Only a Thatcherite model of deregulation can save Brexit now. The Tories shouldn’t be afraid to admit that

Even if you hate Brexit, you deserve to be told the only way it could possibly work

Sean O'Grady
Tuesday 20 February 2018 15:40
comments
David Davis delivered yet another Brexit speech in Vienna
David Davis delivered yet another Brexit speech in Vienna

Although David Davis doesn’t use the big words Boris Johnson loves, his contribution to the “vision” for Brexit was (a bit) more substantial. However, for a man who enjoys a reputation as a “Brexit Bulldog”, Davis set out the wrong kind of detail, and indeed his was a vision of the wrong kind of Brexit.

Britain will not, Davis assures us, be “plunged into a Mad Max-style world borrowed from dystopian fiction”. There will be no scramble to lead a “race to the bottom”, but instead a “global race to the top” in rights and standards.

How does that work, then?

What about all that stuff in the referendum campaign about Brussels bureaucracy holding Britain back? Are we just going to replace Brussels rules with “equivalent” UK rules? Or even more onerous ones?

If we are, then what is the point of Brexit?

I long for someone, even Jacob Rees-Mogg, to be honest, to tell the British people that the only way of making Brexit work is to build a world-class competitive economy. This is sometimes called the “Singapore-on-Thames” model, or Thatcher’s Fourth Term – a programme of deregulation, liberalisation, competition, loosening worker rights, free trade, migration and privatisation on a scale that has not been yet contemplated, never mind shouted about.

The Brexiteers – overwhelmingly Thatcherites – know this, but don’t say it for fear of splitting their party and alienating the country. Well, they need to come clean. Even if you hate Brexit, you deserve to be told the only way it could possibly work. So this is what a Brexit Vision speech should say…

“First, Britain’s flexible labour market is the single most precious economic asset the nation possesses, and it needs to be reinvigorated. That means ending the constant ratcheting up of the living wage and minimum wage, which jeopardise businesses such as care homes, hotels and fast-food joints. It also means – as the Pimlico Plumber case highlights – that we cannot endow self-employed and casual workers with the full rights enjoyed by employees.

“The labour market will need to be further liberalised and rights weakened as we face the challenges from the dynamic eastern economies.

“It is true that we cannot beat Chinese wage rates, but that is no reason for us to keep ramping wages and labour costs ever higher and make ourselves less competitive. Ironically, that has been the European way to shred jobs and push more people into welfare dependency. Now, just as it leaves the EU, the UK cannot be toying with that social model.

David Davis tries to dispel post-Brexit chaos fears

“Second, we need to create an ultra-low tax economy to attract inward investment of every kind. We can’t expect the world to believe in Britain because we have clean air and pretty countryside. There needs to be a hard financial incentive. The message needs to go out that Britain is somewhere you can make – and keep – your money.

“Third, we cannot be fussy about our new trading partners. President Trump may not offer us unlimited access to the US market if we refuse to take their genetically modified food or chlorinated chicken. If Xi Jinping wants us to take Chinese steel so that we can turn it into British-made cars sent back to China, then we will need to adjust to that. If Modi wants more study visas in return for UK access to India’s banking and retail sectors, then that also has to be accepted.

“China, America, India and the rest of the world will not let us have our cake and eat it any more than the EU 27 will.

“Fourth – if we want to make the most of our new status we could move to unilateral free trade – and buy anything we choose tariff- and quota-free on world markets. That means prices in the shops will fall for some items, and living standards will be protected that way, with more money for households to spend on other things. Brexit could be hugely beneficial to consumers.

“Fifth, we have to accept immigration, from the EU27 and the rest of the world. The economy will suffer without it. Large companies, universities, hospitals, farmers and others must be given generous visa quotas to bring in whatever talent they need. Sorry, Ukip.”

The vital message is that if we are to leave the nice warm bath of the EU – a protectionist bloc – and head out into the world then we have to accept that it is going to be a cold shower – whatever we do. If we try the “race to the top” it won’t work and will be painful. If we try the “race to the bottom” it will work, but will also be painful. Any politician who tells you otherwise is a fool or a charlatan, whichever party they’re in. The Road to Brexit will be arduous, and feel at times like a Mad Max adventure. Funny how no one’s told you that yet.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments