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Beyond tariffs: how can Britain boost trade post-Brexit?

Britain came to pre-eminence by sourcing goods the world wanted to buy. Can it now seize trading opportunities outside Europe? An expert panel at Conservative Party conference discussed the issues

By Prospect Team  

Six months before Britain is supposed to leave the European Union, the question of trade—and anxieties about the UK’s ability to continue trading—have moved to the centre-stage of politics.

In a packed Birmingham hall at the Conservative conference, with several journalists in attendance, David Leighton spoke for Associated British Ports and soothed a few nerves. Despite some of the press panics about looming difficulties at the Port of Dover, he said, this was in some senses a unique bottle neck. Britain had many other ports which had historically handled more of the cross-channel traffic than they do today. Many of these are run by ABP, where grinding, detailed work was underway to ensure that the freight could continue to move. And unlike at Dover, many had good clear roads, and acres of space, in which to accommodate all sorts of contingency procedures and arrangements that might be required.

As minister from the Brexit department, Suella Braverman spoke in enthusiastic terms about the opportunities ahead. For her, the fact that most trade already comes from outside the EU, and particularly the fast growth in many non-European economies means that the possibility of Britain cutting independent trade deals was extremely exciting. She very much hoped, and expected, that it should be possible to conduct a deal with Europe which would retain frictionless trade. But Britain must, she insisted, be ready to go into negotiations ready to countenance no-deal as a fall-back, and believed that administrative energies must be expended on retaining this as a credible option. She was encouraged to hear about the detailed work underway at ABP—and also, as was set out by a member of the audience—at the Port of Dover.

John Howell, the prime minister’s personal envoy for promoting trade with Nigeria, made some interesting comments on how commercial relations could be used as a force for social and political good.

Professor Alan Winters darkened the mood, arguing that a no-deal Brexit—or even a negotiated but hard exit from the EU—could seriously disrupt the most important source of British trade. He conceded that the economic catastrophe that some had forecast in the aftermath of a Leave vote had not come about post-referendum, but pointed out that many of the most dramatic of these had always been about when Brexit actually happened, so he cautioned against complacency. The biggest issue, as he saw it, was not so much the tariffs that would kick in, especially in particular sectors, but rather than new need for paperwork which would baffle many firms.

Josh Hardie from the CBI admitted that it was an unusual experience to find himself at a Conservative conference where his business organisation had been condemned as “a grave menace” by a senior MP and former minster (Steve Baker). Such were the burning, and sometimes strange, passions unleashed by the Brexit debate. The most pressing high-level requirement for Brexit now was to avoid the chaos of no-deal, which would be seriously disruptive. And the single most important practical priority—whether it be in an unhappy no-deal situation, or in the happier circumstances of a deal—was to make sure that businesses, especially smaller ones, had the advice so that they knew about any changes in what was involved in exporting. New research from Revenue and Customs indicated huge numbers of firms—the total running into six figures—were concerned that they were unsure what was involved.

Tom Clark chipped in from the chair that he could remember for several years in advance of the creation of the single market, which came into effect at the dawn of 1993, that TV and other advertisements were encouraging businesses to get themselves “ready for 1992.” Seeing as we are, potentially, now only six months from leaving the single market under no-deal, the lack of comparable preparations was stark.

Leighton, who was generally optimistic about the ability to “keep trading” through most scenarios, did agree that a sense of bewilderment—a feeling of “what are we meant to do, and when?”—was registering among a number of exporters. He proposed that a very significant measure of reassurance could be provided were the government to introduce some sort of transitional amnesty or dispensation, which would reassure firms that they would not be penalised, fined or clobbered with punitive taxes for a missing a bit of paperwork or a particular requirement at the point of change, before they had had time to realise how the requirements for export had changed. Braverman agreed that careful thought was needed about how to protect firms—and support exporters—through transition. She also suggested that there might be need to broker a “transition to no-deal,” in the event that a satisfactory overall agreement could not be reached.

From the floor, the panel heard with great interest from a young woman with her own business—supplying tights that “actually fit”—who had met with great success in the UK, and was now interested in views on whether it was time to export. The most cautious response came from Winters, who said she should get on with exporting globally, but should be wary of investing too much in exporting to Europe until next year, since at this stage it would be hard to know what was involved. Nonetheless, with that caveat, he encouraged her to press ahead. And on this, at least, Braverman, Leighton and Hardie all spoke in the same emphatic tone. The woman should go ahead, export and could hope—in the process—to help herself and her country to prosper. Britain came to pre-eminence by making and sourcing goods the world wanted to buy, and shipping them overseas. That was the past. Whatever the vicissitudes of Brexit, in the end it will have to be the future as well.

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