Britain’s post-Brexit future is bright

Last autumn I wrote for this magazine that as we enter Brexit negotiations, we do so from a position of strength. Now, after the European Union (Notification of Withdrawal) Bill has received Royal Assent and the prime minister has invoked Article 50, the two-year long countdown to leaving the EU begins; the arguments in my last article still hold true.

In 2016, the UK economy grew by 1.8 per cent; growing faster than countries such as Japan and the United States. The UK has continued to experience a period of robust economic growth, record levels of employment and a falling deficit.

This is expected to continue as the Office for Budget Responsibility now forecasts GDP growth of 2.0 per cent in 2017. PricewaterhouseCoopers predicts that over the next three decades, UK economic growth will outpace growth in France and Germany and double the pace of growth in Italy. PwC went on to say in the same report that if we forge new trade ties with faster-growing emerging economies we can cement our status as one of the engines of global growth.

Most economic forecasters suggest that the global economy will continue to grow at a steady pace and the IMF predicts that Indonesia, Brazil, India and Mexico will climb the projected GDP rankings. The so-called E7 group (short for “Emerging 7”) includes these countries and the IMF estimates that, as a group, they could be double the size of the G7 by 2040. We will soon be best placed to sign bilateral free trade agreements with each of these fast-growing nations.

The share of UK exports to the EU will continue to decline. In 1999, 61 per cent of UK trade was with the EU, now it is 43 per cent. By 2025, it has been projected that exports to the EU will account for under 35 per cent of UK trade. The European Union's internal market is important to us and we want to continue with reciprocal free trade with our friends and allies on the continent. Independent countries can and do trade successfully with Europe, without having to be a member of their internal market.

Barclays released their report UK trade outlook 2016-2026 last summer, which predicted that services are set to account for half of UK exports from 2026, up from 38 per cent in 2006 and 44 per cent last year. This will put the UK in contention as the global leader for service exports. By 2026 the total value of UK goods and services exports is predicted to increase from an estimated £536bn in 2016 to £880bn in 2026.

Last month, Toyota announced that it will be spending £240m upgrading its Burnaston plant near Derby. Jaguar Land Rover and Nissan have made similar announcements.

Such a position of economic strength gives us an advantage in the upcoming Brexit negotiations. We now have a crucial task in persuading EU member states, particularly in a year with key elections in France and Germany, that they have a massive mutual, selfish and strategic interest in continuing reciprocal free trade with us. In January, I spoke in Berlin at the Tönissteiner Kreis, an institution representing the German political, business and academic establishment. I explained that we have a huge deficit with Germany who sell more cars to us than any other country. This amounts to a fifth of all cars produced in Germany and the companies involved employ a million people. BMW based in Bavaria also has huge investments in the Mini operation in the UK.

It is important over the coming months that the democratically elected governments of the member states, with whom we trade successfully, exert their influence over the Commission negotiators, who may well have a different political objective giving priority to the European project. Senior figures in Bavaria have already warned that they do not want a recession created by cack-handed negotiations by Brussels.

The prime minister has her democratic mandate and we have a robust economy that buys more from the EU than we sell to them. We want an amicable, constructive and mutually beneficial deal with our European neighbours.

As we enter this negotiation period our optimal strategy is reciprocal free trade with the 27 members of the EU. With a robust, diverse and growing economy, we will continue to buy from and sell to our neighbours on the continent. We are a prosperous nation with a great future ahead of us. Once we leave the Customs Union, its Common External Tariff and embrace free trade, we can then begin making bilateral free trade agreements with fast-growing nations around the world.