Shillman posed the question – “do [fund investors] want the board of directors and the managers of your companies to spend time and energy on environmental, social and governance issues or do [they] want them to spend all of their time and energy on increasing the value of [their] shares?”  His response: “I’m rather sure that an overwhelming number of them would choose the latter.”  Many would argue the data shows unless you do a good amount of the former, you can’t deliver on the latter.

That said, it would be wrong to describe Shillman as an ESG sceptic – it is rather more complex than that.  He believes the integration of ESG factors in corporate decision making is important and he takes pride in Cognex’s impressive track record in this regard.  But he believes it should be left to companies to determine whether and how they integrate ESG concerns, not institutional investors. 

Shillman wrote the above in his company’s 2018 Annual Report.  There has obviously been a lot of water under the bridge since then.  A new consensus has emerged that the ultimate beneficiaries of funds – citizens – expect large, institutional fund managers to do precisely what Shillman argued against, when it comes to investing their life savings, looking after their pension pots, and so on.  It is clear – the aftermath of Covid-19, and the reaction to the tragic murder of George Floyd in the US, have turbo charged the focus around ESG, and lifted the prominence of the “S” and the “G” in ESG. There is no doubt the #MeToo campaign and backlash against fiscal austerity before 2020 had an impact before this too.

Over summer, we carried out a survey of over 22,000 respondents in 11 markets as part of our ongoing Trust Barometer.  This underlined the importance attached by the public to the ESG profile of businesses today.  It revealed that in the face of the Covid-19 pandemic, people want brands to protect the well-being and safety of their employees and suppliers even if it means suffering big financial losses until the pandemic ends (90%).  After the death of George Floyd shone a light on racial injustice and precipitated statements of solidarity with the black community from business leaders, respondents said brands in the U.S. must first get their own house in order by setting an example within their organization (64%), by reflecting the full diversity of the country in their communications (63%) and by making products accessible and suitable to all communities (61%).  The consequences of businesses not meeting expectations now are stark – for example, 60% of all respondents said they will buy or boycott a brand based on its stand on racial injustice. 

Furthermore, investors increasingly do not see ESG integration and financial returns as an either/or choice but two sides of the same coin.  Our latest Investor Trust survey of 607 institutional investors, representing investment firms that collectively manage over $9 trillion in assets, had 54% of respondents stating that ESG initiatives led to a favourable impact on growth and 47% saying it boosts the return on investment.  A good example where a poor ESG profile damages the financial standing of a business is the UK fast fashion chain, Boohoo, which lost a third of its market value in July after controversies relating to its supply chain were exposed.

This is all corroborated by data on ESG funds flows this year.  Refinitiv’s Sustainable Finance Review shows that in the first half of 2020 nearly $200bn in sustainable bonds was issued globally – an increase of almost half, year-on-year, and double the amount raised in H1 2018.  Remarkably much of this growth took place in Q2, when the pandemic was at its worst, with $130bn raised, the highest quarterly amount ever.  Likewise social bond issuance has rocketed  with already more than double the total amount raised in 2020 than for the whole of 2019, driven by capital raising for COVID-19 related recovery efforts. 

This trend is only likely to continue.  Millennials – those born between 1981 and 1996 – were significant drivers of the growth in demand for ESG products, long before the Covid era started and their influence is set to escalate.  According to a 2018 U.S. Trust Insights on Wealth and Worth® survey, 87% of millennial high net investors say a company’s ESG record is an important consideration in their decision about whether to invest or not.  And there is a huge, inter-generational transfer of wealth currently ongoing with around US$24 trillion expected to come under the control of millennials from this year.

So the truth is that in this post-pandemic world, it is actually the free market which is demanding ESG factors are integrated into corporate business decisions – fund managers are simply following the orders of investors.

The role of business in rebuilding out of this crisis and fashioning a new kind of innovation economy where productive businesses, the state, and citizens work together to create wealth, reduce inequalities and ensure that globalisation works for many more people is vital – it would be impossible without enterprise.  You enter public service to make a positive difference to as many lives as possible – the truth is, during my time parliament, I came to realise that there is even more capacity to do this in the private sector, which is why it was always my intention to return to it.

Of course, there are different business models, practices and behaviours.  Since my time as Shadow Business Secretary I have been a vocal advocate of long term value creation, as opposed to the fast-buck, and of firms that not only seek returns for shareholders and investors, but prioritise looking out for other stakeholders – employees, customers, suppliers and communities – as well.  It is for this reason that ensuring environmental, social and governance factors (“ESG”) are properly integrated into corporate decision making is so important. Afterall, business and society are mutually dependent – there is no such thing as a “free” market given that the private sector relies on the state to maintain our roads, provide a digital infrastructure, sustain a national health service and so on.

This perspective is based not only on hard evidence but also life experience.  I was born into a family of entrepreneurs and would have not had the opportunities I had were it not for the power of enterprise.  After leaving full time education, I spent just under a decade working as a corporate employment lawyer – at the coalface of the “S” in ESG – in the City and for industry.  I then spent a decade in various senior roles in Parliament leading on public policy which had ESG at its core.

This is why I am now throwing my energies into working as a strategic corporate advisor to companies on business-critical issues that impact on reputation and their narrative – ESG in particular.

The first steps in this new chapter have involved me working with three companies, mainly in a non-executive capacity, to help their leaderships build value in the long term for investors and shareholders, in addition to delivering for other stakeholders and society as whole. Each seeks to maximise returns for investors but are conscious that this must go hand in hand with delivering shared value for stakeholders and society too.

