My parents always taught me to ‘stop moaning and just get on with it’. Although I believed firmly that a Remain vote was in Britain and Europe’s best interest, this is what we must now do. There will be challenges to our economy, our security, our influence in the world and, above all, our social cohesion. With the right policy choices, however, the country can come out on top.
The discomfiting national divide illuminated by EU the referendum at first made me quite downbeat. This column originally was an elegy to our disharmonious situation; a lament of the fact that, increasingly, different sections of our society seem incapable of connecting with and understanding each other.
But that is not good enough: Britain has been through tough and uncertain times before and we have pulled together to succeed. We need a conservative One Nation agenda to begin to heal our disunity. This will be an agenda that seeks not to dichotomise, but to listen to the concerns of the entire nation and pursue policies that try to make Brexit work. This may seem like woolly rhetoric, so below I will detail some policy ideas for doing this – the kinds of policies which I hope the next Conservative leader and Prime Minister will adopt.
The first priority for our leaders is to show bravery and boldness in this threshold moment for our country. Brexit was not the outcome I and many millions wanted, not to mention the PM, senior government figures and most MPs. But democracy has spoken and now we have to face the future. Our future direction will be different and challenging for sure, but we mustn’t shy away from this re-imagining. So those at the top – particularly those who campaigned for Brexit – have to take responsibility. At the time of writing, the silence of Messrs Johnson and Gove has been deafening. Even if the former Mayor of London is not to be the next PM, he and others like him need to stand up and be counted right now.
Second, the Conservative Party has to truly be the party of One Nation. This means fighting fearlessly for the continuation of the Union – and appealing to the Scots and Northern Irish, in particular, that breaking up the UK is the worst possible response to EU withdrawal. There is a mightily strong economic case for keeping the Union together: an independent Scotland would inherit an unsustainable fiscal deficit of around 10% of GDP, and the peace process in Northern Ireland is best served by protecting the current arrangements.
In addition, the Tory Party has to lead the way in making politics an inclusive business. The level of vitriol thrown around by partisans is reaching intolerable levels, with abuse – written, verbal and physical – becoming commonplace. Different sides of the political divide have to start seeing opposition parties not as the enemy, but as the opposition. Our enemies are things like recessions, terrorism, crime and climate change. We all want to defeat these things, but have different ideas about how to. Conservatives must therefore talk to people of lower and higher income, to ethnic minorities, to native Brits concerned about immigration, to young and old and to the metropolitan and the provincial.
Clearly, one of the biggest challenges in the months and years ahead is going to be our economy. Without a strong economy, divisions will exacerbate and policy will become harder to implement. Brexit will deliver a shock to markets and will delay investment decisions, but a clear message from our leaders about our future direction will help to assuage fears. The exact trading relationship with Europe will be complicated, and there will likely be divergence between what we want and what the EU offers. We will to a degree rely on European good faith, but there are moves we can make to set ourselves up as well as possible.
Many of our economic difficulties stem from domestic policy shortcomings, but some new ones will be thrown up by Brexit. So, we should consider changes to our tax and regulatory system to encourage firms to remain in Britain and to encourage entrepreneurship. Cuts to corporation tax and bank levies may not be popular to many on the Left, but they will help to sustain Britain’s financial sector. Love or (mainly) loathe banks, they contribute nearly 10% of GDP, sustain tens (if not hundreds) of thousands of jobs and they pay billions to the exchequer in tax.
We should also consider removing export tariffs in order to attract manufacturers, and to promote free trade with countries around the world – including the EU. This will require adjustment and may put downward pressure on employment. A weaker pound, however, should stimulate exports to a degree and make Britain more competitive. In the long-term employment should, if all goes well, recover. The government must also make a committed effort, right away, to refill the civil service with specialist trade negotiators, after decades of letting the EU take responsibility for such matters.
There are many economic problems which arguably are unrelated to the EU, but which, if addressed and alleviated, would help boost the economy. Our tax system still contains too many inefficiencies, for instance in the way property is taxed. Lower income people still pay too much in tax – especially through national insurance – which reduces their purchasing power, and lowers aggregate demand. The replacement of working tax credits with an American-style earned income tax credit – a kind of negative income tax – is a particularly interesting idea for encouraging work whilst preventing welfare dependency.
Housing pressures, too, are a clear problem which successive governments have done too little to ease. Byzantine planning laws must be reformed to ensure that millions more houses can be built. This will mean central government overriding local councils if need be; a poor and insufficient availability of housing is one the factors holding back Britain’s disappointing productivity – which itself has held down wages.
Another check on productivity growth is our chronic underinvestment in infrastructure. Whether it’s airports, roads, flood defences, broadband or intercity railways, we don’t spend enough. Of course, infrastructure is not just down to expenditure: sometimes cheaper schemes can deliver more economic and social benefits than grandiose vanity projects. But as treasury guilt yields are hitting record lows, government borrowing is becoming very cheap. 10-year treasuries have recently dropped below 1% – the lowest since the 18th century – meaning now is the time to invest. This doesn’t mean fiscal profligacy, but we will need to prop up demand in the face of the Brexit challenge.
The new PM also must make good on the Brexit campaign’s promise to increase NHS spending by £350m per week. This promise was based on a bogus claim, but a) this funding boost will go a long way to helping the health service, and b) if we don’t want trust in politicians to descend further, is must be followed through. The same goes for immigration: those Brexit campaigners now claiming that immigration might not go down should pause and think about the campaign they just ran. What we need is a sensible immigration discourse which makes clear that foreigners will not be deported and that immigration will not stop, but which also reduces the amount of unskilled labour coming into Britain. We must not underestimate the anger this creates in low income towns around the UK – anger which, if ignored, could easily translate into xenophobia and hatred.
Finally, policies will be needed to re-affirm Britain’s commitment to the world. Brexiters have repeatedly stated that they want to open us up to the world – now they must make good on their word. To this end, we will need to increase defence and intelligence spending. I am no militarist, but this will show our commitment to NATO and the ‘five eyes’ intelligence sharing community. The Trident nuclear deterrence renewal and our aircraft carrier programme must be completed – nothing projects power quite like nuclear weapons and carriers. The safeguarding of the Union will be vital to ensure the long-term viability of our independent nuclear deterrence.
There are plenty more policies that should be considered, and many people will offer alternatives to the above – all of which should be debated. But now is the time for creative thinking. We can no longer afford to keep kicking things into the long grass. Above all, politicians should start thinking about those who have felt voiceless for years. We won’t re-stitch Britain by receding to our ‘sides’ and ignoring those we find unfamiliar. We will only do so by bridging the gap.
This is my optimistic analysis of Brexit and what it means for the future. Maybe it will fail, but I hope not. There’s no point worsening divisions now – let’s pull together, starting by being a little kinder to each other.