UK Election Analysis: Is the Conservative Manifesto Good for Growth?

1. On Small Business: Good n removing red tape which would have a significant impact on economic growth, but only indicates small improvements, nothing game changing like removal of IR35.
2. On Transport: The focus on E-W transport links like North Wales Mainline is welcome, and increased transport links will support economic growth as mentioned in our Growth Spring Budget.
3. On Data Protection: A focus on AI safety is appropriate, but in terms of economic development, a more welcome focus would be on how rules can ensure that AI can be used to ensure higher productivity – data protection laws make this much more difficult. To support this, making it easier to secure planning permission on data centres would be crucial. The key here is also the need to lower energy costs as energy demand will be a crucial limiting factor to grow this sector.
4. On Trade: It is encouraging to see that the role and importance of trade policy is explicitly recognised. Completing India and GCC will be very helpful, However, politically, the practical reality of securing this deal with India will be challenging, as sitting party does not have the sort of majority which was previously anticipated. The emphasis and recognition of the importance of CPTPP is also welcome. But very little on how the UK will deal with China market distortions.
5. On Independent Trade Policy: On the EU-UK TCA review upcoming, there is a clear commitment not to dynamically align regulations which preserves regulatory policy flexibility and preserves the external trade policy potential. This is one difference with other parties who have intimated that dynamic alignment of some sort might be pursued.  However, it should be noted that following the EU CBAM tariff schedule will effectively remove independent trade policy from large sectors of the economy in any event.
6. National Living Wage: On national living wage going to 2/3 median income, the Growth Commission Budgets have already noted the damaging impact of this level of NLW. We have suggested retaining 61% of median income would be better. The UK would be at the outer edge of G7 countries with this increase. This policy is not conducive to growth.
7. On Benefits: Better targeting of welfare benefits was recommended by both Growth Commission budgets and the suggestions in the manifesto are consistent with those recommendations. This would be beneficial to economic growth.
8. On Public Sector Productivity: Beyond some relatively small reforms to the Civil Service, not much on solving the public sector productivity issue which Growth Commission budgets have highlighted.  The key here is the approach to the NHS, where opportunities for improvements on a more systemic scale (such as introduction of copayments in line with best practice in most countries) are missing.
9. On Energy: oil and gas production is welcome and will be needed. We will also need to accelerate nuclear especially SMR, and improve grid connections and ensure more competition and electricity regulations as the Growth Commission Budgets have recommended.  But some of the reforms are limited in nature.  The Growth Commission budget recommended that the market in nuclear technologies is allowed to operate rather than the Great British Nuclear model where government is in the driving seat and private firms act like providers to large government programmes.  The same is true for Great British Railways which the Growth Commission budgets also disapproved of, preferring the recommendations of the CMA on these matters.
10. On Stamp Duty: Increasing stamp duty thresholds is a recommendation of the Growth Commission and it is welcome. 
11. On Planning: the Growth Commission also recommended reform of the system and evaluating role of the statutory consultees, so this too is welcome.
12. On Freeports: Supporting freeports and development zones is important. But, there needs to be attention paid to allowing the private sector to have a more independent role in freeports as opposed to turning them into big government programmes which is a risk at the moment.
13. On Farming: Support for UK farmers and fishermen is understandable in the context of trade deals, but there seems little recognition that the best way to benefit UK farmers is to remove the regulatory burdens they are under, most of which come from existing EU SPS rules which are becoming more burdensome, and to deal with the EU market distortions which have a big impact on UK farmers given that we are a net food importer and the EU-UK TCA is tariff and quota free. There are mechanisms on market distortions in the UK-EU TCA which could be used by HMG.