Kemi Badenoch: Treasury is not a growth department, it's mine

Kemi Badenoch, the business and trade minister, is rumored to succeed Rishi Sunak as party leader. Photo: JENNY GOODALL/SHUTTERSTOCK

It's been a tumultuous week for the Tories, with deep-rooted party divisions boiling over again as the party struggles to overcome Labour's 20-point lead in the opinion polls.

Unsurprisingly that Kemi Badenoch was happy to be away from Westminster in the US, where she was signing a trade agreement with Ron DeSantis, the governor of Florida and a contender for the Republican presidential nomination.

This is the seventh time in the US. a national trade agreement that the UK has signed – and by far the largest.

The Business and Trade Secretary, rumored to be Rishi Sunak's successor as party leader, is keen to talk about it.< /p>

“If Florida were a country, it would be the fifteenth largest economy in the world , the same size as Spain,” says Ms. Badenoch.

“The Biden administration has closed the door to new free trade agreements with all countries — we won't see a US-UK free trade deal any time soon — so instead we're using our Brexit freedom to sign government deals while remaining nimble. and flexibility that removes barriers to trade.»

Welcoming Ms Badenoch to Florida, Mr DeSantis — second in the race for the 2024 Republican nomination after Donald Trump — called Britain the largest foreign investor Florida.

He added that the new memorandum of understanding on trade gives priority to sectors such as space exploration, aerospace manufacturing and artificial intelligence.

“These are all areas where the UK has a significant competitive advantage,” Ms Badenoch says. “For example, our fast-growing space sector is already worth £17.5 billion a year, employing almost 50,000 people, and Florida has Cape Canaveral, home of the US space industry.”

She points out that There is «major opportunity to leverage UK expertise in insurance and financial services» given the «huge demand for insurance and reinsurance in Florida.»

Ms Badenoch cites Lloyds of London opening a branch in Miami following its recent British trade mission — “this is the kind of expansion of British industry we want and which this trade treaty makes possible.”

The business minister also traveled to California — and during the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, she attended the first UK meeting of a major Asia-focused trade pact, the Comprehensive and Progressive Agreement on Cross-Border Transport. -Pacific Partnership (PPTPP). In July, the UK joined an 11-nation bloc that includes Japan, Vietnam, Malaysia and Mexico.

«Attending the APEC summit is not of much interest to the British media,» Ms Badenoch says. «But that's because people still don't understand the significance of the CPTPP and our focus on the Indo-Pacific region, which will account for the majority of global growth between now and 2050.»

Badenoch staff are 'relishing the challenges'

Now that Britain has joined, CPTPP members account for 16 percent of the global economy, the same as the 27-nation European Union. However, by 2050, the World Bank estimates that existing CPTPP members will generate about 25 percent of global GDP, while the EU's share will fall to 10 percent.

“Half of the world's middle-class consumers will soon live in the Asia-Pacific region, a free trade zone spanning fast-growing economies,” Ms Badenoch says. «The UK is the first European economy to join the group, so we can reap the benefits of free trade in this key region while deciding who joins the group next.»

While some cabinet ministers berate government officials Ms Badenoch praises her officials for blocking bold moves. “In my department there is no “blob,” but there are employees who like a challenge,” she says. «There are people here who are very focused on free markets and free trade — it's probably the most centre-right department in Whitehall.»

However, she remains «disappointed» by recently published Whitehall estimates that joining the CPTPP would grow the UK economy by just 0.08 percent.

«This was based on an outdated and flawed methodology, without accepting into account how trade flows work. how firms trading with the world's fastest-growing region will behave, or the potential of CPTPP to attract new countries,” she said. » />Kemi Badenoch at her campaign office. Photo: JEFF GILBERT

With Jeremy Hunt's autumn statement due on Wednesday, Ms Badenoch suggests the Treasury could use some help when it comes to setting economic policy. «Of course we all want tax cuts, but we need to think about the overall financial situation and that's what the chancellor is doing,» she says.

She proposes creating a separate department dedicated to improving productivity and commerce. “I think businesses need a department focused on economic growth,” she says. «The Treasury is very much the Treasury and the key is to have an additional department dedicated to measures to improve economic growth.»

Ms Badenoch claims that «this is what I created», given how she oversaw the merger of business and trade in her current role.

“I taught this department to move away from endless regulation and subsidies and instead focus on solving business problems,” she says. “I would like us to be seen as a department not just for big business, but also for small business.”

Maintaining his theme, the minister emphasizes the need to “debate Brexit, given that it is so many people who are downplaying it.” and spread false information.”

She describes the widely quoted claim that leaving the EU would cost the UK 4 percent of GDP as «nonsensical — that estimate was based on our leaving with no deal but leaving with a comprehensive trade deal with the EU.»

«UK left the EU, there's no going back.» Ms Badenoch insists it is «impossible to isolate the impact of the pandemic on UK trading performance in the immediate post-Brexit period» — and cites figures showing growth compares favorably with the EU average since 2016. with UK exports to the EU currently close to record highs. .

If the Conservatives lose the election, Ms Badenoch fears, “our political opponents will blame Brexit for the problems caused by low productivity, too much regulation, too much immigration, arguing that we can only fix the situation by returning to the EU, and ultimately we walk in circles.”

However, she remains confident when asked about the return of chief Brexit critic David Cameron to government. “The UK left the EU, there is no going back,” she says. «We can't keep having a referendum again, and I think David shares the same view.»

And she remains equally coy about the ouster of her Conservative Party leadership rival Suella Braverman. «We all serve the prime minister's interests,» Ms Badenoch says. «It would be inappropriate for me to comment — I certainly wouldn't want colleagues making ongoing comments if the same thing happened to me.»

Staying loyal for now, Ms Badenoch is making it clear to her many fans in her party, in Parliament and beyond, that she continues to support Mr Sunak, including on illegal immigration, which is currently his weakest flank. «It is clear from the Prime Minister's recent comments that stopping boats is his top priority and I support his work on emergency legislation to get the job done.»