February was a month of considerable political change – whether at
Holyrood or Westminster. The forthcoming change of SNP leader and First
Minister by the end of March will lead to a whole range of new policy dynamics
and altered personal and political relationships between the Scottish and UK
Governments.
Significant machinery of government reforms were recently made by
the UK Prime Minister Rishi Sunak – the first significant changes in Whitehall
Departments since 2016 and with implications for policy development,
co-ordination and engagement. The Prime Minister reversed the trend of an
ever-expanding Department for Business, Energy and Industrial Strategy by
essentially splitting its policy responsibilities in three – by establishing a
Department for Energy Security and New Zero (similar to the former Department
for Energy and Climate Change abolished by PM May in 2016), a Department for
Science, Innovation and Technology (also transferring some policy functions on
data, digital and tech from the Department for Digital, Culture, Media and
Sport), and merging the remaining BEIS policy responsibilities for regulation
and sectors such as small business, retail, services, hospitality aerospace and
automotive with Trade. A merged Department for Business and Trade was created
through these machinery of government changes.
The challenge or opportunity for business and other stakeholders
will be to engage well with the new Departments, new Secretaries of State and
Ministers (in some cases), and help shape their policy priorities. Shortly
after the changes, the Cabinet Office published a document
outlining the mission statements and
key policy delivery outcomes given to each of the new or reshaped Departments
by the Prime Minister.
The Department for Science, Innovation and Technology is focused
on raising private research and development investment to make the UK economy
the most innovative in the world, and strengthening the UK’s scientific
co-operation across the world. An early test of where the new policy framework
is heading in support of key Scottish industries such as life sciences, will be
whether the recent improvement in UK-EU relations leads to a resumption of the
UK’s involvement in the Horizon EU policy framework.
The new Business and Trade Department brings together trade
promotion, UK Export Finance, trade negotiations, retained EU and other
industrial regulation, with sectoral teams and policy-making across services,
many areas of goods trade, and competition policy. This may provide more of a
business focus in terms of priorities for live and future trade negotiations,
and especially on ensuring that SMEs and key economic sectors are extracting
maximum trade preferences and usage from newly implemented UK trade deals.
Co-ordination across Whitehall will still be required particularly with Defra,
and the two newly created Departments, in the process of negotiating bilateral
or multilateral trade deals.
The mission statement and key priorities for the new Business and
Trade Department included successfully concluding trade negotiations with
India, and working more with businesses on usage of FTAs. The BCC had asked in
our Trade Manifesto in 2022 for a Trade Growth Office to be established to
raise levels of SME awareness and usage of UK trade agreements in new and
existing export markets. We are pleased that our idea will now be implemented
by the UK Government and look forward to working with the new Preference
Utilisation Unit being created within the merged Department to help achieve
these goals and raise export volumes for UK firms.
The Secretary of State for the newly merged Department – Kemi
Badenoch – recently made a speech
to the Legatum Institute on her key
priorities for the new Department for Business and Trade. She outlined her
desire to remove barriers to export growth in key markets, one by one, from a
list of more than 100 which she and her officials have identified. She also
stated the ambition for the UK to become the top destination for investment in
the whole of Europe. She reiterated the ambition for further trade deals to
remove barriers and boost exports, and also a commitment to rules-based,
freer-trade across the globe.
Of particular interest in the North East of Scotland will be the
return after 7 years of a dedicated UK Government department for energy policy
and the transition to Net Zero. With decisions due of enormous importance to
the energy sector, both short and long-term, and potential for policy changes
in Scotland depending upon the outcome of the SNP leadership contest, this will
be a key UK Government Department for businesses in Scotland’s NE to engage
with.
Configurations of UK Government Departments come and go, but given
the ongoing impacts of the War in Ukraine on growth and energy security, and
the changing patterns of international trade, there has never been a better
time to ensure that the voice of business is heard strongly in Whitehall and
Holyrood through the Chambers network in Aberdeen and Grampian and across the
UK.