Why the Conservative leadership race matters to Yorkshire - Beckie Hart

The past seven days have seen the initial eight contenders whittled down by early rounds of voting, but more than a month of the contest remains before the UK’s new leader is confirmed.

While it can sometimes feel like goings-on in Whitehall are a world away from events here in Yorkshire, that is not the case right now.

Because what’s at stake is not just the leadership of a political party – whoever emerges victorious will also be charged with steering the UK through a cost-of-living crisis, levelling up the country and driving us towards net zero. All while war rages in Europe.

The choice made by Conservative members in the weeks ahead will therefore impact on every community, household, business and person here in our region.

Our finances, our future ambitions, our quality of life, will all be defined by the choice made.

It has been encouraging therefore to see all candidates using the early days of their campaign to set out their economic strategies.

They know the cost-of-living crisis is weighing heavily on minds across the country, and the economy is likely to be a key battleground for the next election.

That’s why the idea of tax cuts has been such a hot topic. But here we urge caution: Tax cuts may be popular, but they are not a comprehensive solution to the cost-of-living crisis. Because they don’t address the underlying causes of weak growth – and it’s growth we need to boost the UK’s flagging economy.

Sustainable growth. Shared growth. Not growth that relies on only government or household consumption, which is doomed to fail.

Nor measures designed to fuel spending during a period of high inflation, which will likely feed it and add to the public debt.

We need government – whoever it is led by – and business to work together pursuing clear opportunities for greater growth. For the new PM, that means establishing a tax system which incentivises and rewards business investment. A system which enables private sector spending to catalyse the growth and long-term regional prosperity we need.

The CBI reiterated this message in an open letter to the leadership candidates from our Director-General, Tony Danker.

It reminded them that tax measures targeted at boosting business investment pose less of a risk for inflation.

Because while they help boost confidence in the short- term, their effect isn’t necessarily immediate.

They aren’t about prompting a short- lived spike in spending that can add to inflation.

Instead, planned well, they translate into economic activity over the years ahead, ensuring any downturn we face is shorter and shallower than it might otherwise have been.

Because inflation-driven pay rises can be replaced by those driven by productivity improvements, which are infinitely more sustainable.

And because the resultant investment can spark the innovation that can lead to new and better jobs.

The CBI has two examples that it wants the next PM to prioritise. The first is a permanent successor to the Super Deduction which is due to end next April. It would provide an immediate 100 per cent tax deduction for capital spending which CBI research shows could boost business investment levels by £40bn a year. The second is a fundamental and urgent reform of the Business Rates system, which currently acts as a tax on investment.

Businesses need the next PM to reshape the UK as a globally competitive tax regime capable of contributing to a bold, credible and sustainable growth story.

That’s why the choice ahead is such a big one – and why all eyes, including those here in Yorkshire, will be watching closely as events unfold in Westminster this summer.

Beckie Hart is the regional director for Yorkshire and the Humber at the CBI.