John Longworth says the UK’s exit from the European Union, with its debt woes and clunky regulatory system, will unleash the power of the nation’s traditional advantages and create sustainable prosperity
In the first part of the 19th century, when Britain was fully in the white heat of its booming economy as the first industrialised nation on Earth, a political battle took place. This was the period of the great reform acts, opposed by the establishment of the day. These led to not just the suffrage of many more citizens, extending the democratic base and therefore the legitimacy of the state, but also to the development of free trade.
Perhaps counter-intuitively at this time, the UK reduced or remove external tariffs, because it was recognised that tariffs were self-harming. In so doing, it boosted the wealth of the nation, and set it on course for economic growth that lasted, with few interruptions, for 70 years.
Not only did it benefit Britain, but it also encouraged the benefits of free trade around the world. It established a British world system of finance and insurance, and a gold standard that provided a voluntary framework for international trade and finance, which also, incidentally, prevented the trade imbalances plaguing global finance today.
The stability of this system sustained an extended period of globalisation. Along with the advantages Britain enjoyed, based on world-class education, the rule of law and the common law system, property rights and the English language, it led to an unprecedented growth in prosperity.
It is these values and frameworks that saw the establishment of Singapore as a great trading centre, and the tremendous growth of Hong Kong after the second world war as one of Asia’s great financial and trading centres.
As a member of London’s Reform Club, I see on the walls each week portraits of Richard Cobden and John Bright, the great Whiggish reformers who successfully campaigned for free markets and free trade, and it reminds me that all of those advantages which built Britain’s prosperity are still present in our nation today.
It also reminds me that we are going through a new period of great reform known as Brexit, a process which will unleash the power of those advantages as we once again are able to control our own trade policy, embrace free markets and look across the globe, not least to the fast-growing economies of Asia. It is a reform in which I have been a leading campaigner, among many.
The European Union, born out of a destroyed Europe and an undeveloped globe, has served its purpose and now weighs as a drag anchor on Britain, which has all the potential to be a high-growth, hi-tech nation, set free from the shackles of the EU regulatory burden. It will be a nation once again able to cut tariffs, strike trade deals and invest in Britain the money we previously gave to prop up the fat cats of the European Commission and Parliament.
London is the world’s premier financial centre, upon which Europe relies. It has deep capital markets and a great concentration of expertise. It is rivalled only by New York. By contrast, the over-regulated Paris and very boring Frankfurt will never rival London.
To read John Longworth’s piece for the South China Morning Post in full, click here.