My recipe for the Great British Brake Off – How to ensure British business thrives post-Brexit

My recipe for the Great British Brake Off – How to ensure British business thrives post-Brexit

John Longworth will be speaking at BrexitCentral’s Rally at the Conservative Conference alongside Theresa Villiers MP and Daniel Hannan MEP in Hall 5 at the ICC today, Monday 3rd October, at 5.45pm.

In the “Great British Brake Off” we can have our cake and eat it! Getting the best out of Brexit for Britain and British business will require imagination and a preparedness to try not to simply recreate a poorer version of what we had before. If we are to reach our true potential as a nation, it will require the Government, in cooperation with business, to re-imagine the economy and make the UK the best place in the world to do business. We have all the necessary ingredients but to avoid a soggy bottom of the economy and a collapsed growth, it must be baked at home.

One of the great benefits of the creative disruption of Brexit is the need to do it for ourselves, with no hiding place. In this context, many of the positive benefits of Brexit and solutions to our future prosperity, begin at home. Our ability to grow GDP per capita and to make do with less cheap labour, depends on improving productivity and aiming for a high-wage, high-productivity economy.

In the same vein, now that we have a re-based sterling and a competitive currency, by far the greatest boost to exports will come from having high-quality, great-value goods and services which flow from a strong and competitive economy at home. While providing effective and practical export support (as do competitor countries) is important, we cannot succeed without producing the goods and services that others might want to buy at keen prices.

It is encouraging that the new Chancellor, Philip Hammond, has already pointed to one of the ingredients in this competitive cake, that is infrastructure. But it will require a relentless focus in government, on providing the resources necessary to create the best environment for enterprise.

So, what are the ingredients to make Britain the best place in the UK to do business?

By far the most important is access to finance, long-term loan capital at reasonable rates and working capital, so that our entrepreneurs can grow their businesses without the necessity to sell out and lose control if they do not wish to. It is these companies that are the future of Britain and only if they grow will they become the FTSE companies of the future.

Companies can only do business and trade with the support of good infrastructure. In particular, in a modern economy, fibre and wireless speeds and connectivity need to become a national priority, as it is in South Korea and the Baltics. We also need better roads, more rail capacity and air transport links, without delay. These are so important in facilitating a productive economy and have been long neglected by successive governments.

A skilled workforce is also key. The Prime Minister has made a good start on education by providing for academic access, so that all of our bright children can reach their potential, rather than this being dependent on being able to afford private education, housing in the catchments of posh comprehensives and tutors. But it is equally important that provision is made from an early age for artisanal and technical skills training and, not least, for high quality apprenticeships. Britain has endured poor general education for a very long time and as a consequence, our economy has suffered.

Proper export support and a focus on getting ahead of the curve in emerging economies as well as the anglophone world is crucial. The Government needs to be much more imaginative and results-focused, on trade. Inward investment is good for the UK but not unequivocally, only if it does not involve losing R&D, decision-making and jobs. While it might be an anathema to those in the City who make their living flogging things off, having a clear policy on retaining, for the nation,  the family silver of key sectors, need not be incompatible with an open, competitive, and enterprising economy and no other country in the world would consider it so. In fact it is important for our long term prosperity.

Just as important in building a high-wage, high-productivity economy and providing an environment of continuing stability in which business can have confidence, is the control of borders. Access to skilled workers who companies cannot train in sufficient numbers for themselves, while managing the demand for national resources through the control of immigration, are important in a properly balanced economy and not incompatible with a low-tax and high-growth economic environment. In fact it is a prerequisite for long-term stability and sustainable growth.

Finally, the Government must encourage business investment and R&D, the quid pro quo being that there should be an obligation on business and academia to retain intellectual property for the benefit of the UK economy, especially where taxpayers have invested or gifted tax breaks from which they, themselves, would not be able to benefit. Likewise, UK companies need to make much more of intellectual property rights, as do US and Japanese enterprises. Tax breaks would help – direct government support is sometimes appropriate.

While government can provide some of the ingredients, it is firmly the responsibility of business to take the necessary long view, to embrace creative disruption, to take risks and to invest – something in which the UK historically has underperformed.

When combined with the post-Brexit repatriation of EU contributions, a necessary determination to deregulate and the removal of unnecessary tariffs, this domestic, chocolate layer “brake off” will far outweigh the current focus on the lightweight macaroon of single market negotiations.