Privatize the international trade department, which is slow

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Cutting taxes is always a popular message at election time but, as the great British economist Tim Congdon recently argued, they do not on their own make a nation better. Our next prime minister must step up to win global investment and support Britain’s global champions exporting around the world.

Britain faces the weakest growth of any G7 economy next year, adding to the urgency of launching a vision to win business overseas.

Britain already has an outward-looking export policy framework for ‘Global Britain’, combined with a global network of companies – our ‘Export Champions’ – giving us a platform in major export markets in Asia, Africa, the Americas and beyond. Whoever our next prime minister is, it will be much easier to cut taxes if we make a lot of money from exports. To do this, we need the leadership of No. 10 or we risk losing to our rivals who have the support of their political elites.

These global champions need the assurance and support of a high-level political presence on global trade delegations. The think tank I lead has looked into this and found that the leaders of other major economies are much more likely to support their exporters on trade missions than our own Prime Minister, which will have to change quickly if we want to win this global race for investment. Another major survey of Brits doing business abroad revealed near-unanimous criticism of our efforts to support British businesses. The message is simple for our next prime minister. They must be Britain’s best defenders and become the most prominent champion in business.

But putting the Prime Minister on a plane to sell Britain to the world is only the first step. The new Prime Minister is expected to privatize the British Trade and Exports section of the Department for International Trade from day one. Hand it over to business leaders and give them the responsibility of boosting British trade overseas with new expectations of them for Britain. Our European neighbors have their own similar institutions to feed their own export machine. In Sweden, the organization “Business Sweden” is owned equally by the state and the Swedish business sector. In France, the Team France Export uniquely brings together all the public and private partners working for Business France.

Our research recommends rejecting ineffective information campaigns and putting all our resources into corporate-led missions overseas to win investment. Competing French and Swedish trade missions work better because they force the public and private sectors to work together to win big export contracts.

This model of partial privatization could replicate the course of British International Investment, the government’s development finance institution for which the Foreign, Commonwealth and Development Office (FCDO) is responsible. The then Commonwealth Development Corporation was converted in 1999 from a statutory company to a public limited company, with all shares held by the government. Privatization of the ‘Exports and UK Trade’ portfolio within the DIT would be to allow this part of the department to become an ‘Exports UK’ organization as a limited company, albeit in this case with a half government share and our private exporters.

In addition to the “royal yacht”, better leadership and a new private sector export body could increase support for our export trade missions. Other countries are pulling out all the stops to win investment, their leaders doing whatever it takes to win a bigger share of global investment. The new Prime Minister must lead business in the battle for a global Britain by privatizing the Department for International Trade, packing air miles and doing all they can to bring the money back to Britain.

Dr. Jim McConalogue is the CEO of Civitas

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