Four Things Britain Must Do Now

30/06/2016 06:56
Matt Cardy via Getty Images

I've never got divorced and I rather hope never to do so. But I understand from friends that it can be one of the most stressful events in life.

In a way, I had this thought at the back of my mind as I voted to Remain last Thursday. The pain of a national EU divorce was never going to be comfortable - particularly in the short-term.

Nonetheless, fed up with what people viewed as a less than accountable EU, voters were prepared to take that risk. The long break-up has thus begun.

Despite my natural caution and concern about the fallout, today I actually feel overwhelmingly optimistic about Britain's future. I also know that isn't where most people right now. Not yet anyway.

Many have criticised the lack of planning for this outcome, so here are some thoughts about what Britain should do now in order to prosper in the future.

First, we must resolve to make ourselves the world's greatest trading nation. As an island, we need to rediscover that swashbuckling spirit of the 19th Century when we practically owned the concept of free-trade. Yes, we may have voted to Leave the EU's political project, but now is not the time to turn inwards.

Some will argue that we have just made that task a heck of a lot harder by leaving the biggest trading block on this planet. But dig deeper and the reality may in fact be quite different.

Surprisingly, as a member of the EU, the UK currently has just 63% of all its trade covered by free-trade agreements. Meanwhile Norway executes 80% of their exports under free-trade agreements, Canada reaches 69% and Australia 77%. So here is an opportunity to significantly improve on pre-exit position by signing bi-lateral free-trade agreements throughout the rest of the world.

I was known as Party Chairman, but my seat around the Cabinet table was in fact as Minister without Portfolio. I fulfilled that role by being a trade envoy for the UK; focussing on fast-growing South-East Asia including countries like Singapore, Taiwan and Vietnam. I would typically chair so called JETCO Summits (Joint Economic Trade and Co-operation meetings on trade). But after we had discussed a few perfunctory matters relating to, say, some local bureaucratic problem for our goods at a port of entry, the rest of the discussion would largely consist of problems which needed EU Commission solutions. And there they remained. Fast growing Vietnam would always struggle to be high enough on the EU's trade agenda to actually resolve a trade deal. EU/Vietnam free trade agreement talks have been ongoing since June 2012. It won't surprise the reader to hear that they remain 'ongoing'. Imagine how much faster we could wrap up trade agreements with these developing powers on a bi-lateral basis. And yes, they really do want to trade with us. This is our chance to steal a march on our EU friends and partners.

Second, we need to cut corporation tax to reassure business that this remains their natural home. This would send a clear and unambiguous sign that Britain remains open for business.

George Osborne has already said that corporation tax will reduce to 19% next year, then down to 18% in 2020. But that leisurely reduction is out of kilter with the new reality. In fact we will have left the EU by the time of that second cut. So now we need to send an urgent message that there is no better place to do business, something that hasn't changed with our pending EU exit.

The new Chancellor must therefore accelerate the programme of corporation tax cuts. This would reassure business, reconfirm Britain as the ultimate business-friendly destination and help secure our impressive jobs factory of Europe reputation. Yes, there is a hit to the exchequer, but it's far less costly than sitting on our hands and allowing businesses to drift away from our shores. This move will not only therefore pay for itself, but pay us dividends too.

Third, we need to re-ignite the Red-Tape Challenge and this time throw EU bureaucracy on the bonfire. During the coalition government, ministers would sit around the Cabinet table with David Cameron chairing meetings where we would attempt to seek and destroy red-tape, which all too often held back industry.

We systematically worked through over 30 sectors in our economy and Oliver Letwin was ruthless in challenging the quangos, agencies and often government departments about why a particular piece of business-strangling legislation was required.

For those who wonder how Britain managed to grow faster than our neighbours from 2013, I would suggest that the answer lay as much in this single exercise as any other individual measure.

And yet, there was usually an awkward realisation during these meetings that some pettifogging barrier to expanding business had been identified, only to then discover we were all powerless around the Cabinet table to stop it. We had come across some job destroying red-tape, straight out of Europe. As the archived red-tape challenge website reveals on its Q&A: "Question: Will you scrap EU regulations? Answer: The UK government cannot scrap EU regulations, but we do recognise the burden they impose." Tell us about it and we'll complain to the European Commission, was the bottom line.

So our new leader should repeat the entire red-tape challenge series, but this time there need be no barriers other than those that our parliament wishes to maintain. By the end of 2015 the red-tape challenge had saved British business around £13billion. We could most likely squeeze the same saving out again. That is the equivalent of our entire contribution to the EU (though we do get about £4.5billion back). Taken with the accelerated corporation tax cut, the EU red-tape bonfire would provide a compelling case for business to stay put, expand and generate even more jobs.

Fourth, the new Prime Minister should set us a new national goal. I suggest that should be to become the largest European Economy within the next 20 years. I have seen first-hand how the government's in emerging markets always set themselves ambitious targets. In countries like South Korea and Singapore, there is broad public awareness of these national goals. By comparison the United Kingdom has tended to live year to year, occasionally talking about a long-term economic plan and vaguely referencing doubling trade - but it has lacked substance and there has never been a sense of public awareness or buy-in.

Setting that direction is something that only the Prime Minister can do. Explaining it in a way that will ignite, excite and energise British citizens and business is a job few could achieve.

So a critical part of this plan is to find a leader who can inspire our nation to not only direct us back onto the economic path that we were on prior to last week's vote - but to exceed it with a vision of what Britain can achieve in the world, thereby truly enabling us to fulfil our enormous national potential.

Breaking-up is always hard to do. But now the nation has made that decision, it is our duty to make it work for those who voted Remain or Leave.

Grant Shapps is the Conservative MP for Welwyn Hatfield