An export-led vision for the UK
Britain needs to expand its exports to enable maximum growth once the transition period with the EU ends. The UK must drive wealth into our industrial heartlands to level up the British economy, and make Britain, once again, the industrial powerhouse of the world, writes Brendan Chilton.
To aid the United Kingdom's post-Covid economic recovery and ensure we maximise our growth prospects at the end of the transition period the UK needs to export more than it currently does. Through the Victorian era the UK was famously the workshop of the world and British manufactured goods dominated world markets.
Even as late as 1948, the UK accounted for around 11 per cent of exports as a share of global exports, but this has declined over time to around 3 per cent now. It has paralleled the UK's decline as a global player and it cannot continue. The UK being so heavily dependent on the service economy leaves us exposed to international market fluctuations, more so than those countries that have a more balanced economy. We need change.
Many countries through recent history have undertaken measures to boost their exports. The USA, Japan, and China have all employed various currency depreciations to boost production and investment. When the UK broke free from the Exchange Rate Mechanism it too experienced a boost in exports. This tried and tested method of a competitive exchange rate is essential to driving up production and exports. This would enable British manufacturers and British businesses to increase investment here at home and increase diversification of market opportunities. So, even in the event that the British economy should at a future point experience a downturn, British firms trading abroad will on the whole be able to continue in a relatively positive way.
Covid-19 has demonstrated some fundamental weaknesses in the British economy. We are far too dependent in key strategic areas on other countries where we ought not to be. While it is perfectly acceptable to be dependent on fellow democratic nations with liberal markets, our dependency on authoritarian regimes cannot continue at present levels.
We need to be less dependent on countries such as China, especially in key industries of national importance. We also need to ensure that the rest of the world, particularly developing countries, still see Britain, and the west more broadly, with its democratic structures and market system as the best way to operate a society. Selling more abroad does just this. Building up a brand identity through increased exports can demonstrate the strength, wealth and prowess of the producing nation. That is the business in which we should be engaged.
The UK must also seek to remove as many barriers to trade, and consequently exports, as possible. Being outside of the EU's Customs Union will be the first step to our great revival as an exporting nation. As the UK embarks upon its future outside of the EU, it must, where possible, ensure tariff and non-tariff barriers are reduced.
This is particularly important when negotiating with countries with an emerging middle class among Commonwealth, Asian and Latin American nations. We need a combined approach and while doing this we need to ensure that our domestic supply side policies are altered to increase competitiveness. A real focus on technical training as a viable alternative to university study is fundamental to the UK's success and to remove unnecessary regulations that restrict business. The government must take this more seriously.
British family owned firms need the government to create conditions to maximise exports. But often the barriers between firms and government can appear to be greater than the barriers for exports. Government needs to be smart in its dealings with family run and family owned firms.
All government measures, legislative or regulatory, must answer one simple question: does this measure help or hinder business in delivering more exports? Institutional obstacles, such as targets and assessment procedures, need to be reviewed. The risk-adverse nature of the Civil Service needs to be altered to encourage British exports to increase to a more diverse set of countries. It cannot be right that 80 per cent of exports supported by UK Export Finance went to just five countries.
This is the challenge of our time, to drive up our exports and demonstrate that the United Kingdom can pay its way in the world. We should ensure that "Made in Britain" becomes the new norm and something we can all be proud of. The jobs created will drive the wealth in our old industrial heartlands and level up the British economy. Secure in our supply chains and being less strategically dependent on other countries will enable us to play a greater role in international affairs with strength in our industrial might and military.
This exciting agenda is one that should be grasped to transform the prospects of this country and to make Britain one of the great industrial powerhouses of the world again. Let's make it in Britain.