Advanced is the UK’s third largest software company and I sit on its board as a non-executive director.  Advanced is the UK’s third largest provider of business software and services, with a £254m turnover, over 19,000 customers and 2,400 employees with operations in the UK, Australia, Canada, France, India, Ireland, and the US.  During the pandemic it has paid all staff for their time in isolation, whether sick or at risk but unable to work from home – even those who fall outside of the sick pay policy which include those still within their first six month probationary period.  As a signatory to the Social Mobility Pledge, Advanced has a radical recruitment process which is non-biased and not based on one’s CV or background but on candidates completing two aptitude tests.

Signal AI’s Artificial Intelligence-powered solutions provide communications professionals, compliance and risk experts, in-house and agency teams, and senior business leaders with the information they need to be in the know. The company, for whom I’m working as an advisor, has raised over $49.5 million in investment from four funding rounds and has over 150 employees.  At the start of the lockdown the company gave every employee £200 in order to help them adjust to working from home, and a fruit and veg pack.  They also offered their services free to parts of government to help the country deal with corona virus.

Finally, at the start of the year I was delighted to join Digital Identity Net UK, which is a UK-curated company that provides consumers with a single gateway to the validated identity data held about them by their banks and other trusted custodians of transactional and behavioural data. This empowers the consumer to leverage their identity, decide who has access to it, and how they share it, to build a better quality of digital life.  The founders believe corporate responsibility is entirely compatible with significant revenue and profit generation so the firm will fund a Social Benefit Trust, with a progressively defined portion of profits, to promote wider social benefit by charitable giving There is a special social purpose clause written into the constitution of the company and the investor base is diverse, not dominated by any one individual or organisation.

I am looking forward to working with these great, innovative companies, and with others, investors and shareholders – here and abroad – in building a new stakeholder economy in the wake of the crisis in the months and years ahead.

Instinctively, many corporate leaders will want to steer clear of the rancorous debates which, in the U.S., will crescendo into November’s presidential election. Hiding away, getting on with returning to profit, trying to improve the battered share price and restoring a decent dividend will preoccupy many CEOs. Some will quietly drop commitments to look out for other stakeholders and the environment, citing the pandemic as an excuse.  This would be a huge error, not least because around a third of U.K. workers surveyed don’t have confidence in their firms’ leaders’ approach to navigating the current crisis, with a global survey showing that less than a third of respondents believe CEOs are doing an outstanding job dealing with coronavirus.

When it comes to the pandemic, there have been false comparisons made with times of war.  There are those who predict that once this crisis passes we can look forward to advances similar to those that followed World War II.  The societal changes and post war consensus of the 1940s were a by-product of the shared experience of people of all backgrounds and classes fighting side by side against fascism, leading to a collective demand for greater equality thereafter. It was against this backdrop that the 1945 U.K. Labour administration was elected which went on to create our National Health Service, which is playing such an important role in saving lives today. 

There was also a determination to prevent the world being ravaged again by the division and forces that led to the war. So from 1941 U.K. Prime Minister Winston Churchill and U.S. President Roosevelt led the establishment of the liberal international rule-based order which, ever since, has underpinned liberal democracy and trade across the globe, and guarded against authoritarianism and oppression. This struck a chord with President Roosevelt’s “New Deal” with the idea that nations would work on a multilateral basis to “improve labour standards, economic advancement, and social security.”

However, although we may now be fighting a war of sorts, albeit against an invisible enemy—coronavirus—we have been doing so separately in our own homes, in our own family units. Yes, our incredible key workers are putting themselves at risk to keep us safe but the great mass of our populations have had to stay indoors and abstain from doing things–they have not had to face the horror of leaving home, picking up arms and risking life and death in the same way as the war generation. Furthermore, the experience of coronavirus is not equally shared. For example, in the U.S. and the U.K. it disproportionately kills people of colour, and the people and places with the lowest incomes are the most vulnerable to job losses.  

And, far from precipitating international co-operation akin to what we saw under Roosevelt and Churchill, today we have witnessed countries going it alone, dealing with this crisis in a haphazard and uncoordinated way. The current U.S. President, Donald Trump, has even turned on the very international institution—the World Health Organisation—under whose auspices world leaders should be coming together to solve this global problem.

This is very tricky terrain for the C-suite of any company to navigate.

Many employees will return to work over the next few months hoping they still have a job, only to be told they don’t. 

The U.K.’s Office for Budget Responsibility has this morning published its latest estimate of the total cost of the government’s coronavirus policy interventions: a whopping £123 billion in 2020-21.

Quite rightly there are demands for a new social contract involving key workers being properly rewarded for their incredible work. 

Funding all of this will involve tax increases but who will be asked to pay for them?

Microsoft’s CEO, Satya Nadella, says we have seen the equivalent two years’ of digital progression in two months. Great for big tech but this will undoubtedly lead to household names in traditional sectors, like high street retail, going under. Upskilling and training redundant workers to adapt will be essential. We must also guard against further market concentration in the hands of the dominant players that are left standing and a reduction in competition (which is needed for a healthy functioning market). 

So we should use this moment to reform capitalism and foster a new kind of innovation economy where productive businesses, the state, and citizens work together to create wealth, reduce inequalities and ensure that globalisation works for many more people.   

