As debate intensifies about life after Brexit, one thing has become clear. Regardless of how you view the outcome of the referendum – and I was a firm Remainer – our country needs to improve its trading performance.
As Secretary of State for what was then the Department for Trade and Industry between 2001 and 2005, I know how vital global trade is to UK jobs, businesses and prosperity.
With the public’s decision to leave the EU, the UK will need to set its own independent trade policy and be able to direct its trade relations in a way that hasn’t been possible for over forty years.
That has put the issue of trade firmly in the national spotlight, giving us all the chance to discuss what trading relationships we want as a country and how we can make sure that trade benefits consumers and businesses across the UK.
It’s a discussion I often had as Chair of the UK India Business Council for the last eight years, looking at how we could strengthen the connections between our companies to boost growth and living standards in both countries.
When it works well, trade can create prosperity and jobs and raise people’s living standards.
From the small UK traders selling their specialist products overseas, to the global products in our homes, trade affects us all.
Trade means choice: a wider range of food on our supermarket shelves, clothes in our stores, cars on the forecourts. It means more competition, yes, but that competition drives down prices, improves living standards and makes businesses more innovative and productive.
Take India for example, a country I know well. In 1993, around 45% of India’s population lived in appalling poverty, below the World Bank’s poverty line. In 2011 it was 22%. It’s no coincidence that in the meantime, India opened up its economy to global trade and investment. And the benefits have been mutual. Under Tata’s ownership, Jaguar Land Rover has become a massive exporter, with 5,000 new UK jobs announced last year alone.
Trade also means prosperity and stability. It might not be obvious to us, but when companies trade more, they employ more people and pay higher dividends (vital for pensions). When countries build stronger trade links they create wider relationships which underpin global security and peace.
Free and fair trade has been the greatest liberator of the world’s poor, harnessing economic links to spread prosperity and lift hundreds of millions of people from poverty. The UK was a leading voice for that cause when I served in Government and I hope that will continue long into the future.
That’s why, last year, I was delighted to join the Board of Trade when International Trade Secretary Liam Fox re-convened it in October – after a gap of 200 years. Indeed, I wish I’d thought of doing so myself!
The aim of the Board is to help boost exports, attract inward investment and ensure the benefits of trade are spread equally across the country. That’s why it meets in locations across the UK, welcoming local businesses to discuss how trade can help them, their employees and communities.
Too many communities feel that they have been left behind, that the benefits of globalisation haven’t reached them. It’s our job to make sure they do.
In the last year, the UK secured more foreign direct investment than ever before while exports have risen by over 13%. The world certainly hasn’t turned away from the UK, nor should we turn away from the rest of the world.
Growing trade and foreign investment has created jobs across the UK, over 8,000 in the Midlands in the last year for example. But we must continue to ensure that the benefits of trade and investment are filtering down to all of our communities.
Last year the Government introduced legislation to prepare the UK for taking over its own trade policy. Next week that legislation gets its Second Reading when MPs will debate it in Parliament.
I know colleagues from all the political parties will take this opportunity to give their views, and the unique perspectives of MPs representing constituencies across the UK will help ensure that future trade policy is indeed working for the whole country.
But what businesses, consumers and investors need is certainty. Setting out what the Government wants for the UK’s post-Brexit trading future will provide that. Trade should be a force for good, something which has created jobs and prosperity across the UK and the world. Whatever your feelings about Brexit itself, let’s make sure that we build a trading future that spreads prosperity to all.
Rt Hon Patricia Hewitt is a Former Secretary of State for Trade and Industry and Former President of the Board of Trade