As vaccines begin to be rolled out there is hope that a sense of normality may return to the UK (and globally) during 2021. The government would, understandably, be happy to be focused on anything other than the ongoing COVID-pandemic, which has put this administration’s wider agenda firmly on the backburner. If we allow ourselves a smidge of optimism, what then can we expect to hear coming out of government as the new year gets underway?
More so than it has done previously as a political issue, we can expect a focus around trade to be firmly at the top of the agenda. Having achieved a last minute Brexit trade deal, attention will be on the government to clearly set out and implement policies and initiatives that demonstrate how the UK is maximising the potential for greater flexibility on trade. ‘Global Britain’ as a political narrative went somewhat quiet in 2020 as COVID and Brexit took over. The PM, in particular, will be keen to use any opportunity to reengage on this agenda and articulate Britain’s post-Brexit role in the world as a trading nation. Identifying areas of divergence from the EU, that can create potential growth for the UK, will be at the forefront of policymaker minds.
We can anticipate that trade and investment priorities will align with this administration’s wider ambitions. The end of 2020 saw a welcome focus from the PM setting out plans for a ‘green revolution’. Making this a reality – and creating opportunities for the UK to become a leader across a range of technologies – will be at the heart of trade and investment strategies. As Johnson seeks to build bridges with incoming President Biden, demonstrating environmental and sustainability ambitions also provides a way to frame US-UK trading relations and demonstrate an area of mutual commitment.
Both Number 10 and HM Treasury have expressed ambitions to develop the UK into a ‘scientific superpower’ leading the way in R&D, innovation and working on the commercialisation of life sciences and advanced manufacturing. The COVID-pandemic has certainly reinforced the importance of developing resilience and capacity across these sectors. We can expect ongoing interest in how to drive investment across the ‘techs’ and secure access across global markets to drive export growth.
Contentious issues will remain. The thorny problem of Chinese investment (most visibly demonstrated last year with the scrutiny of Huawei’s operations and access to UK infrastructure) will continue to raise its head – not least bolstered by sceptical Conservative backbenchers coalescing around the ‘China Research Group’ of MPs. The interplay between a ‘global Britain’ narrative – with the country ‘open for business’ – and a desire to take a stricter approach to foreign takeovers of high-growth businesses (which we have begun to see in the tech space) will result in regular friction and debate over competing visions for the UK.
It’s unlikely to be purely plain-sailing, but for a government buffeted by COVID and Brexit over the past 12 months, a forward-looking vision built on trade provides an opportunity for a reset.