In this context, there will be a lot of scrutiny of business, which has an important role to play, and will be operating alongside a bigger and more active state. But, as ever, opportunist, populist politicians will be looking to exploit this situation for their own cynical ends.

The populist Left will seek to use this moment to impose punitive and extreme measures on enterprise, and implement policies that will certainly not deliver growth or nurture an environment in which under-pressure firms can recover and get people back to work. 

On the populist Right, many of the main protagonists are currently in office. Their knee jerk decision making, based on ideology and emotion as opposed facts and evidence, and their wild policy ideas, have left them exposed as ill-equipped to meet the needs of this moment. President Trump’s suggestion that we inject ourselves with disinfectant provides a good example.

As ever, they will be looking for scapegoats with whom to park the blame for their incompetence.  Our countries do need to build more resilient domestic supply chains for strategic reasons to withstand the type of shock we have experienced. Yet these populists will demand a more drastic approach. There will be calls for deglobalisation and a degree of isolation as a means of protecting citizens, when this crisis has illustrated the importance of co-ordination and collaboration. 

The result—a perfect storm for companies during a pandemic induced global downturn: demands for more red tape, much more regulation, and punitive business taxation at the behest of the populist Left; and, calls for disproportionate restrictions on immigration, more protectionism, and nationalism, at the behest of the populist Right. Both will impede business and trade.

Business needs to see off this threat by acting to ensure that in a post coronavirus world a regulated, social market economy delivers the goods for more people. Everyone must play their part so CEOs need to become more vocal and activist in addressing environmental, social and governance (ESG) concerns, not less. They are in a good position to do so. Were it not for their firms’ technologies, enabling us to remain connected to our nearest and dearest, the experience of lockdown would have been a whole lot worse. If companies seize the moment and are in the vanguard of building back a better and fairer economy, those who stand in the way of enterprise will be deprived of the oxygen they need to whip up fear, anger and anti-business sentiment.

In his new UN role his focus will be on significantly shifting public and private finance markets and mobilizing the private sector investment needed to achieve the goal of limiting temperature increases to 1.5 degrees, as set out at the 2015 UN Climate Change Conference in Paris. The prime minister, not wanting to lose out on the action, has also named Carney as his finance adviser for the UN’s 26th Climate Change Conference (COP26) which takes place in Glasgow this November.

Carney has warned that “climate change will affect the value of virtually every financial asset” and the Bank will now be stress testing the resilience of the biggest financial services institutions to the physical and transition risks associated with different possible climate scenarios, and the financial system’s exposure to climate-related risk more broadly. Last month, he sided with Greta Thunberg in her clash with president Trump over the urgency of this issue – he said her warnings, that we have only eight years of emitting carbon at the current rate, if there is to be 67 per cent chance of limiting an increase in global temperatures to 1.5 degrees, were right. With regard to the climate emergency, he has said the question for every company, every financial institution, every asset manager, pension fund or insurer is: “what’s your plan?”

If we are to limit temperature level increases, not only do we need to limit our carbon emissions and reduce our use of natural resources, but we must regenerate and reuse natural assets. Since industrialisation, consumption has followed a linear model – where firms take natural materials, use them to make a product, then sell them to the consumer who later bins the material when it no longer serves its purpose. Not only does this increase energy use and generate an enormous amount of waste, but it leaves companies exposed when those finite materials dry up or the price of them increases. This is simply not “unsustainable”, in every sense of the word. 

Consequently, many businesses are moving towards a circular economy model that looks to restore and regenerate materials. Isn’t this simple recycling? No. As the World Economic Forum’s 2020 Circularity Gap Report points out, “modest improvements in waste recycling are being overtaken by the sheer volume of virgin materials being sourced and used to fuel our growth.” Also “recycling”, a broad term, can include incineration and recycling environmentally harmful products, and is itself energy intensive. However, the circular economy seeks to do more. The aim is to design out the waste in the first place, ensure the products are made to have several lifecycles, use materials that can easily BE separated and reused, and ensure the energy used in the process is renewable. 

The environmental benefits are undeniable. An Ellen MacArthur Foundation and Material Economics report estimates that applying circular economy strategies to the production of cement, aluminium, steel and plastics can lead to a 40 per cent drop in emissions from those goods alone by 2050. But there are huge economic benefits to be had too. Research by McKinsey suggests the circular economy could boost Europe’s resource productivity by 3 percent by 2030, generating cost savings of €600bn a year and €1.8 trillion more in other economic benefits. So in answer to Carney’s question, the UK becoming a leader in the circular economy must be part of our plan.

One company leading the way is the British-German owned firm, Pentatonic. I was invited last summer to Berlin to speak to their staff team about Brexit (full disclosure – they funded the trip) which gave me an insight into what they do. They describe their mission thus: “Man has already produced enough plastic and glass to fulfil our needs forever – it’s all out there, it’s just a case of reincarnating rather than burying it. And with enough creativity, each incarnation can be better than the last.” 

Launched in 2017, medium-sized and growing fast, Pentatonic co-creates products for customers using cutting edge manufacturing, allowing their clients to operate more sustainably, using the circular economy model. Their UK CEO, Jamie Hall – formerly the general manager of NikeLab, Nike’s innovation business unit – sees a huge opportunity for British firms here. Far from seeing the latest pronouncements of central bankers and bankers on the need to act on the climate crisis as bandwagon jumping, Hall told me “it’s exhilarating to see their focus on this and the viability of the circular economy as a good investment proposition.” He puts it well when he says “if you create great products at great prices which hold their value, you incentivise people to reuse which will facilitate a complete sea change, at scale, in how we operate.” Big corporations can see the business case for it – Pentatonic’s customers include Burger King, Heron Preston, New Era, Nike and Starbucks. 

