Amidst all the doom and gloom of post-Brexit economy predictions, there is, undoubtedly, the potential for a thriving economy outside of the European Union. With the correct trade deals and some favourable winds behind us, we could see Britain prosper and shine.
Now, a new report from the Centre for Policy Studies by Rishi Sunak (Conservative MP for Richmond) says Brexit gives Britain the opportunity to create American-style “free trade zones”, which, in turn would fuel a massive expansion of manufacturing and trade.
The initiative claims up to 86,000 jobs could be created if it’s as successful here as it is in the USA, and would benefit the UK’s most deprived areas. The rules of the EU current make such initiatives impossible, as states are constrained from setting their own customs rates and regulations.
Free trade zones (or Free Ports) could be based around British harbours and would be within our geographic boundary, but ‘outside’ it for the purposes of customs duties. It means that goods and parts could be imported, manufactured or re-exported from the zone without incurring the usual domestic import procedures or tariffs.
Mr. Sunak has stressed how the tax advantages could encourage more manufacturing and processing in Britain, something which would be important for Britain to succeed in a post-European environment. Presently, a large proportion of the economy comes from our large and successful service economy. However, a diversification of the UK’s economy is required if we’re to grow stronger in the future.
Meanwhile the EEF have urged the Chancellor to use his Autumn Statement to tackle the fallout from political uncertainty and reassure nervous businesses by announcing measures to boost investment and growth in manufacturing.
The manufacturing trade body said research shows that one in four manufacturing companies are withholding investment plans amidst the increased political uncertainty. They said that Mr Hammond should use his statement later this month to introduce a “moderate fiscal stimulus package” that would support UK manufacturers like us, who produce PTFE hose fittings.
Figures last week indicated that manufacturing output rose 0.6% during September, beating economists’ forecasts of a 0.4%. However, that news was bracketed by the fact that over the last 12 months, manufacturing output had only climbed 0.2% as the sector struggled to maintain any kind of upwards trajectory.
Terry Scuoler, chief executive of EEF, said: “The whole of Government must get behind UK businesses and demonstrate a clear appreciation of the need to back such a strategy, backing sectors while also tackling systemic problems such as skills, energy costs and infrastructure weaknesses.”
This all comes at a time when an alleged internal memo from the Government laments the lack of a Brexit plan, pointing to understaffed government and disagreements within the cabinet meaning that the direction of Brexit is deeply confused. The government have been quick to disavow the note, saying that they don’t recognise it, but nevertheless, they appear to be grasping for a strong public position on Brexit.