Is There a Texan Growth Playbook the UK Can Learn From?

With the UK government poised to unveil its Comprehensive Spending Review tomorrow and a refreshed Industrial Strategy later this month, the economy stands at a critical juncture.

It’s easy to overlook, but the UK retains remarkable economic fundamentals. As the data and AI revolutions gather pace, there is significant potential to leverage the UK’s deep-rooted advantages in professional services, life sciences, and advanced manufacturing. The upside could be substantial if the right conditions are in place.

Yet, like many advanced economies, the UK remains mired in a low-to-no-growth environment. Our latest forecast expects less than 1.5% growth per annum for the next three years. This not only threatens long-term economic opportunity, but also fuels public discontent and weakens political stability. Since the Autumn Statement, which included several tax rises – most notably the increase in employer National Insurance contributions – our research at the British Chambers of Commerce has shown a clear drop in business confidence. Around eight in ten SMEs told us they expected some form of negative impact from the NICs hike. 

So, can we learn anything from how other economies are approaching growth?

In May, the BCC had the pleasure of welcoming a delegation from the Greater Houston Women’s Chamber of Commerce. Their visit offered an opportunity to explore shared challenges but also to hear about the policies Texas is pursuing to stimulate investment and promote economic dynamism.

Texas often presents itself as one of the most business-oriented states in the US. While its political and economic model is quite different from the UK’s, some of its recent measures offer insights worth reflecting on:

Texas Enterprise Fund (TEF): A longstanding programme providing cash grants to companies committing to high-wage jobs and capital investment. According to the Texas Governor’s Office, TEF has helped attract over $38 billion in capital investment and supported more than 100,000 jobs since its launch in 2003.

Jobs, Energy, Technology, and Innovation (JETI): Introduced in 2023, this tax incentive programme offers breaks to large-scale projects that meet job and investment thresholds. The Texas Comptroller’s Office reports over 70 applications in its first year, with billions of dollars in projected investment.

Business Recruitment and Formation: Since 2021, the state has ramped up CEO outreach and business recruitment campaigns. According to the Texas Secretary of State, over 125,000 new businesses were formed in 2023 alone. 

Texas is home to many SP500 giants, including in the energy sector (ExxonMobil), tech (Texas Instruments, Oracle), and aviation (American Airlines Group). Texas’s absence of corporate and personal income tax is also seen as a major part of its offer to businesses.

Of course, not all of these policies are easily translatable to the UK context. The constitutional, fiscal, and regulatory frameworks are fundamentally different. But the underlying message of consistent strategic intent, coordinated investment attraction, and a clear offer to businesses is something the UK should take seriously. This is why major investment summits like London Tech Week are so important.

As the government finalises its Industrial Strategy, the question is whether we can demonstrate a similarly clear and long-term commitment to fostering growth which leverage’s the UK’s unique strengths, that both firms domestically and investors globally believe in.