So it’s a win-win all round – the circular economy is good for business and good for the environment. If the UK seizes the moment to become a world leader in this sphere, it could be great for our economy too.

Thank you for inviting me to speak here today.

Before I start, I want to get one thing out of the way…

People keep asking for my political predictions.

What’s going to happen with Brexit? Will there be a deal?  Will there be a snap General Election?

I predicted that Labour would win the 2015 General Election…

I predicted that the UK would vote to Remain in the European Union…

And I predicted that Hilary Clinton would beat Donald Trump…

So, I’m following my wife’s advice, and I’ve stopped making political predictions.

‘I don’t know’ is the answer but I think we will have an answer by this time next year.  That’s all I will say.

I don’t blame you for asking.

Before coming into politics, I worked as an employment lawyer here in the Cities of London and Westminster, where I am the Liberal Democrat candidate at the next general election.  Almost all my clients were based in this constituency.  Most traded internationally, particularly into EU markets. 

So, I do understand just how frustrating not knowing what our trading relationships will be are for business.  And I appreciate that decisions on whether to spend, hire and invest cannot be made in isolation of from all the political volatility.

The Liberal Democrats are winning and will be decisive, when the next election comes.

What I can say is that it will be a truly extraordinary election, with some unprecedented results, and a very high level of tactical voting.  And the Lib Dems are on course to play the most decisive role in any general election in my lifetime.

It is not a question of whether we can win more support – we are already winning.

This year, in the European Elections in May, we beat Labour and the Conservatives in a national election for the first time in 100 years, scoring 20.3% to their combined 23.2% of the vote.

In the local elections in England which occurred shortly beforehand we gained over 700 councillors whilst the Tories lost 1,300 and Labour lost control of 6 councils.

In spite of our strong Remain stance, in June we overturned a Tory majority of 8,000 in a seat that voted to Leave the EU and won the Brecon and Radnorshire by-election.

Following the defections of 8 MPs, we now have 19 MPs in Parliament.

And 50,000 new members have joined our party in the last year taking our membership to over 127,000, our biggest ever.

Usually after Local and European Elections, third parties’ polling goes down.  But our polling position has stabilised at around the twenty percent level, with us beating Labour into second place in several surveys.

People tell us they are fed up with our broken two party political system with two parties at its heart who are part of the problem.  They are deeply divided and have failed to provide the clear direction the country needs.  And they have been so preoccupied dealing with their own internal problems that they cannot perform their jobs competently. 

Fundamental change is needed and our success this year tell us the public like what we are offering, with Jo Swinson being a complete breath of fresh air compared to Boris Johnson and Jeremy Corbyn.  She does the work, is on top of the detail, reads her brief, actually cares and is of a new generation.

So we say, bring on a General Election – but we must make sure a No Deal Brexit is off the table first.  We cannot carry on with the current uncertainty, a government that has no majority and a legislature incapable of properly functioning. 

That is why we published our Bill for an election yesterday which not only protects against No Deal, but also prevents the Prime Minister ramming through his flawed Withdrawal Agreement without proper scrutiny, and it fixes the date of the election as 9 December 2019 into law so that it cannot be changed by a premier who has a habit of lying and breaking the rules.

Where next on Brexit

We know business wants to end this uncertainty too.  I can understand why some want to simply waive through and make do with the PM’s Brexit proposals.

But let us be clear: Boris Johnson’s Brexit proposals only offer more uncertainty.  They will not “get Brexit done”.

If the Withdrawal Agreement is finalised, we would enter an implementation period shortly after which would expire in December next year.  We have no idea what our trading relationship with the EU will be after that point.  The type of Canada style free trade agreement the Prime Minister envisages negotiating will take several years to settle and can’t be concluded in this timeframe.

If Brexit takes place, it will also increase the risk of the splitting up of the United Kingdom, with the SNP agitating for another Scottish independence referendum and instability in Northern Ireland.

And if Brexit takes place, should the current PM still be in office and not get the kind of trade deal he seeks by the end of next year from the EU, he is more than happy to gamble the country’s futures on starting 2021 without one.

Meanwhile, the Labour Party’s position is all over the place.

Labour’s leadership are split, with some wanting a People’s Vote, and others wanting to renegotiate a Labour Brexit deal, or a jobs-first-Brexit – a contradiction in terms.

It is still unclear, even if Jeremy Corbyn and John McDonnell managed to negotiate a Labour jobs-first Brexit, whether they would campaign for or against their own deal. They cannot even agree amongst themselves on whether to support having an election.

We, on the other hand are clear – we want to Stop Brexit and Remain in the European Union.  It is the only way to quickly end this uncertainty and restore confidence back into the economy.

We aim to achieve this by way of a democratic vote of the British people, either through a People’s Vote or at a General Election.  Our preference has always been a People’s Vote but with a significant minority of Labour MPs and around half of the ex-Tory rebels in the House of Commons refusing to back it, it is clear we do not have the numbers for one which is why a General Election and a new parliament now offers the most likely way we can achieve this aim.

Until there is a democratic vote, there will be no resolution to the impasse, and we cannot hope to move on, address the real issues facing our country and heal the divisions.

