Cable: sustaining long-term growth
The Ministry of Justice’s legal regulation review has been given greater impetus by publication of a new industrial strategy that aims to strengthen the UK’s position as a global leader in professional and business services (PBS).
According to the strategy – compiled by the Department for Business, Innovation and Skills (BIS) – the PBS sector employs four million people and is worth more than £150bn to the UK economy, contributing 11% of GDP. This makes it the largest sector of the economy.
Legal and accounting services – grouped together by the strategy – are the largest sub-sector, generating 22% of PBS output.
The strategy was developed by the PBS Council, which is chaired jointly by BIS minister Lord Younger and Sir Michael Snyder, senior partner of accountancy firm Kingston Smith. The senior partners of law firms Freshfields Bruckhaus Deringer, Linklaters and Pinsent Masons – respectively Will Lawes, Robert Elliott and Chris Mullen – are members of the council.
The strategy stresses the importance of a “favourable business environment” and highlights as part of the work to ensure this in place the Ministry of Justice’s review of the legal services statutory framework “light of concerns raised about its complexity”.
“The PBS Council supports the UK government’s commitment to reduce the burden of regulation which falls on businesses,” it said.
The review formally began last month with a call for evidence. It will encompass the full breadth of the legislative framework surrounding legal services.
The PBS strategy identifies two key priorities for ensuring the future strength of PBS – access to a diverse highly skilled workforce and increasing exports to emerging markets. This includes trebling the number of higher apprenticeships across the sector over the next five years to 10,000 per year.
A new network of senior business envoys will champion UK capabilities and trade opportunities when overseas. UK Trade & Investment will also arrange trade missions specifically for PBS. This increased focus on trade promotion will build on the UK’s position as an international hub of PBS firms. The sector was responsible for 10% of all UK exports – £47bn – in 2011.
Business secretary Vince Cable said: “The professional and business services sector has been growing at 4% for the last decade and we need to ensure this growth is sustained in the long term. The government will provide support to make sure the sector has the skilled people it needs so that we can keep this success story going.
“Despite challenging times, exports in professional and business services have more than doubled over the past decade. I want our top executives to think British in all their overseas business, particularly in emerging markets where a growing middle-class is demanding higher-quality services.
“If a British advertising agency runs a campaign in India, there will be a British legal firm available to finalise the contract, or British accountancy firm to handle the transaction.”
I hope the review picks up that the problem with legal regulation is its complexity and not the burden it places on firms per se. It is the structures that need streamlining (which would, one would imagine, reduce costs) and not the rules and regulations that protect consumers (e.g independent regulation and complaints handling). We can but live in hope.