For people like the Labour supporting businessman John Mills, Brexit was mostly about getting the value of the pound down in order to increase exports. ‘This is Money’ reports that
His Brexit beliefs stem from his economic outlook. For Mills, Britain has thrown away its industrial manufacturing past and needs to rebuild its status as an exporting nation and to do so it must allow the value of the pound to fall sharply.
Yet it’s done that – and we haven’t even got to the Brexit door yet. But nor, in fact, have we in any significant way (ie slightly) increased exports.
Now it can be argued that there are sundry reasons for this – too many exports (most obviously cars) have lots of imported components that make up a good proportion of the finished product. Second, the world trading environment is not generally flourishing and Britain has a proportion of manufacturing industry that is distinctly on the low side as a proportion of GDP and not nearly so diverse as would be beneficial – as would be the case if Britain were more like Germany, for example. A large part of this problem is that the large UK banks don’t at all appreciate small UK companies. Their profits lie, of course. elsewhere.
So I suggest that Mills, not in his first flush of youth, is not quite with it – or the future.
But if we have really to Brexit then there is the basic of an idea that I’ve expanded on that would bear down on Britain’s balance of payments deficit, which is of great importance especially when Britain is well known (as I’ve peviously indicated) as a net importer, to the tune of about half of its requirement, of its food.
Yet what if we encouraged exports by saying we would give one export point for every £100 pounds (to encourage small companies) exported and that importers had to buy these to the same equivalence in order to import. These would be tradeable and so if I exported a widget I’d be able, other things being equal, to import another widget to the same value.
This would, of course, overtly increase import costs and reduce export costs.
I rather think food would have to be exempt – otherwise we might inflict rising food prices on absolutely eveyone in even more ways than Brexit is already causing…
But it would surely concentrate the minds of manufacturing industry – at least such of it that is left (oh dear) after Brexit?