Brexit is already harming the economy.  We have already witnessed a fall in the value of Sterling, higher inflation, and low or negative GDP growth – and we haven’t even left yet.

The Government’s own analysis concluded that in the next 15-years, any form of Brexit will damage our economy.  Relative to Remaining in the EU it is estimated that the kind of free trade agreement envisaged by the PM will lead to GDP and real wages being 6.7% and 6.4% lower in the long term.

Our plan for the future

So what are our plans?  The Lib Dem plan for our economy aims to tackle the causes of Brexit by investing in Britain’s future.

Let me start with where the economy is right now.

GDP growth has been under 2% in the last three years and weaker than in other G7 economies.

According to data from the Department of International Trade, the number of foreign investment projects into the UK dropped by 14% in the fiscal year ending March 2019.

Since December 2017, business investment has been falling each quarter, with the only exception being Q1 2019.

R&D investment is low – below the EU28 average of 1.9%, the OECD average of 2.3%, and lower than key competitors such as France, the US and Germany.

We have recorded a persistent trade deficit every year since 1998, with it widening from -1.3% of GDP to -1.5 of GDP in the last year.

The 2016 Brexit vote has exacerbated these underlying problems.

Jo Swinson, Ed Davey and I all understand the impact this is having on the environment you operate in, the undermining of confidence in the economy, and how this leads you to delay decisions or cancel investment plans.  And we intend to reverse it.

And we want to work with you to support enterprise, invest in the physical and digital infrastructure our economy needs, and build a balanced partnership of the public and private sectors to get the British economy moving, and ensure our economy is fit for the future.

Our record

When the Liberal Democrats were last in Government we helped provide a stable business environment – as you can see that stability fell apart soon after we left office.

Above all, we adopted an active industrial strategy and worked with business to both strengthen and modernise our economy.

We set up the Green Investment Bank – the world’s first-ever state-backed bank of its kind.  The Bank has channelled more than £15bn into green infrastructure and has funded 60% of the UK’s offshore wind generation capacity.

We established the series of ‘catapult’ innovation and technology centres to bridge the gap between R&D and industry and help ensure our most innovative ideas are commercialised and drive benefit to the UK economy.

We founded The British Business Bank. The bank is independently managed but 100% Government owned and has increased the supply of finance to smaller businesses.

We can be proud of these achievements.  However our goal is a society in which every citizen, regardless of circumstance, background or postcode, can lead a happy, prosperous and secure life. This is not the case in Britain today.

Inequalities and regional economic decline and underinvestment played a big part in creating the Brexit chaos we find ourselves in.

Anyone who thinks that the status quo is a viable business plan for the future needs a reality check.

There are different varieties of capitalism – the current model is dysfunctional and needs to be repurposed.

The kind of capitalism we need must be more inclusive and progressive, fairly distribute the proceeds of growth so all communities, regions and nations benefit from the proceeds of globalisation.  Fail to do this and the forces of the extreme and populist Left and/or Right will flourish.

This will require greater equality of opportunity, and government working together with the private sector to harness the power of enterprise and spur inclusive prosperity and growth.

The state and the market, working in partnership, both have a role – and there should be a balance between the two.

We call it a social market economy.

We will create this social market economy by investing in people, innovation and infrastructure in order to give people the tools to be competitive in our economy and ensure our country a world leader.

Ed Davey, our Shadow Chancellor, will set out our plans in detail during the election campaign but I want to highlight four pillars today and some examples of what we intend to do.

First, skills and training for a 21st century economy.

The rapidly changing nature of work means more people are changing career and need to retrain multiple times within their lives.

Even if people don’t switch career they need to be able to develop their skills to keep pace with changes in technology and working practices.

So a Lib Dem government will introduce Lifelong Learning Entitlements – individual ring-fenced funds to enable access to high-quality training schemes for adults.

A higher-skilled workforce will also boost the UK’s economic productivity, which has been lagging behind our international competitors for too long.

Again, the public and private sectors working together in a balanced partnership.

Second, we will support innovative businesses and new developing technologies, which will be the foundation of a thriving twenty-first century economy

As part of an active industrial strategy, a Lib Dem government will expand the remit of the British Business Bank to perform a more central role in the economy.

This will help tackle the shortage of equity capital for start-ups and growing firms, and providing long-term capital for medium-sized businesses developing these technologies.

A Lib Dem government will also pursue year-on-year real increases in public funding on R&D for the next 10 years, so the UK economy achieves our 3.4% GDP goal.

The flawed business rates system acts as a disincentive to investment.  We wish to replace it with a system based solely on the land value of commercial sites rather than their entire capital value, thereby stimulating investment.

Third, an economy which cares for our environment and climate.

We want to see businesses take greater responsibility for the impact they have on the environment.

That is why we want a general duty of care for the environment, to ensure that companies are avoiding behaviour in their operation and supply chains that is damaging to the environment.

This is something that more and more consumers want, and that many businesses are already doing.

So, by regulating for it, it creates a higher floor for standards,

It creates a more level playing field for businesses,

and it doesn’t penalise those who are seeking to protect the environment – but incentivises those who need to do more.

And fourthly, we will help drive regional growth.

As I mentioned earlier, our vision for the economy is one where government supports enterprise, invests in the right infrastructure, and builds a balanced partnership of the public and private sector.

A Liberal Democrat government will examine the current £270bn a year procurement budget to ensure a more decentralised and devolved approach, which will benefit regional economies.

