Sunak’s next small shift towards stability must be for business

“It won’t change the price of fish” my old boss David Cameron used to say, if aides panicked over something which was tricky but ultimately insignificant. His comeback as foreign secretary is part of Britain’s slow return to something which feels more stable, less petty and more outwardly focused than it has felt since his own reckless gamble on Brexit.

Forget whether Sunak’s reshuffle is an electoral gamble: almost no one thinks the Tories can win next year. What matters is how Britain is governed. The merry-go-round of ministers and prime ministers has given us all vertigo and the system indigestion.

The removal of the tone-deaf Suella Braverman, and the roles given to moderates, mean that the Conservative right has not looked so weak around the cabinet table since 2016. Nor in Downing Street, where talented aides from the pre-Johnson era, Adam Atashzai and Jamie Njoku-Goodwin, have quietly reappeared. The government now has two old hands: Cameron, who stabilised Britain after the financial crisis in a coalition which few predicted would last, and Jeremy Hunt who, like Cameron, has no interest in the top job. It may not be fresh, or radical, but it is steadying.

What Britain needs most, what our allies and investors crave, is stability. Sunak has shown that he is big enough to appoint veterans, and he knows that business needs consistency. His brief, strange posturing as the “change” candidate, which involved dissing every administration since Thatcher, seems to be over.

So is the reign of Braverman, whose sole achievement as home secretary was to stain legitimate arguments with vile language. At an ugly time on the streets, the home secretary stoked things up rather than calming them down and undermined the police. Her replacement, James Cleverly, is more likely to tackle difficult issues professionally behind the scenes than by wantonly attacking his colleagues through the newspapers.

The Conservatives’ unpopularity with the public, and the uncertainty over what this government is for, have raised the stakes for the Chancellor’s Autumn Statement on Wednesday. A year ago, Jeremy Hunt’s job was to calm the markets and restore faith in the public finances. Having achieved that, he now faces another daunting set of demands: to boost growth, and offer hope to voters but without refuelling inflation.

There will be a big package to get people back to work — Britain is now a global outlier in economic inactivity — and no doubt some voter-friendly gimmicks. But in a flat economy where there is little room to manoeuvre, the needs of the economy should trump short-term politics. There must be a serious plan to stem the diminishing goodwill from businesses and internationally mobile investors.

Since Brexit, Britain has begun a slow, mournful slide down the OECD rankings for foreign direct investment: from 12th place in 2015 to 20th in 2022. This is not entirely surprising, given the havoc wreaked by leaving the single market and customs union. Nevertheless, the UK should not have fallen quite so far behind, according to the Harrington Review of FDI, which the Chancellor will publish next week.

Lord Richard Harrington finds that Whitehall has been reactive rather than proactive, and too slow to respond to the changing opportunities in areas such as green technology and advanced manufacturing, as well as to the challenge of the US Inflation Reduction Act. Countries like France and Ireland have been far more adept at wooing investors and creating clear selling propositions than Britain with its regulatory sprawl, sluggish planning system and flip-flops on policy.

I have been sitting on the Advisory Board of the Harrington Review, and have found it sobering to hear the intense frustration of those who believe in Britain, at government’s insularity and incoherence. In a democracy, “long-term” is always vulnerable to the electoral cycle. But many business executives have lost faith that the next batch of politicians won’t just rip everything up, without consultation — and the next batch might be along any moment.

Consistency is the vital ingredient which has been lost. The outlook for business will be improved if Hunt makes permanent the full expensing tax break for IT equipment, plant and machinery. But much more than tax breaks and subsidies will be needed if Britain is to fulfil its potential.

It takes far too long to get a grid connection, or planning permission. It is too easy for targets to be created without proper consultation, then changed on a whim. Lord Harrington wants an investment minister to sit in the cabinet, to break down interdepartmental barriers and sound the alert about how policies affect investment. That feels more like common sense than the appointment of the new “common sense tsar” Esther McVey.

Seven years after the EU referendum, putting Britain back on the map as a stable place to do business seems to be of little interest to the Tory right. Their credo of permanent revolution sits uneasily with the real-world need for regulatory certainty. So even a small shift to reasonableness at the top can have an outsize impact.

I wouldn’t be surprised to see a Starmer government repeat the trick of using the Lords as a route to bolster experience around the cabinet table — especially given the large number of peers Labour will appoint, to offset their dwindling and ageing numbers.

Countries are better governed when both the ruling executive and the opposition are sensible, and decent. We just got a bit closer.

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