It is the brave people of Ukraine who have suffered the most at the hands of President Putin’s brutal and illegal war. We are all, though, feeling the impact of Russia’s bloodthirsty invasion of a sovereign state on the European continent. The weaponisation of energy by Putin has led to skyrocketing household bills across Europe and the UK is not immune to rising global wholesale energy prices. Food prices also soared to a 14 year high in Britain back in October. The resulting 10.7% inflation in the UK is eating into the disposable income, wages and savings, of households.
As media headlines remind us on a daily basis, we are living in challenging economic times. That is why we need the Government to prioritise driving economic growth. Luckily there already exists the Government Department for Growth, known as the Department for Business, Energy and Industrial Strategy (BEIS). That department will be fundamental in 2023 to the future performance of the UK economy and can deliver the short-term economic relief and longer term economic prosperity we all desperately need.
BEIS has got the critical role of immediately supporting 97% of households with energy bills through the Energy Price Guarantee. Capping energy costs is key to supporting people with energy bills driven up by Putin’s war and BEIS is at the heart of delivering that support.
To deliver longer term economic growth by sustainably reducing energy bills for households and businesses, the Department for Growth must fix the broken energy market and invest in homegrown renewable energy sources. This will deliver the twin benefit of ensuring UK energy costs cannot be weaponised by brutal world leaders while supporting the critical goal of helping the UK achieve net zero by 2050. While Putin poses an immediate threat to European and global security, climate change is the primary threat to our long term security and national interest. The government must deliver the investment needed to unleash the private sector in delivering on the net zero agenda.
The UK economy cannot fire on all cylinders when the energy market is not fixed. To unleash economic growth, we need to see investment in alternative energy sources including offshore wind, hydrogen and nuclear power. The approval of building a new nuclear plant at Sizewell C is key to delivering a homegrown energy market, not least because it will create 10,000 skilled jobs and deliver power to six million homes. This £700 million investment is key to achieving UK energy independence and is a small price to pay given exposure to foreign energy sources has recently cost the Government billions. Pushing ahead with delivering home and building insulation is another way to drive energy costs down, freeing up cash consumers can spend or businesses can put into jobs.
Government can deliver the right investment conditions for economic growth but it is businesses that create jobs and grow the economy. I have worked in three leading FTSE100 British companies and I have founded my own start up. I have seen first hand the role of the private sector in driving economic growth to all corners of the UK. The taxes paid by businesses and hardworking employees fund our public services so the Department for Growth must be on their side.
Small businesses are the backbone of the British economy and account for over half of private sector jobs and turnover. The Business Secretary Grant Shapps is right to be taking action to tackle late payments made to small and medium sized businesses. His pro-business attitude is what is needed – backing business is the pre-condition to growing the economy.
If BEIS truly wants to embody what it means to be the Department for Growth, it must adopt a long term mindset and make investments today. Protecting £20 billion of investment into research and development (R&D) in 2024-25 is the right decision to support future sectors of the economy and help innovative businesses and entrepreneurs flourish. Investing in R&D can transform the UK into a science superpower and maintain high skilled jobs. Shapps recently announced a £95 million investment into super materials; investing in cutting-edge technologies will secure future economic growth.
The success of British business depends in large part on their employees. BEIS has already taken action to support workers and attract more people into the labour market, whether delivering on the increases in the Living Wage and Minimum Wage set out in the Autumn Statement or on delivering flexible working conditions to reflect a modern workplace. The Department for Growth must continue to back those in work who drive productivity.
Fixing the energy market, backing business and driving economic growth are no small tasks. To unleash the potential of the Department of Growth to deliver for our economy requires the right leadership. As a start-up founder, I am reassured that the Business Secretary has a background in business. We need more people from the world of business in frontline politics.
Shapps is also the best communicator in the Cabinet, as he has frequently demonstrated to the country during morning media rounds. His business background, ministerial experience and highly effective communication is what is needed to drive economic growth through leading what will undoubtedly be the key Government department in 2023. With the right policies and leadership, BEIS can truly become the Department for Growth and turn our economy around.