We plan to use public sector procurement and infrastructure budgets to partner with private sector investment in order to increase regional growth in digital and physical infrastructure. This will be an important economic stimulus directed to the regions.

Achieving dynamic local economies, with vibrant, productive cities – economically connected with industrial and rural communities – requires improvements to transport.

That is why a Liberal Democrat government will be committed to the electrification of the rail network, improving stations, reopening smaller ones, restoring twin-track lines to major routes and proceeding with HS2, HS3 and Crossrail 2.

Of course, we must ensure all parts of the country have good digital connectivity.

For the avoidance of doubt: there are no mansion taxes, punitive business tax hikes, programmes to appropriate private property or policies that will lead to our key sectors and industries being walloped with new trade tariffs in our plans.  Neither Labour nor the Tories can say this.

How does our overall approach compare to the offer from the other parties?

Since 2015, this Tory government has overseen a year-on-year drop or stagnation in GDP growthfrom 2.3% in 2015 to 1.4% in 2018.

Meanwhile poverty is up with 14.3 million people living in poverty as of July 2019, that is 22% of the UK population, including 4.6 million children.

This is unacceptable for the fifth richest country in the world.

And this is before we even get to Brexit, a form of which Boris Johnson is happy to plough ahead with, despite all of the warnings of the business, academics and even the government’s own impact assessments.

Instead of listening to you these last few years, senior cabinet ministers have gone on the attack. The PM said “f**k business”, while the former Foreign Secretary said it was “completely inappropriate” for you to air your concerns on government policy. 

Consequently many business leaders I speak to believe the government provided by the Tories since 2017 has been the worst for business they can remember. Yes, they point to Brexit but, they also point to their sheer ineptitude and incompetence.

Meanwhile, under Jeremy Corbyn and John McDonnell’s leadership Labour are failing to even provide proper parliamentary scrutiny to hold the Government to account.

John McDonnell has outlined his plans for renationalising key parts of the British economy.

The CBI’s own analysis shows that Labour Party’s renationalisation plans will cost £196bn.  That’s as much as the annual spend on the health and social care and education combined.

And by their own admission, if elected a Labour Government is likely to spark panic amongst major employers and businesses, leading the party to ‘war game’ for capital flight and a run on the pound.

In our words and deeds, I would argue we are now the only main party that is pro-business, enterprise and entrepreneurship.

Conclusion

So in conclusion, The Liberal Democrats can win – and we are already winning.

In the local elections.

At the European elections.

We are the only sensible pro-business choice at the next general election.

We have a record of working with business to both strengthen and modernise our economy.

I ask you today to work with us again on this.

Whereas Labour and the Tories are two competing visions of the past – our vision is one where government supports enterprise, invests in infrastructure, and builds a partnership of the public and private sector.

The Lib Dem plan for the future of the economy will tackle the causes of Brexit by investing in the Britain of tomorrow.

That is how we build a brighter future for our country.

Thank you.

These are the words of Emmanuel Macron to describe the devastating wildfires that have been burning in the Amazon rainforest. Official estimates suggest there have been over 2,500 raging in the last 48 hours, and 7,746 fires in the 5 days to Wednesday.

The rainforest covers 5.5 million square kilometres, a larger land area than covered by the European Union, and are known as “the world’s lungs”. They provide over 20% of the planet’s oxygen supply, and are a vital carbon store which helps to slow the pace of global warming.

These fires are not just a one time crisis either, figures from the National Institute for Space Research show an 85% increase in wildfires in Brazil this year, most of them in the Amazon. Last month alone, there was a 278% rise in deforestation in the area.

Conservationists have blamed the increase on the far-right Brazilian President Jair Bolsonaro, who has encouraged loggers and farmers to clear the land in the Amazon for crops, cattle and property. Despite early denials, on Thursday Bolsonaro acknowledged that farmers may be in part responsible.

The Amazon wildfires are a tragedy, but more so they are a crisis for the whole global community, with implications for the climate crisis, and biodiversity. President Macron is entirely right in calling for the issue to be discussed at the upcoming G7 Summit. An international crisis requires an international response.

But what should that response be? There is growing concern on the world stage, with celebrities, world leaders, the United Nations, and green activists taking to social media to call for our leaders to #ActForTheAmazon.

The European Union for its part is quite rightly considering its leverage over Brazil’s policies given the discussions underway between the EU and South American Mercosur trading block, which includes Brazil, over a potential free trade agreement.

Both France and Ireland have suggested that any trade deal could be blocked while the Brazilian government continues to encourage deforestation, while in the UK, our Liberal Democrat Members of the European Parliament have written to the EU Commissioner for Trade, Cecilia Malmstrom, calling for urgent assurances from Brazil to honour its environmental commitments to the Amazon and end its facilitation of its wanton destruction, or we would be forced to oppose the agreement. 

Lib Dem MEPs have also raised concerns about imports of beef from Brazil to the European Union, given the deforestation that often goes hand in hand with beef raised on cleared rainforest in the country.

We support free and fair progressive trade deals, but we cannot stand by and allow such a crucial part of the world’s ecosystem to be destroyed under the nose of a President so clearly unconcerned with his environmental responsibilities.

Our Prime Minister Boris Johnson has said that he is deeply concerned by the fires, but has so far only committed to continue supporting existing projects to protect the rainforests, and to raise the crisis at the G7 to call for “a renewed focus on protecting nature and tackling climate change”. 

