The serious business of negotiating Brexit will soon be underway. The government is about to publish a series of position papers, which will set out its thinking on everything from the border with the Republic of Ireland, to technology, immigration, regulation and taxations. We saw the first of those this week, with a proposal to remain in a temporary customs union. How much the rest of the EU will agree to remains to be seen but at least the British view of its relationship with the EU will have been set out.
Business, on the other hand, needs to up its game. It should stop moaning about what a mistake it all is and start arguing for the kind of policies it wants because if it doesn't do that now, it will soon find that all the important decisions have already been made. So what should business be arguing for? Here are five good places it could start.
First, immigration. True, the leave vote was to some extent driven by anger over the numbers of new arrivals. But British firms have become used to an endless supply of cheap, relatively low-skilled labour and it is not going to be easy to change that now. Just because the UK will have control of its own borders again doesn't mean we have to close them.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
A post-Brexit immigration policy should draw in people from around the world, and not just the EU but including lots of Poles, Hungarians and Romanians as well. Over the medium-term, that will keep the economy expanding and that will be better for everyone.
Next, completely open trade. There doesn't need to be a debate about whether we stay in the Customs Union long term, or whether we strike trade deals with different countries around the world. We should simply declare the UK a unilateral free-trade zone, dismantling any form of protection, and then ask other countries to do the same for us. Even if they refuse, we will still benefit, because tariffs are ultimately paid by customers in the country that imposes them. Over time, increased competition will strengthen British competitiveness, just as it has done for every other country that has abandoned protectionism. Business needs to be taking the lead in making that argument because it is business that will ultimately benefit.
Thirdly, lower business taxes. No one realistically thinks we can turn the UK into Singapore-on-the-Thames (even if it might be a good idea). The UK is too big a country, with too strong a tradition of big government, for that to happen. But once we leave the single market, we will need some kind of competitive edge. Lower business taxes is a good offer, and one that can easily be delivered.
Fourthly, help the few sectors that will genuinely suffer. Car manufacturing, aerospace and financial services all benefit significantly from EU membership and there is no point in pretending they won't take a hit. But that can be mitigated with the right policies. Where necessary, companies might have to be offered some subsidies to help them through a transition. At the same time, in those sectors we should harmonise our regulations with the EU. It will be far easier for those companies if they are still effectively operating on European regulatory standards. That means some notional sovereignty will be surrendered, but no one is really that bothered.
Finally, focus on the sectors of the economy where leaving the EU will help us. In areas such as technology, where the EU is increasingly protectionist, to agriculture and food manufacturing, we can become one of the most deregulated countries in the world and a laboratory for new ideas. Over time, that will lead to more inward investment.
-
Investors are snapping up gilts thanks to tax incentives – but is your money better off elsewhere?UK government bonds, also known as gilts, are proving popular with investors so far this year, thanks to higher interest rates and the attractive tax incentives they offer. Should you invest in them?
-
Rightmove: Asking prices edge closer to record peakAsking prices have been driven up by the top-end of the market, Rightmove has found. But how does the situation look in your area?
