6 Months On and “Opportunity” is the Word

The campaign before the referendum on June 23rd was – as almost every election or referendum is – smeared with exaggeration, soundbites, the twisting of truths, emotion and scare-mongering, on both sides.

It was always inevitable then, that the winning side would face accusations of foul-play and that the outcome is therefore illegitimate. If I’m honest, I’d probably have had a part to play in that if we have voted to Remain.

Counterfactuals are necessarily difficult to substantiate. But conveniently, it’s only because we voted Leave that some of the scaremongering of the Remain side can be verified with the true outcomes of things in the immediate aftermath of the vote to Leave.

During the EU referendum campaign, voters were told on many occasions that there would be significant economic damage to the economy – that we’d see a recession before the end of 2017; that employment would fall; that immigration officers would be kicked out of France and that there’d me migrant camps in Kent. We were told there’d be an emergency budget; that each family would be £4,300 worse off; that the stock market would collapse, and that the Scots would all want to leave.

How’s that working out then? Well, to the embarrassment of much of our political class, it’s not exactly panned out that way.

British stocks are the best performing in Europe. Employment has reached a record high and is still increasing. The emergency budget was dropped within days of the vote and no-one seriously attempts to defend Osbourne’s figure anymore. What’s more the support for Scottish independence hasn’t increased at all, and the popularity of UKIP as a party for government has fallen.

Yes the pound has also fallen off a cliff, but last year the IMF said it was 13 percent overvalued anyway. What’s more, currency devaluation isn’t entirely a bad thing. They’re not national virility indicators, but simply economic shock-absorbers. Take Greece for example – they’re in desperate need of a more affordable currency, but the Euro is pinned up by the stronger economies in the EU, and Greece is left paralysed.

Just as in politics things are rarely as bad as they first seem to be, it is also the case that things are rarely as good as they look. For those who spoke to me prior to the referendum, I always said that I was a 70/30 Leaver. That is, I fully recognised the significant risk there is to our economy as we re-align our trade relationships with the rest of the world – and there truly are real risks that the government will have to navigate with an open mind and with broad horizons.

But I saw Britain leaving the EU as a removal of a restraint, rather than a guarantee of a better outcome. I believe it is appropriate to remind ourselves, whichever side of the debate we finally fell down on, two of the main benefits of becoming an independent country again:

  • Our potential to develop new trade relationships with the rest of the world will be restored.
  • The division, disenfranchisement and isolation that many of our communities feel can begin to be healed as we strengthen our democracy and make every citizen feel like they’re being listened to.

There are a number of factors which we couldn’t have known prior to the referendum that give me more confidence than I had before that Theresa May will find the right deal for Britain – she holds the Aces in these negotiations:

  • British markets have grown not shrunk since the vote to Leave.
  • Trump is much more pro US-UK trade than Obama and will put us to the front of the queue for a trade deal. He is also anti-EU.
  • The Euro is in tatters and is widely recognised as the single biggest failure of the whole EU project. Loosing Britain as a close trading partner only weakens it further.
  • The SNP has failed to use the Leave vote to boost support for Scottish independence.
  • We’ve received numerous notifications of intent to develop free trade agreements with some of the world’s fastest-growing economies and many of our closest allies.

Cumulatively, these facts give May a strong and legitimate negotiating position – we really don’t need them as much as they need us. And if we’re honest there’s not much the EU could give us if we wanted it to. All we’re really interested in, is tariff-free access to buy and sell in the internal market. She’s holding the negotiating power.

And this is telling. When a country is free to engage with the world on its own terms, it becomes far less dependent on any one corner of the global market. As a free and independent country, we have a huge potential which we’re about to realise:

  • Making our own laws
  • Trading on the basis of mutual product recognition, rather than common standards
  • Stronger borders for greater security and a fairer immigration policy
  • Being free from the common external tariff
  • Rediscovering our old friends in the Commonwealth and the English-speaking, common law nations

In 1817, British political economist David Ricardo, along with Adam Smith, proposed the idea of “comparative advantage” – a concept which is widely considered to have been the driving force behind global poverty reduction and alleviation over the past two centuries. It focusses on industry specialisation and free trade as the best sustainable system for global economic development.

And the best thing, is that when markets are free, and trade is easy, it happens naturally. It doesn’t need huge building full of autocrats deciding on the most efficient means of production, distribution and exchange. Optimum feasible efficiency is arrived at through voluntary bilateral agreements.

By leaving the common external tariff, we will be doing perhaps the greatest favour to not only ourselves, but to some of the poorest countries on earth. We will be allowing them to trade with us – sell us their coffee, fruit and vegetables and raw materials. As voluntary exchange and comparative advantage and specialisation run their course, and the invisible hand of the democratised pricing mechanism makes the decisions, the poorest are freed to lift themselves out of poverty by trading the products of their own labour.

We also have a huge opportunity for reform at home – lower and flatter taxes, a simpler and more localised welfare system, reduced regulation. A freer and most prosperous home.

As Daniel Hannan wrote recently in his book ‘What Next: How to make the most of Brexit’:

“After forty-three years, we have pushed the door ajar. A rectangle of light dazzles us and, as our eyes adjust, we see a summer meadow. Swallows swoop against the blue sky. We hear the gurgling of a little brook. Now to stride into the sunlight”

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