This is clearly not enough. Boris Johnson should follow the lead of the Liberal Democrats in Europe and Emmanuel Macron and support a clear and strong international response to the Amazon wildfires, that puts the pressure on Bolsonaro to change course with regards to deforestation, and commits assistance if necessary to tackle the fires if he does so.

Together, the world can #ActForTheAmazon, but it requires the courage and global leadership to do so. Our Prime Minister should step up before it is too late.

Brexit, more than ever, is consuming the whole attention and work of Government. Important national issues such as education, the National Health Service and policing are not getting the attention and work they need in order to drive reform and fix chronic long-term problems. However, there is no issue which poses a greater threat to our long-term security and prosperity than climate change and protection of the environment. Ultimately, we are custodians of our planet and the natural environment for the next generation. As a society we have become increasingly aware of the impact our behaviour has on the world around us – David Attenborough’s Blue Plant demonstrated this vividly and in a way that brought it to life for many.

We can all makes sure that we are doing our bit – recycling as much as we can; cutting down on our use of single use plastics which go straight into landfill and our oceans; making sure we are not wasteful with energy to make sure we aren’t burning fossil fuels unnecessarily; and taking public transport where we can to cut down on the amount of polluting vehicles on our streets. Small individual changes can have a massive impact if we act together as a community.

Yet I believe significant progress will need to be driven by both Government and technological change. The Institute for Public Policy Research’s (IPPR) recent report on solving London’s air pollution crisis found that most of the air pollution in London is caused by road transport, of which diesel vehicles are the most polluting, emitting about 40 per cent of the capital’s total nitrogen oxide and fine particle emissions. Therefore, Government has a role to play in progressively phasing out many diesel vehicles in order to bring air pollution to within acceptable levels. The IPPR argues that in the near-term, this means setting legal limits for emissions, and in the longer-term reducing emissions down to negligible levels. It is in the long-term where change will be driven by technological advancement, such as electric cars and climate friendly public transport, which will help secure our progress to a low emission future.

Government also has a role to play in investing in our public transport infrastructure. Research by the Campaign for Better Transport shows that funding for bus services across England and Wales has been cut by 45 per cent since 2010, and by more than £20m in just the last year. This has the effect of either cutting people off from the world around them, or forcing more people to drive, putting more polluting vehicles on our roads. The Government should be investing in public transport, not just to make sure it is fit for purpose today, but fit for the future and able to contribute to meeting our emissions targets.

The challenge of cutting our emissions and our waste in order to safeguard our planets future is a task we cannot duck. The cause is too important and the risks are too high if our society simply walks on by on the other side. But I believe that if we all do our bit; if we do what we can as individuals, if Government drives reforms and if we harness the benefits of technology for the good of all, then we can both protect our planet and invest in our future.

Of course, there is nothing inevitable about this Brexit process that should dictate we leave, which is why The Independent is campaigning for a vote on the final Brexit deal. No Brexit is better than the appalling, chaotic Brexit we are seeing and the people should be the final arbiters of what happens next – not elites in Westminster.

In this column last month I bemoaned the state of British politics after a torrid summer. Since July more information has arisen exposing Brexit for the disaster it is. Boris Johnson kicked off the next Tory leadership election – which is already underway, albeit unofficially – by offending Muslim women. Meanwhile institutional antisemitism continues to pervade the Labour Party, leaving it hamstrung when we should be destroying the Tories for the damage they are wrecking across the country.

I was attacked by Unite’s general secretary, Len McCluskey, for pointing all this out, neatly illustrating that neither party’s establishment is prepared to acknowledge the need to fundamentally change their behaviours. Unless they do this, they cannot properly meet the huge challenges we face as a nation.

We were told Brexit would solve all of the country’s big challenges by Johnson and co. The big story coming out of the summer was that the many problems we have as a country – that led a majority to vote Leave in 2016 – simply will not be solved by Brexit. Here is a small selection of what we have learned during the parliamentary recess.

At the beginning of August, a group of international academics and scientists published research in the official journal of the US national academy of sciences telling us, such is the damage we have already done to the planet, even if countries now succeed in meeting their CO2 targets, human-induced global warming could put us on an “irreversible pathway” to “hothouse earth.”

This entails the climate settling at around 4-5C above pre-industrial age temperatures (its 1C above now), hotter than at any point for 1.2 million years. This would lead to seas up to 60 metres higher than now, melting ice caps and parts of the world becoming simply uninhabitable. When was the last time you can recall a leading UK politician providing any leadership on this issue on the world stage given the urgency of the situation?

This news was followed by Shelter’s release of research showing that since 2011, rent in England has increased 60 per cent faster than wages, with a declaration by the UK’s chartered surveyors that private sector rents could rise still further by 15 per cent by 2023. The Royal Institution of Chartered Surveyors said that government tax changes to buy-to-let investments are responsible and driving small landlords out of the market.

Whatever the reason, this country is still building woefully few homes to buy and there are not nearly enough homes to rent at affordable prices. The intervention by the new communities secretary, James Brokenshire, in the middle of August provided few substantial answers on any of this. Instead he received much derision for coming forward with insubstantial policy proposals devoid of any extra funding.

When surveying the UK economy and the need to change our economic model, Shelter’s research on housing was the starter to the main course dished up by the Office for National Statistics a few days later which, yet again, underlined the stagnation of wages since the global financial crash. As Ben Chu has pointed out, the ONS figures showed we are witnessing the curious case of an economy with a jobless rate that has sunk to four per cent – its lowest level in over 40 years – and yet wage growth continues to slow when you would expect the opposite to occur. Which of our country’s leaders galvanised the country into action on this during the warm summer months and provided a credible way forward?

