As the UK prepares to leave the EU, it has a chance to develop an independent trade policy for the first time in over four decades. Yet there is a risk that the substantial benefits of new trade deals will accrue primarily to those areas that have already benefited in the past.
A new Centre for Policy Studies report, ‘Tipping the Balance’, authored by Eamonn Ives and published ahead of the Margaret Thatcher Conference on Britain and America – the think tank’s flagship event, which will have trade and investment as one of its core themes – shows how changes to trade and investment policy could be a vital tool in driving growth in some of the country’s most deprived areas, delivering on the Government’s objective of rebalancing the economy.
The report, sponsored by Raytheon UK, stresses that the government needs to work sympathetically with the needs of businesses and explains how levels of exports and inward FDI are intimately correlated with the economic success of a region – and how this can influence economic inequality between regions. The report draws on case study examples from across the UK – including in Broughton, North Wales, which has grown into a UK centre of excellence for developing airborne intelligence, surveillance and reconnaissance (AISR) technology following initial seed investment from the United States.
Commenting on the pamphlet, Robert Colvile, Director of the Centre for Policy Studies said:
‘We all know that Britain’s economy suffers from alarming regional inequality. To make the most of Brexit, we need not just to boost trade but to ensure that those regions that have been left behind are given the tools to compete for it. Opportunity Zones and free ports can help spread prosperity beyond London, offering a tangible post-Brexit boost to some of our most deprived communities.’
Richard Daniel, Chief Executive of Raytheon UK, said:
‘We must ensure investment, both domestic and foreign, encourages trade and economic growth in all parts of the UK, and helps us to rebalance the UK economy. I’m pleased that our work with the CPS is helping to shed light on this. Raytheon UK is invested in Britain and, with sites across the country, we will continue to support investment across our sites developing unique UK sovereign capabilities regionally.’
The report is part of a wider CPS project on economic rebalancing, which will be published later in the year. Specifically, the report recommends:
- Introducing Opportunity Zones in the most deprived parts of the UK, with firms incentivised to locate there through tax advantages.
- Alongside this, establish free ports once the UK leaves the EU, to incentivise economic activity in some of the nation’s most deprived regions – as advocated previously by Rishi Sunak MP in his CPS report The Free Ports Opportunity.
- Prioritise rolling over existing preferential trade agreements the UK enjoys as an EU member state before 31 October 2019, then look to negotiate new trade agreements with other developed and high-growth economies and trading blocs around the world.
- After that, Britain should endeavour to re-examine existing trade agreements to see how they can be improved, particularly with regards to removing non-tariff barriers.
- Reform export credit regulations to ensure that any government help goes to where it is needed most, as well as examining how more private finance can be leveraged to help British businesses increase the amount they export.
To read the full report, please click here.190624101915-TippingtheBalance1