After the two biggest foreign policy issues of the last 80 years, Brexit and the Covid-19 Pandemic, Britain is now at an interesting crossroads in deciding how its economy should develop.
There are two significant dependencies, locked in for decades, that are now in an unprecedented flux. China is the ‘’Worlds Factory’’, dominating the global manufacturing with a 28.7 % share. Gradually cheaper shipping cost as well as the push for global trade during the final decades of the last century, has resulted in the de-industrialisation of large sways of the West with dramatic changes to the global value of labour. The second dependency is an internal one for Britain. The financial sector ‘s boom in the late 80’s, alongside the harshness of Thatcherite wider economic policies, positioned London and other financial hubs in Britain as the principal areas of economic prosperity. This destroyed any level balance of opportunities between reinvigorated metropolitan centres and older industrialised areas.
These recent developments do not show a clear picture on what route Britain should take. There is however an almost fleeting window to radically change Britain’s role in global economics. China and the US’s recent trade war during Trump’s presidency succeeded only in lowering the dependency on China across the Globe not in bringing manufacturing back to the US. This started a trend which was significantly sped up by Covid, in which many countries had decided to slowly wain off from China. This ripping of the bandage was seemingly supposed to be done in an attentive manner. However, Covid has decisively ripped that bandage off much quicker than foreseen. Many countries are looking at onshoring their manufacturing. There is also an environmental case to bring manufacturing away from China and back to local territory as it reduces the harm done when building, fuelling and maintaining large freight ships to carry the goods across the seas.
Brexit has been the more clear-cut radical change for Britain.
Clearly the Financial services have taken a hit from it, as business moved towards other hubs like Amsterdam, in order to keep within the EU, and outside of the EU to hubs like Singapore and Dubai. Many self-proclaimed radicals in Britain have declared this to be a negative of Brexit, at this time it certainly seems that way but a downturn within one sector of an economy can be harnessed to create a healthy flux, the key term being ‘can be’.
This is where the Conservative’s promise of ‘levelling up’ needs to be fulfilled. Whilst this promise has been hinted at in the past under Cameron and May, Johnson has declared this to be a more personal policy of his; one he hopes to champion to ensure another majority at the next election. Freeports offer a large array of investment opportunities as tax and custom advantages would bring investors and business in from abroad, not just to the port but to the surrounding area. Places like South Devon could greatly benefit from Plymouth being turned into a freeport. If there were consistent investment and the occasional boom in business and commerce from the free ports,
then there would perhaps be more interest in investing in the surrounding areas where customs and tax are significantly stricter.
This would address many imbalances Britain has tolerated over the years. The financial sector has been the major focus of the economy since the 90s as manufacturing declined. This pushed the narrative that labour was cheap, and those that were committing themselves to trades and roles were either foreign nationals, who ‘’were doing the jobs we don’t want to do’’ or were the left behind and feckless Brits that did not pay enough attention at school, so as to get a cosy office job in the city. Freeports and other manufacturing opportunities could see a reversal of this. Where instead of pessimistic or charitable attitudes to labour, we might develop shared pride and community ownership. This would help bridge the gap between working class Brits and working-class foreign nationals – there has never been a warm relationship while the two groups were claiming whatever diminished labour roles that were available.
Since we have left the EU and can no longer rely on China’s manufacturing base, we are now at an economic crossroads. Do we decline towards becoming the sick man of Europe once again, as we had been during the 70s where we meandered from crisis to crisis, or do we take one long stride in
to the sea, to shift our economy to a safer, more diverse space, to bring a forgotten prosperity to many left behind parts of our island and, in taking this stride out to the sea, dare to make a truly global Britain.
Ed Clowes