Getting the house in order

Simon Haskel on priorities for the UK economy, post- the EU referendum result

The title of a Conservative-led debate in the Lords this week on the UK’s departure from the European Union suggests that Brexit presents new opportunities in world trade. Rather odd, given that I thought we were already an outward looking champion of global free trade, active in Asia, North and South America, the Middle East and the Far East – with trade delegations and Whitehall departments promoting our goods and services. So if the debate implies that all of this was hindered by our EU membership, my response is one word: Germany.

The UK has also been very much open for global free trade business at home, with the proof lying in the large number of UK businesses owned overseas and the success of inward investment. Much of this was influenced by our EU membership. After all, what is modern world trade? Relationships that lead to investment, trade in goods and services, and the movement of people which nowadays is both interconnected and interdependent. And much of this taking place in an intangible digital world. That is why it pays to belong to a single market – to facilitate this rather complicated structure.                                  

But tariffs are only one part. More important in modern world trade are the rules and standards.  Not only technical standards set by standards institutions but also the myriad of product and service rules on health and safety, animal welfare, tax avoidance, labelling, the environment and modern slavery. Failing to accept these standards means we just enter a race to the bottom.

While internationally I can’t see any benefits of leaving the EU, domestically I see just problems. Our membership of the European Space Agency (ESA) for example, provides access to satellites which touch many sectors of our domestic economy. Healthcare meanwhile, is being revolutionised by Gene Editing and Stem Cell Therapy, much of it funded by the EU Horizon 2020 Programme and work at the Crick Institute. But it is well known that, on average, international collaboration is of higher quality than national research.

So should we try to remain in the ESA and the Horizon Programme?

I think what we have to do first is to get our own house in order, to make our own economy more resilient to a world of free markets. Build back our currency. Modernise by building in the fourth industrial revolution. Re-double our efforts to encourage long term investment. Become less dependent on low cost labour and immigration. Focus on employee engagement and a real growth in wages through investment and productivity. Raise the standards of our goods and services. This is what most world trade is about – not tariffs. 

What does this all add up to? To get rid of uncertainty, maintain our access to the single market through membership of the European Economic Area with generous movement of people. Sign up to the same existing arrangements between the EU and World Trade Organisation and get on with the real work of implementing an industrial strategy to build our own economy.

Lord Simon Haskel is a backbench Labour Peer in the House of Lords. He tweets @simon_haskel

Published 26^th October 2016