to low incomes – people worried about the future of their children and their grandchildren – see these forces working well for a privileged few, but not always for them.