AS Prime Minister Johnson returns from the G7 summit he must be struck by the importance of the economy to the country’s standing in the world. He may have said ‘F*** business’, but it is inescapable that membership of the G7 is determined by the size of the UK economy. Of course his expletive was probably directed not at business in general but at that bastion of vested interests and foreign multi-nationals, the CBI. Nonetheless there is a vestige of the old ‘Vote Leave’ organisation about our PM’s disposition towards the whole question of the opportunities presented by a ‘no-deal’ Brexit, in other words a clean break Brexit. The clue is even in the chosen terminology: Johnson chooses ‘no-deal’.
We now see within the Government a reincarnation of the core of the Vote Leave (VL) Campaign Committee, the group that steered the referendum campaign to a victory for Leave. This had the trinity of Gove, Cummings and Johnson at the front and political centre of the campaign, with other members of the current cabinet involved: Patel, Leadsom, Villiers, etc. There were also members of the ERG: Patterson, Baker and also yours truly, albeit I am now part of a set, the Brexit Party, without whom Johnson would not be PM and we would have been facing the Withdrawal Agreement number four – sadly we may still be!
So, a reason to celebrate? Not quite.
Fresh from my resignation as head of the British Chambers of Commerce in March 2016, I was then Chairman of the Vote Leave Business Council and one of only two business people on the VL Campaign Committee, the other being the redoubtable Jon Moynihan. To my horror and alarm, I quickly realised that Cummings et al did not want to put forward any of the economic and business arguments for Brexit; seizing the opportunities was not to be part of the plan. Ostensibly this was deemed to be because the economic arguments were seen as ammunition for the enemy. In fact it was at least partly driven by the fact that Gove and Cummings simply did not understand the economics and saw Brexit as essentially a damage-limitation exercise in respect of the economy. So much so was this the case that I had to create an independent media contacts programme, one that could not be blocked or stopped by the VL PR team. Gove was also dead against making the economic case against unlimited migration. Sadly this was the same philosophy that has been so damaging in the hands of the Chancellor, Philip Hammond. None of the other Brexit groups fared any better in respect of pushing the economic and business agenda.
The week after I took up my position leading the VL Business Council Lynton Crosby wrote that Leave were 27 points behind Remain on the economic arguments. Two weeks before the referendum vote he wrote that the gap had been in effect eliminated, closed to just five points. This wasn’t, however, due to the good work of the main Vote Leave Campaign. It was entirely down to the stalwart efforts of the Business Council, made up of a network of regional chairmen and business owners, many whom had been part of Business for Britain and who worked tirelessly in the regions speaking in public meetings and to the media. There was also Economists for Brexit (now known as Economists for Free Trade) with whom I worked closely. Had these groups not worked hard to put the case, despite VL, the gap would not have closed and we would likely not have won the referendum.
This is history, so why does it matter?
Simply because I detect the same mindset in government now. Brexit is a huge economic and business opportunity, not a damage-limitation exercise. Who in government is putting this case? Not Chancellor Javid. Not the PM. If they believed it, if they understood it, the only logical course would be to promote a ‘clean break Brexit’, not a ‘no-deal cliff edge’.
Only a clean break will deliver a major boost for the UK economy, the thing that the EU fear most. And it is entirely independent of trade deals, which are nice to have, but not essential.
Think of this. The retention and redeployment of the already budgeted £39billion, or a substantial part of it, would provide a one-off fund for infrastructure and business investment. If combined, an idea the Brexit Party have suggested and the Conservatives have pinched, with saving on HS2, this would be a massive boost. The whole of the UK part of the post-war regeneration Marshall programme was only £32billion in today’s money!
The re-allocation of our capital investment in the European Investment Bank instead into a UK Investment Bank, combined with a business bank free of EU state aid rules, would provide a serious stimulus to SMEs and to next stage growth private businesses.
The redeployment of the net contribution to the EU of £9billion p.a. provides a golden opportunity for tax cuts, and the better use of the balance of the gross contribution, a further £5billion p.a., would be itself a major stimulus. If combined as the Brexit Party has suggested, with a halving of overseas aid, a further £6billion p.a., it would be even more potent. This would, by the way, still leave the UK as one of the major aid countries as a percentage of GDP ahead of Germany and the USA.
Most of all, Britain should embrace the competitive currency that will result from Brexit and try to maintain this for as long as possible despite inevitable upward pressure, as it will do more to boost manufacturing and thus the regions than George Osborne ever did in his ‘march of the makers’ and so-called re-balancing of the economy. It will truly provide wealth to the regions and nations rather than merely welfare.
When combined with our freedom to have smarter regulation, to reduce or remove external tariffs, this provides a powerful economic policy set to the government on which to build world average growth of 3 per cent p.a. rather than the paltry 1.2 per cent of terminal decline which our establishment appear to be happy with (so long as they get a big slice of the EU cake).
The removal or reduction of tariffs will not just reduce the cost of living, benefiting the many, but boost the economy – truly for the many. So much for the Labour Party’s commitment to the Customs Union.
The question is, do the government understand any of this? If not, they are destined to repeat the fundamental errors of the May/Hammond administration. Not only is it vital for the country, it is exceptionally important for the regions and determines our foreign policy towards the EU, the USA and the Commonwealth.