Badenoch: The Future of the Economy

Kemi Badenoch, speaking today at British Chamber of Commerce Global Annual Conference said:

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There are two competing visions for the future of the economy in this election.

One of them is that government knows best.

The other, is that business knows best.

I am here to champion the latter vision: the Conservative Vision. As Secretary of State for Business and Trade, I have repeated the same line in all of my speeches. And I'm going to do it again today. Government doesn't create growth. You do.

What government needs to do is create the right environment for entrepreneurs to thrive - and then get out of the way.

That is the Conservative vision. We celebrate aspiration and provide opportunity.

And we remember a fundamental principle, which is that for every decision, there are always trade-offs.

Every action has an equal and opposite reaction.

You raise taxes, people change their behaviour.

You increase regulation and people find loopholes.

We know that every decision taken has an opportunity cost.

People might see a business that closes because it was no longer profitable.

Nobody sees the business that never starts, or the investment never made, because an

entrepreneur decides it is too difficult.

Business knows best.

It's why our manifesto's 10-point plan for business is based on the meetings we've had with the British Chambers of Commerce, the Federation of Small Business and hundreds of organisations and companies, large and small.

You told us access to finance is an issue so we will ensure that bank capital requirements legislation like Basel 3 does not inhibit lending to SMEs which is currently happening.

You told us that high street businesses have a huge disadvantage compared to online ones.

So, we will continue to ease the burden of business rates for the high street, but there has to be a trade off.

So, we are increasing the multiplier on distribution warehouses that support online shopping.

You told us that reporting requirements are too burdensome. I agree, I hate admin.

So, we are using the freedoms from not having to follow EU regulations to lift the employee threshold, which means more companies can be considered medium-sized. This is expected to save businesses at least a million hours of admin per year.

Business knows best. That is our offer.

But there is an alternative vision for the future of the economy. The Labour vision.

One that believes that actually Government knows best and these pesky businesses need to be controlled.

The Single Enforcement Body in their manifesto with trade union and TUC representation will be thought police chasing companies up and down the country. And as they say, with powers to launch proactive and targeted work against employers.

That is a manifesto commitment that thinks business is the problem.

Their vision assumes that business only wants to exploit employees.

They don't understand that business already knows that you have to treat workers well in order to retain them. 

Despite Conservatives already doing a lot on employment rights, bringing in flexible working and shared parental leave Labour are fishing in this empty barrel for more.

Their ‘New Deal for Working People' adds over 70 new regulations or requirements for you to follow at a cost to you and your staff.

Just this week the IFS said that close to all of the cost of Labour's reforms will be passed through to lower wages.

That's what trade-offs mean for you and your employees.

You probably heard lots of ok-sounding policies this morning but look closely at what is in their manifesto. I have and you should be really worried.

Their vision of the future economy is one that micro-manages your business to meet their political objectives. That includes the divisive agenda of identity politics.

And I'm never going to shut up about that, no matter how many Doctor Whos say so.

Identity politics is why Labour's biggest change is to introduce a new Race Equality Act.

In their manifesto they say they will enshrine in law the full right to equal pay for ethnic minorities. But you know and I know we already have laws that do that.

This is going to be much more political.

A law that will be used to work out what people of different ethnicities should be paid.

And they'll be checking on you.

You will have new mandatory reporting on ethnicity pay gaps, which their new enforcement body will be inspecting closely.

It's all there in their manifesto. I'm not making this up.

Of course, the Race Equality Act and their other 69 new regulations would be great for job creation for compliance consultants and employment tribunals. But that is not the route to improving productivity or delivering real economic growth.

Labour's proposals divide the country into black/white, rich/poor, old/young – because they see people as target groups not as individuals, and they see you as greedy exploiters not wealth creators.

I think classifying your work force by race and having this influence their salaries is morally repellent.

It's what they did in apartheid South Africa and what they do now in China and Myanmar.

We should not be going anywhere near this stuff.

Those are your two visions for the future of the economy.

Now I am not naïve. During an election period, a government needs to stand on its past record, not just on what it's going to do next time.

So what is our record after 14 years? It is always important to be straight with people. I never pretend that everything has been perfect. But here are some facts.

This has been the toughest decade and a half for business globally. After the financial crisis, we managed the economy and had to tighten our belts.

But that's what meant we had enough to get us through a global pandemic we are still recovering from.

We've been challenged by a war in Europe that has raised energy costs at the same time as we decided to deliver Net Zero, a trillion-pound project, which I know is a cost to business.

And we've done this while delivering an exit from the European Union which the people voted for.

It has been a time of extreme turbulence around the world, but we have kept the economy stable, brought down inflation and are forecast to grow faster than France, Germany, Italy, and Japan over the next 4 years.

Labour want you to think all of the turbulence is down to Conservatives.

They want you to think that because they've also had 14 years.

They've had 14 years to think about why they lost the last 4 elections.

They've had 14 years to come up with answers to some of the West's structural problems.

How do we create growth with an ageing population and low birth rate?

How do we compete against economies like China and India?

How do we secure our borders in an age of mass migration while ensuring we still get the best and brightest from around the world to work here?

After 14 years, they don't know. That's why they want you to think these problems, are Tory problems.

They want you to think everyone will become younger, and China will be nicer if you just vote Labour.

That's why after 14 years, of not knowing what to do, their solution to these problems is to bring in a Race Equality Act, and more workplace regulations to control you and of course. More taxes!

Don't surrender to Labour.

I'm happy to stand on our record of listening to business and delivering for you.

Since 2010, we've increased the number of businesses across the UK by over one million. There are almost four million more people with a job since then. The employment rate is much higher.

Labour always leave office with higher unemployment.

Labour would undo all the reforms we made to ensure that public services weren't at the mercy of trade unions pursuing political agendas. Their manifesto ramps up union power in the private sector.

Let's look at our international record. Since the referendum in 2016, the UK has grown faster than Germany, Italy, and Japan and at a similar rate to France.

Our services exports are at a record-high of £472 billion, we are the world's 2nd largest services exporter and 4th largest exporter over-all.

And where there have been trade frictions we have removed and simplified tariffs on thousands of goods, that our exporters had been facing in key markets like the US.

We replicated almost all of the EU's trade deals, agreed new ones with Australia and New Zealand and joined CPTP, a trade bloc that will deliver growth to the UK for decades to come.

And of course, we have the world's most comprehensive free trade deal with the EU itself.

If re-elected, we would do even more. The unions don't like free trade agreements, as we've seen in the US.

I am not saying everything has been perfect, but we are doing our best to deliver what people voted for and where there are problems, we are unpicking them day by day.

From the Conservative and Labour manifestos, we can see there are clear dividing lines for anyone who cares about business and enterprise.

The Conservative Party believes entrepreneurs know how best to run their business.

Conservatives know that economic growth and rising living standards come from flourishing businesses and dynamic entrepreneurs – not from red tape, race monitors or compliance consultants.

A Conservative government will deliver the balanced and fair regulations that protect working people without stifling growth and innovation.

By contrast, a Labour government would micromanage and control businesses for political objectives: bad for the economy, and bad, for our wellbeing and social cohesion.

That is the choice we face next week on the future of the economy.

Conservatives believe in capitalism, we believe in the power of business to do good, we don't think profit is a dirty word and we are optimistic about our future.

Yes, there has been a lot of global uncertainty, we are working day and night to keep our economy growing.

Now is not the time for more uncertainty by handing the economy to Labour.

Things are looking up.

So today I want you to ask yourselves - Who is best to help your business prosper in what should be a time of great prosperity?