With the UK almost free from the EU's constraints many opportunities are set to arise. But the government must adopt the right policies and create a new dimension of finance that can match other countries, writes John Longworth.

Brexit should give us the freedom to nurture, develop and grow neglected enterprise, rebalancing the economy by giving activity as much focus as we do the city. This of course depends upon the government not iving in to the controlling tendencies of the putative mini superstate across the channel, and this in turn depends upon those in charge recognising that there is an issue, an opportunity, and the means to seize it.

The challenge of accessing finance for new and growing enterprises are two sides of the same coin and need to be tackled if the U.K. is to improve its growth, productivity and security as an independent, sovereign state. This perpetual regime of under investment, loss of control and flogging the family silver to foreign acquirers has defined Britain's relative industrial decline for more than a century. In the last fifty years it has led to an unsustainable current account deficit. The investment gap was even identified in the pre-Common Market world and known as the MacMillan gap. At that time 3i was established to try to tackle it.

The post Brexit future now presents an opportunity to this cancer at the heart of the U.K. economy freed from the one sided constraints of the EU Single Market and Customs Union. But it does depend on the government adopting the right policies, which won't be popular in some quarters. The city makes money out of selling businesses and providing Private Equity finance and long may it continue, but not at the expense of the rest of the economy.

There are signs that policy is moving in the right direction if not for the right reasons. The recent introduction of enhanced rules relating to the foreign acquisition of strategic security related businesses in a range of sectors is evidence of this.

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However, it is important to recognise the significance of Foreign Direct Investment. FDI adds real value. It creates new production, both in manufacturing and services, and new infrastructure. It retains development and control in the U.K. It improves productivity.

But it is likely to be net negative to the long term economy if it acquires existing businesses and results in the loss of control, development, and manufacturing. Even where this does not occur the short term boost in finance is soon offset by the remittances to abroad. The resultant current account deficit from this and trade imbalances leads to a continued need to sell assets which simply cannot go on.

A long term economic detriment test for takeovers would help resolve this. It is also vitally important that patient loan capital is available to those entrepreneurs who wish to keep control of their businesses and grow. The setting up of a proper British Business Bank of scale should be considered. The Germans have continually been evading state aid rules. Their business bank network has been putting over 30 billion euros of loan capital into their middle sized business sector, at favourable rates of interest.

Other European and Asian countries have similar arrangements, and Silicon Valley in the USA would not exist had it not been for state backed finance. Only the U.K. has an almost religious aversion to this, driven partially by an overweening establishment focus on the city.

Now we are to be free of EU rules we can create a new dimension of finance to match that of other countries, something we have continually been prevented from doing.

These measures are among the most vital requirements if we are to have a post Brexit growth economy and maintain true independence as a nation.

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