Now the prime minister has set out her agenda for Britain leaving the European Union – Brexit, it provides an opportunity to turn our minds to what it will take to generate jobs, raise living standards and make Britain an even more prosperous and dynamic economy. In short, to make the UK the best place in which to do business.
While there has been much hand-wringing and angst about the upcoming negotiations, they pale into insignificance beside the manifest economic benefits that will flow from Brexit – if the government does the right thing. To this end, the government should now plan to ensure the country can take full advantage as soon after Brexit day as possible.
We should aim to remove tariffs, either unilaterally or through free trade negotiations, thus reducing the cost of food by up to 40%, and the cost of clothing and footwear by up to 20%. With a reduction in other input tariffs, this would be an enormous boost for those “just about managing”. It will free up consumer spending, helping inflation and the economy at large. We should compensate business for any tariffs erected through the tax regime, at a cost of less than half of our EU net contribution, and we should have signature-ready trade deals and a deregulation programme prepared for Brexit day. This is work that must start now.
All the benefits of Brexit are entirely independent from the single market and the customs union, except in so far as membership of these prevents us from crystallising them. There is also a potential and massively important fringe benefit of Brexit, in that the government will now have to do the things that George Osborne failed to deliver and which have been resisted by the City-dominated Treasury for so long.
We need to rebalance the economy, and from this imperative government no longer has a hiding place. Our new freedom and EU contribution monies mean the government, at last, has the mandate and the resources to support our small and medium-sized exporters, and not be transfixed by the often protectionist multinationals. We must invest in universities and research and development and actually build infrastructure, not just talk about it. Seek the lowest-cost sources of energy rather than burdening consumers with massive bills. Provide non-equity loan capital and finance for entrepreneurs, growing firms and the tech sector, even if it means the City turning a buck less.
Immigration must be cut, but not at the expense of talent and jobs. Bone fide university students should be assessed for immigration at the point of graduation, not entry – after all, education is a service sector “export” as much as selling Burberry handbags, and creates a network around the world and a pool of talent for business. We want the brightest and the best in this country, alongside investment in the development and training of our young people to ensure they are as employable as possible. It is shameful that we have nearly 600,000 unemployed under-25s.
There are important things that the exit negotiations need to resolve: visas, residency, open skies. But the really important things are not EU trade arrangements – they would be nice to have but are not essential. The real benefits of Brexit will be a considerable chunk of GDP – and that’s without including the trade deals we will do with the rest of the world. Additionally, the rebalancing of the economy and making Britain the best place in which to do business will produce a boom in economic growth, investment and trade. By contrast, the cost of not having the trade arrangements with the EU – having tariffs imposed – are minor. Less than half our net contribution.
And all this is quite apart from the political and constitutional imperative for a clean break: freedom to make our own laws subject to our own courts and with control of our own borders – the very things that define a nation state and for the preservation of which our forebears paid a high price in blood and treasure.
Certainly we should not spend too much time on fruitless negotiations, we should instead be devoting more energy to looking forward, preparing for our freedom and the opportunity to be a vibrant, free-trading, enterprise nation.