The UK is a “global exporting superpower” with the potential to grow further, with service exports at an all-time high. That’s the story told in the manifesto published earlier this week by the Conservative Party.
Today (13 June), the Daily Update drills into the document for a better understanding of the party’s pledges on trade.
FTA focus
The manifesto promises to “complete free trade agreements [FTAs] with India and the Gulf Cooperation Council”, which it describes as “home to some of the world’s biggest investors”. The government has been seeking an agreement with India in recent years, but negotiations stalled in recent months over disputes around visas and national insurance contributions for Indian workers in the UK.
Also among the targets for negotiation of FTAs are Israel and Switzerland. An agreement making it easier for financial services firms and individuals in that sector to make transactions was struck between the UK and Switzerland at the end of last year.
In the upcoming review of the EU-UK Trade and Cooperation Agreement (TCA), the party states that it “will take a tough approach” that ensures the EU “are meeting their commitments” and not “discriminating against our exporters”.
SME support
Echoing the priorities of other parties at this election, the Conservative manifesto gives particular attention to the concerns of SMEs. In a ten-point plan for small business, the party pledges to “keep the VAT threshold under review” and to “explore options to smooth the cliff edge at £90,000”.
The plan also includes provisions for improving SME access to finance, which include the expansion of the Open Finance framework and the creation of ‘Regional Mutual Banks’. Companies will also be taken “out of the scope of burdensome reporting requirements” by lifting the threshold of employees to allow more companies to be considered medium-sized.
Digital invoicing would also be promoted under the party’s plans, while enforcement of the Prompt Payment Code would also be improved.
Port power
Freeports would be expanded, the manifesto adds, building on the existing 12 sites in the programme. The party argues that it has so far generated just short of £3bn in investment and sets out plans to expand further with an application round in the next Parliament.
Councils will also be enabled to “retain all business rate growth within a defined zone for 25 years”, which the manifesto states can be used to finance new infrastructure or local industry. Investment zones will also receive continued support, which it says would give areas “£160m to catalyse local growth and investment”.
Regulatory reform
The manifesto also promises that the party will use “Brexit freedoms” to deliver “regulatory reform”, stating that “we want small business to innovate, balanced with proportionate protections for consumers and working people”.
While the party says that it will “transform the UK regulatory landscape”, it says it will “never introduce Labour’s package of French-style union rules”, and will instead “deliver the best outcomes for business, consumers and the environment”.
There are also plans for reform of government spending and the civil service, the latter of which would be returned “to its pre-pandemic size” to supply the funds for an increase in defence spending totalling 2.5% of GDP.
Defence development
That expansion in defence spending will “prioritise growth in UK industries” with a new ‘Integrated Procurement Model’, which the party argues will make procurement in the sector “faster, smarter and more joined up”. Private sector investment will be boosted “by confirming that ESG considerations are entirely consistent with investment in our vital defence industry and transform innovation”.
The party also states that it will improve productivity in the sector and expand its exports. It sets out a new target to become Europe’s largest defence exporter by the end of the decade.