Why the UK’s economic prosperity lies outside the EU

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James Faulkner

A few years ago, I was lucky enough to buy my first house. In order to help pay the bills, I took on a lodger who was studying for a master’s degree in Engineering at my local university. We got on very well, and I soon discovered that my lodger, who was originally from Colombia, wanted to work in the UK once he completed his studies.

I assumed he would find work easily, being so highly qualified in an area where the UK is crying out for workers. As it turned out, the salary for the job he was offered, albeit being well above the UK average, was fractionally below the requirements for non-EU citizens in order to gain a work visa.

Here was a highly educated and bright young man who would no doubt have made a meaningful contribution to the UK economy had he been permitted to stay and work here. But it was not to be. Instead, he was discriminated against in favour of workers from EU member states, for whom there is no minimum salary threshold.

To me, this encapsulates the mistake the UK has made in pinning its colours to the EU mast for so long.

Remainers like to point out that the EU is the UK’s largest trading partner, which is of course true. But non-EU trade – the trade that Britain conducts with the other 167 nations on the planet – is already larger and is also growing at a much faster rate. For example, while the value of UK exports to the EU actually declined between 2011 and 2016 (from £243 billion to £236 billion), exports to the US rose by more than 26% over the same period, to £100 billion.

Incredibly, the EU has yet to negotiate a free-trade deal with the US, which remains the world’s largest and most influential economy. This calls into serious question the efficacy of the EU as a trading bloc, especially given that the US is supposedly one of the EU’s closest allies.

What’s more, the EU’s share of global economic output is declining – and is expected to continue to fall in future. The richest pickings in terms of global growth are to be found further afield – in places like Oman, where UK exports have increased by 354% since 2010; and Kazakhstan, which was up by 210% to £2 billion over the same period.

In order to secure its trading relations with the fastest growing economies of the 21st century, the UK needs a nimble trade policy which can react quickly and independently in the interests of UK trade. This is surely infinitely better than relying on the EU’s lumbering bureaucracy, which took over seven years to negotiate a free trade deal with Canada!

Of course, Remainers will claim that negotiating the UK’s own free trade deals will prove just as tricky. But they forget one crucial difference: the EU has to satisfy 27 disparate member states when it negotiates, whereas the UK will in future be negotiating on its own behalf. This means the UK’s trade policy will be tailored to suit the interests of British industry and British citizens, rather than to placate French farmers and various other vocal EU lobby groups.

In embarking upon the UK’s new international mission, we have the great advantage of already being a very outward looking nation – in fact, we’re head-and-shoulders above the rest of the EU on several metrics.

The UK remains the top destination for Foreign Direct Investment (FDI) projects in Europe – and is second only to the United States globally in its ability to attract overseas investment capital. What’s more, it seems to have retained its appeal as an FDI destination in spite of all the talk about the risks to the UK economy from Brexit. The City of London remains arguably the world’s go-to financial centre, with an ever-greater number of foreign IPOs (initial public offerings) highlighting its attractions. Due to the legacy of the UK’s imperial past, we have extensive links across the globe, and many of the world’s nations emulate the UK’s parliamentary and legal system. English is the language of global trade. We are the world’s second-largest exporter of services (after the United States)… I could go on…

Don’t get me wrong, I am not under the illusion that pivoting away from the EU won’t cause some disruption in the short term. But the long-term gains on offer through re-aligning our economy towards the more dynamic parts of the world are surely worth the hassle. Maybe then we can welcome my Colombian friend with open arms.

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