David Rutley MP: Business needs To rediscover Britain’s trading roots

David Rutley is the Member of Parliament for Macclesfield, Damian Green’s PPS, and a member of the Free Enterprise Group.

The latest GDP figures are encouraging. But with the UK’s improving competitiveness, why aren’t British businesses exporting more?  We have been importing more than we export for nearly 30 years.  More particularly, this is a deficit in goods.  In services, we enjoy a surplus of some £70 billion; in traded goods our deficit is £100 billion.  And where we export to is also imbalanced: just 4 per cent of our exports go to the huge, growing consumer markets of India and China.

The good news is that HSBC forecasts that UK export growth to Asia over the next few decades will be an average 9 per cent a year compared to just 4 per cent to Continental Europe. Half of this growth to Asia is expected to be in industrial machinery and transport equipment, with UK chemicals and pharmaceuticals “managing to remain internationally competitive by innovating new products, improving quality and driving up efficiency.”  This is important as we have become over-reliant on exporting to traditional markets in America and the EU. 

However, in the current world exports league, Germany is 2nd only to China. The UK is 12th – having plummeted from 5th place just a decade ago. This leaves us firmly behind smaller EU members, such as Belgium and the Netherlands. In fact, our exports in goods have grown by an average of just 2.8 per cent over the last decade, slower than both France and Germany. Whatever problems may be associated with EU regulation, it’s not stopping other Member States from exporting. This points to a domestic exports challenge: one that is an urgent priority to address.

David Rutley MP: It's not just the size of the state that matters, but its shape

David Rutley is the Member of Parliament for Macclesfield, Damian Green’s PPS, and a member of the Free Enterprise Group. David spent many years in business as a senior executive in companies such as Asda and worked as a Special Adviser at the Treasury during the last Conservative government.

In Hamlet, it is famously said that “Something is rotten in the state of Denmark”. The evidence suggests that this is no longer true.

Nordic nations demonstrate that while the size of the state is certainly a critical dimension, the shape of the state and the fitness of its institutions are also vital to performance. The likes of Denmark, Norway and Sweden may not have been at the top of the Olympic medal table, but they are able to point to solid economic performance and efficient, trusted public services at a time of global economic uncertainty.  

Scandinavian countries put aside their Viking reputation centuries ago. Today, they would shy away from being labelled anything like “Celtic Tigers”, viewing themselves more like industrious bees. Understated perhaps, but efficient and ordered in the way they run the state and innovative in how they have embraced market-based solutions in delivering public services.

This may seem surprising from countries which have historically been better known as big state spenders. But things have changed in recent years. As a Conservative, I am much more sceptical about the scope of the state than my cousins in Denmark (my mother is Danish) and I enthusiastically support the aim of lower Government spending in the UK. That said, I have learned that it pays to take a closer look at how the state is being reshaped in Scandinavia.

David Rutley MP: One year on – Why the Emergency Budget will be remembered as a “game changer”

David Rutley has been MP for Macclesfield since the 2010 general election and was a special adviser at the Treasury during the last Conservative Government.

Today marks the first anniversary of George Osborne’s Emergency Budget. It will certainly be remembered for robustly tackling the record budget deficit. But its reputation will become bigger than that, because it also started a shift in the debate on public finances away from spending and cuts to how real value for money must be delivered for taxpayers. That is why it will be seen as a rare “game changer” in the way that government expenditure is measured, managed and even talked about.

We have seen other “big” Budgets before. Geoffrey Howe’s 1981 Budget tackled the rapid inflation that was wreaking havoc in the economy at that time. Nigel Lawson’s 1988 Budget significantly lowered the tax burden for individuals and created greater incentives for businesses to invest in the UK.  However, no other Chancellor in the last fifty years faced a budget deficit of the scale that confronted George Osborne after the election. He was bold and did not duck the challenge.

The Comprehensive Spending Review in September last year built on that foundation and set out the details of how the Government would bring spending under control and achieve its fiscal mandate. This decisive action plan has won international backing and plaudits from the IMF and the OECD among others. Out on the doorstep during the local elections, I found a pragmatic acceptance that strong action is needed. One year on, the principles underpinning the Emergency Budget are continuing to win the argument on how the deficit should be tackled.