And we will need the extra tax revenue to the exchequer that this increased employment, alongside rising wages, could bring, not least because of the growing costs of our ageing population. Last week the Lancet told us that the number of those aged 65 and over needing round the clock care is set to increase by a third between 2015 and 2035. How on earth are we going to pay for all of this? There is no consensus in Westminster on how we address the social care crisis now, never mind an ageing population in the future.

An overheating planet, a dysfunctional housing market, stagnant wages and a social care crisis are not an exhaustive list but just some of the policy areas where we have learned something new since the recess started but the Westminster establishment seems too impotent to respond to as the summer break closes.

To the extent there is any response, the populism of left and right – resurgent in both main parties – proffers simple, black and white, tweetable answers to all these problems, inferring that centre-left people like me should stop moaning and get with the programme. The truth is, the answers are not black and white; they are incredibly complex and need modern answers. But British politics has little bandwidth to address them given the huge distraction which is Brexit – a project which certainly provides no solutions and will actually make these problems harder to address.

That is why it is incredible that both main parties should end the summer continuing to sponsor this calamity. The go to excuse for doing so is the so called “will of the people”, as expressed two years ago. Yet, however people voted back then, they did not vote for this Brexit mess; what they did want was change and for the country’s big challenges to be tackled. So while we will all be convulsed by the drama, the ups and downs of the negotiations and the Brexit votes in the Commons these next few months, it is vital we do not take our eyes off the ball when it comes to tackling these big issues. It is clear, whatever the establishments in both main parties may say, that we need change at home and abroad. Whatever happens with Brexit, the status quo is not an option.

A look at the past statements of pro-Leave Tories – especially those in the current cabinet – who are driving May’s agenda lifts the lid off a Pandora’s Box of unpleasant right-wing policies that would represent nothing less than a raid on the least fortunate, both in Britain and abroad.

May peddles bromides about “building on” workers’ rights after we leave the EU, and standing up for those who are “just about managing”. But her record suggests otherwise, with her long history of voting against life-changing legislation such as the national minimum wage, the 2010 Equality Act, and the repeal of Section 28. With her Government intent on taking Britain out of the structure of employment regulations guaranteed by the single market and European Court of Justice (ECJ), workers’ rights are up for grabs, including directives on working hours, equal treatment for agency workers, and ECJ judgments on holiday pay. Priti Patel has spoken of “halving” the “burden” of this regulation. Liam Fox called workplace rights “intellectually unsustainable”, while Boris Johnson demanded they “scrap the social chapter”.

Combined with this Government’s history of reducing taxes for the rich and big corporations, while cutting the benefits that working people rely on, it is clear that a Tory Government with an increased majority will be heavily tempted to slash rights at work. This is the basis of the “alternative economic model” Philip Hammond has spoken of if we leave the European Union with no deal at all.

The extreme Tory Brexiteers likewise pose a threat to our National Health Service. Leave campaigners now in the Cabinet promised that Brexit would be the saving of our NHS, plastering their £350m-a-week promise down the side of that infamous red bus. But earlier this year, each and every one of these Tories lined up to vote against my amendment to the Article 50 Bill which would have delivered this money. After seven years of callous Tory Government, it is clear we cannot trust them on the NHS – especially when Johnson, Fox and David Davis have a history of calling for charges, cuts and privatisations in our health service. The Government’s own forecasters predict a £58bn black hole in the budget as a direct consequence of Brexit. This will mean less money, not more, for an NHS already starved of funds.

It is not just British people who will suffer as a result of a hard Tory Brexit, but the very poorest around the world. Having an International Development Secretary who previously called for the abolition of that very department might seem like a rejected plotline from The Thick Of It, but in the case of Patel it is all too true. Fox and Davis have both called for the scrapping of the target to spend 0.7 per cent of GDP on aid – a target that has directed billions into vital programmes to reduce extreme poverty and educate women and girls. When that £58bn black hole begins to grow, Tory backbenchers will undoubtedly demand that this symbol of Britain’s commitment to the poorest of the world be junked.

Climate change, which has a greater impact on the developing world than anywhere else, is another target on the hard right’s hit list. Lord Lawson, one of the intellectual godfathers of the pro-Brexit movement, chairs the Global Warming Policy Foundation which denies the scientific consensus on climate change. Johnson and Davis have aired doubts about man-made climate change, while our current Environment Secretary admitted upon being appointed that she had to ask “is climate change real?”. When we lose the protection of EU emissions targets and environmental protections, there will be no guarantee that such protections will be continued.

This is not an impossible scenario. The extreme right of the Conservative Party is in the intellectual driving seat of their Government. For them, Brexit is about much more than our future relationship with the European Union; it is a means to an end – a harsh, libertarian society that works for the wealthy and pulls the rug out from underneath the most vulnerable. They destroyed David Cameron, and May’s entire political strategy is based on giving them red meat so they do not do the same to her. Furthermore, in our desperation for trade deals with the likes of Donald Trump’s America, it is quite possible that environmental and worker protections will be given up at the behest of foreign corporations. At this election, it is vital that the Tories are not only prevented from pursuing an extreme hard Brexit, but stopped from changing Britain into a nasty, uncaring country.