The pound has already weakened dramatically (from $2 to $1.28 at the turn of the decade) making our exports more attractive - which is good - but we are already finding it harder to borrow money on world markets - which is not. The things we import are also more expensive. That's good because it makes home produced alternatives better value, but bad because many of those home produced items contain imported parts - so those British goods will start to cost more. And a lot of people's jobs are based on selling and supporting imported goods.
The biggest problem we face is uncertainty, so negotiations with the EU and the rest of the world need to be concluded very quickly (they won't be. They will take many years). The conversation with the EU (by far our largest market) will go something like this:
Us: "We are leaving the EU. Here are our proposals for what we'd like to keep."
EU: "Fuck off."
Which means we need to ignore the EU and wait for them to come to us with proposals - assuming they want to continue to sell us stuff (we will become their largest local customer). In the meantime we need to decide how we are going to lay out our stall to limit the damage and hopefully discover corners of opportunity that enable the UK to adjust its brand to what the world needs.
We should immediately declare our borders defined by the WTO. This is the global default for all countries, so at least we will all know what worst case trading with the UK will mean. The average WTO tariff is around 5%. With a continued low pound, this might not make exporting any harder than it is today - except we may temporarily be excluded from EU tenders for emotional reasons - until our clients realise our products are still worth buying. We will also keep foreigners out, unless we want them in (tourists, students, nurses and doctors). So there is unlikely to be a backlash from the 'take control' brigade that there are too many Poles nicking our jobs.
There is also a humanitarian aspect about managing our borders - which nobody on either side of the vote mentioned. And that is to welcome many more refugees originating from outside the EU. If desperate people who really do need a safe haven can't be welcomed with open arms and supported by relatively wealthy British people (please watch the recent BBC2 3-part documentary called Exodus - and if you don't weep, you're not human!), then I'm living in the wrong country. We must not become the xenophobic nation our Brexit vote implies we are. Let's demonstrate to the world that the UK has a bigger heart than anyone else. If we're not going to open our doors to well fed Europeans, let's open them to starving helpless people who have nothing. Let's be the nation of hope, not one of greed and fear. Make Brexit a statement of the good we can do. Let's become that beacon to the world that belonging to the EU might otherwise be preventing us from lighting. Make the world ashamed they're not British! BUT we need jobs for those immigrants to do. Hence once again the priority must be on somehow growing the economy despite losing all that inward investment from the world's companies no longer choosing the UK as their gateway into the world's largest market.
So from an economic point of view, what do we focus on in a fully positive 'opportunity' oriented way? How can we create more jobs rather than watch them slip away from the City, factories and farms?
I'm an entrepreneur. I've spent my life identifying opportunities and inventing ways of fulfilling them. This is hard because everyone is trying to do the same thing. But job #1 is to identify what people need to buy that you are well placed to provide.
Here is my list of my guesses as to what the world might want to buy increasingly from the UK, tariffs or not:
- Start-ups. In 2019 there were over 680,000 companies started in the UK - one of the easiest places in the world to get started. Very little red-tape, register online in 15 minutes, open a bank account, pop up a website (it's free on www.wix.com) and you're away.
- Entertainment, documentaries and news - from the people who put on the world's best ever Olympics by far, write and perform the world's favourite music - Eurovision apart - and is home to the royal family and the BBC.
- Selected tech like 5G, satellites, pharmaceuticals, fintech
- Education - over 800 years of world famous excellence.
- Tourism (safe and amazing history - and more restaurants from more nationalities than anywhere else on the planet - all in the only global language - English... there's a clue in the name where it is guaranteed to be spoken by everyone)
- Advice (eg law and finance)
- London residential property (low pound, great shops, theatres and restaurants)
- Knowledge Engineering. This is a brand new sector that I predict will grow exponentially. It's about training computers to make judgements and decisions better than humans. I helped start a company doing this in the '80s. It was premature then - not now with AI racing into our lives.
The basic question is not What can the UK offer foreign investors from outside the EU? but Who can offer what they want, better than the UK whether outside the EU or not?
Would you want to build a car factory in France just to escape a few percent of export tariff - and suffer their horrendous industrial relations problems? How about Spain? Do they have the skills and communications you need? Do your people speak Spanish? Italy is in deep trouble - in or out of the EU. The smaller EU countries all have economic difficulties and lack the infrastructure and population skills that the larger nations have. That only leaves Germany - and their economy is intrinsically tied to the Euro, which is not likely to have a happy ending.
So maybe the UK will still be regarded as the safest, most reliable, experienced, friendly, English-speaking nation who is now even more isolated from any problems relentlessly developing on mainland Europe. Nothing much has or will change here except for the faces in our government - which is strong and light on its feet. And now that our reputation is under the world's spotlight, we'll be even more eager to please than our intransigent and economically suspect neighbours - who can't adapt what they individually do, because they're constrained by their protectionist club's rules.
Maybe Britain can once again be independently and globally Great, with or without Scotland. As they say, we are where we are, and we need to make the best of it. Perhaps an increasingly dangerous world needs an independent, ever reliable oasis upon which we all can depend.
Perhaps it's not the UK that's isolated, but everyone else.