Philip Hammond has rightly warned the EU that “we will do whatever we have to do”. So, in addition to pursuing trade agreements around the globe, what could we actually do, to convince the world that we have good enough plans for them to start buying pounds?

Here are five ideas:

1. Establish Free Ports. My very talented successor as MP for Richmond, Yorkshire, Rishi Sunak, has pointed out how Free Ports could bring a major boost to the economy, manufacturing and the north. This would allow goods to be imported, manufactured and re-exported without any duties or taxes because they would not officially enter the UK. The jobs created could run into tens of thousands, and the merchandise handled into hundreds of billions of pounds.
2. Give tax incentives to key global industries. Special tax relief for the film industry has been a huge success: major new studios have been built in Britain, over 200 films a year are being made here and we have 260,000 jobs thriving on the back of them. Every £1 of tax relief is meant to bring £12 back into the economy. We could give similar carefully targeted incentives to other creative, scientific and high-technology businesses, helping aerospace, biotechnology and others to see the UK as especially attractive.
3. Make Britain a pioneering centre of lifelong learning. Artificial intelligence could make half of all current jobs obsolete within the next 15 years. People are going to need new skills throughout their lives, and with our strong universities we could blaze the trail in providing this. It would mean creating a new culture of studying, with businesses changing the way they train employees, a vast expansion of online courses, and maybe vouchers or tax credits for individuals. We are going to have to do this anyway, so let’s lead the world before someone else does.
4. Build on the three points above by being the unashamed home of talent. This means redefining how we count migrants – sorry about this bit, Prime Minister – so that we don’t exclude brainy foreign students who want to come to our universities and pay for the privilege of doing so. By all means count them, but show them as a separate category and relax about them coming and going: many of them will develop a deep affinity for this country they will retain throughout the whole of a high-achieving life.
5. Make clear interest rates are going slowly up, not further down. This, of course, needs the cooperation and leadership of the Bank of England. I have argued before that interest rates have been at rock-bottom for too long. Now, predictably, the Bank says the biggest threats to the economy are ballooning household debt and the falling pound – both made worse by the widespread belief that our interest rates won’t go up. It’s high time to disabuse consumers and markets of that impression, before they get hooked on it any further.

Of course, there are many other things we are doing, such as improving infrastructure and lifting the incomes of low earners, which we have to keep doing. But if, on top of a strong economic performance in 2016, we showed we were ready with these kinds of additional ideas, a lot of doubting people around the world would start to bet the other way on Britain. With three years before an election, and an Opposition that can’t stick to the same thought for even 24 hours, Theresa May has the chance to follow a tough speech on Brexit with policies that could make a success of it.

David Fuller's view

Philip Hammond’s comment that “we will do whatever we have to do” was the perfect response to the EU, and from a former Remainer who previously sounded very pessimistic.    

Here are my brief responses to William Hague’s five ideas:

“Establish Free Ports.”  I had not thought of this but it makes sense to me. 

“Give tax incentives to key global industries.”  I would favour across the board tax cuts which could be revenue neutral or even positive if the UK economy grew sufficiently as a consequence.  Special tax relief did create a booming film industry in the UK and helping the scientific and high-technology businesses is certainly a very good idea since they represent the future.  However, less glamorous industries are also important for a diversified economy and why cherry pick?  We do not want to create unnecessary resentment and damage other contributing industries. 

“Make Britain a pioneering centre of lifelong learning.”  This is a very good idea, especially if it also included manual training for jobs which may not be made redundant anytime soon, such as plumbing.  Training or retraining people will greatly reduce welfare costs, increase people’s dignity, reduce crime and contribute to GDP growth.

“Build on the three points above by being the unashamed home of talent.”  Absolutely, and the government has been slow to pick up on this.  No successful economy bars talented migrants.  The UK needs to attract more of the best international brains available, especially in the fields of engineering, sciences, technology, biotechnology and medicine.  You can never have too many because these people create bigger and better industries, and develop many new companies. 

“Make clear interest rates are going slowly up, not further down.”  This is timely.  The long credit crisis recession is ending for successful economies and monetary policy normalisation should be welcomed. 

Here is a PDF of William Hague’s article.