As the Brexit fallout continues, the rhetoric coming from the business community is now moving from shock to acceptance of the need for a clear plan. Business Secretary Sajid Javid is first off the blocks this morning, laying out a checklist of five key priorities for the UK post-Brexit.
His five points are as follows:
- Immediate action: “We need to act quickly to deal with some of the biggest questions raised by the referendum result. Without delay, we must guarantee that all EU migrant workers who were here on June 23 will have the right to remain in the UK. Nor should we leave employers in any doubt about the rights of their workers.” Javid also spelled out the need to guarantee all EU economic grants already awarded to UK firms and regions until 2020. “We also need to start work right away on replacing the trade deals the EU has with other countries, and negotiating new ones of our own.” Javid confirmed he would be visiting some of the UK’s key non-EU trading partners, including the US, China and Japan in the coming weeks.
- “Whoever is chancellor should bring forward the Autumn Statement to October and use it to focus on supply-side reforms. We should commit to reducing the headline rate of corporation tax from 20 per cent to 15 per cent, the lowest of any major economy.
- Javid says the low cost of borrowing should be seized on to “Create a Growing Britain Fund worth up to £100 billion to fund business-friendly infrastructure programmes alongside the private sector. The business secretary says the government should not shy away from bold reforms and decisions that would unleash the billions of pounds sitting on company balance sheets and in private pension funds. “Much of it is ready to invest in housing, commercial property, roads, aviation and power – if only government would act. For example, we should quickly give the green light to a third runway at Heathrow.
- Tackle regulation: Following a call for a moratorium on new business rules, Javid goes on to say that “Excessive red tape was one of the biggest headaches created by our EU membership, so this is a chance to do things better. We could cut £10 billion of domestic regulation before 2020; now we should start identifying unnecessary EU red tape that can be shredded.”
- The easy bit: Negotiate a suitable exit package from the EU.
‘Vital that infrastructure investments continue’
Javid’s words will go some way to satisfy the growing calls from business bodies for a clear plan. Yesterday, five of the biggest trade bodies, the BCC, CBI, FSB, IOD and EEF called for an end to the uncertainty facing EU nationals living and working in the UK, before echoing the call for investment in infrastructure.
“Last week’s delay to a decision on airport expansion must not set the tone for other critical housing road, rail, energy and digital schemes, whether regional or national in scope. It is vital that these investments continue, given their outsized impact on jobs, regional growth, and prosperity.”
The need for commitments on infrastructure investment will also form the centrepiece of a speech by CBI President Paul Drechsler tomorrow. ““If we believed infrastructure decisions were important two weeks ago, now after Brexit, they are even more important,” he will tell an audience of business leaders in London.
‘The show must go on’
“We need a government that gets on with making the big decisions at home. That means keeping existing infrastructure decisions on track. From housing, to devolution plans through Local Enterprise Partnerships.
“The show must go on – with no missed deadlines.”
Dreschler will also warn that unless a clear plan for airport expansion and other infrastructure improvements is delivered soon, “The UK could lose out on over £30 billion in trade by 2030 with the BRIC (Brazil, Russia, India and China) economies alone.
“Meanwhile, our loss would be our European rivals’ gain. Of the £30 billion of trade with BRICs we’d miss out on by 2030, £15 billion would go to Germany, and £7.5 billion would go to France.”