George Osborne, The Wall Street Journal, 10.07.2016
FOR THE FIRST TIME IN 40 YEARS, THE U.K. WILL SET ITS OWN TRADE TERMS
Britain has made its decision to leave the European Union. It wasn’t one I recommended or campaigned for in last month’s referendum, nor do I resile from the concerns I raised. But there is no point looking back in anger; in great democracies like ours, when the people speak we respect their verdict, and we must take it as an instruction to deliver.
The question now is not what Britain is leaving; it is what Britain will become. There are those who want our exit from the EU to signal that we should now turn our back on the world, resist the free-market forces of globalization and become a more insular, less tolerant place. Similar forces are at work in other Western nations. We must not be afraid to confront them head-on. I am determined that—on the contrary—we now set out to build a more outward-looking, global-facing Britain, with stronger links with its friends and allies around the world. That must start with a closer economic relationship with North America.
That is the message I bring to the leaders of finance in New York on Monday; and it is why I am leading a trade mission to Asia later this month.
In the past six years, by cutting spending and reducing taxes, we have given the U.K. one of the strongest of the advanced economies. Now we intend to offer even more competitive taxes, and to become a home to more, not less, international business. To signal our intent, we will cut our corporate tax rate still further. It was already set to reach 17% from the 28% rate I inherited six years ago; now I want it to fall to 15% and preferably lower. What stronger message could we send that Britain is open to business?
One lesson of the referendum is that too many of our citizens feel economic progress is no longer benefiting them. Ever-higher welfare to make good lost incomes is not the answer; attracting private investment and good jobs beyond our major cities is. By managing day-to-day spending, we should commit to major investments in national infrastructure, including new roads, high-speed railways and digital networks.
Post-referendum Britain can secure early wins by signing an investment deal on new civil nuclear power and going ahead with new airport-runway capacity in London. We must redouble our efforts to connect up the north and midlands—regions that largely voted to leave the EU—by building a Northern Powerhouse based on local decision-making, world-class research and infrastructure.
There will be no immediate changes to our relationship with the EU, or the way our goods can move or the way our services can be sold. Britain won’t be rushed; we will take our time to determine the trading arrangements with our European allies outside their political union. I want to see the best possible terms of trade in goods and services, including financial services.
But having been the voice for free trade inside the EU, we now intend to be its voice across the world. For first time in 40 years, the U.K. will be setting its own trade terms. So we should begin the conversation now with the U.S., and with the members of the North American Free Trade Agreement, about how we can deliver even closer economic ties.
I have spoken to House Speaker Paul Ryan several times in the past two weeks about a stronger trading relationship—and this week I will welcome Treasury Secretary Jack Lew to London to see what more we can do together.
It is now in the overwhelming interest of both countries to do so. We are each other’s largest investors, with almost $1 trillion invested in each other’s economies. U.S. investment in the U.K. is around 10 times U.S. investment in China; British investment in the U.S. is around 50 times Chinese investment in the U.S.
We are each other’s largest foreign job creators. Over one million people in the U.S. work for British companies; over a million people in the U.K. work for American firms. The U.K. is a leading financial center serving not just the continent of Europe, but the entire world. We have been following a clear plan to make ourselves a global hub for the renminbi, rupee, Islamic finance, green finance and Fintech business.As I will tell Wall Street, we want more finance in London, not less.
If anyone doubted that Britain still had the appetite to play a leading role on the world stage, they should look at our decision this weekend to station our troops in Eastern Europe. They should look too to the vote we will soon hold in Parliament to renew our independent nuclear deterrent—alongside a new generation of aircraft carriers, fast jets and offensive cyber capabilities.
We will shoulder our responsibilities as a partner in NATO, a permanent member of the United Nations Security Council, and a leading power in the G-7, G-20 and the Commonwealth. Britain will be only major nation that spends both 2% of its national income on defense and 0.7% on international development—a commitment to the hard and soft power we need to protect and advance our values in the world.
So the pillars of our special relationship with the U.S. will be maintained, and strengthened. Our economic trade ties with North America must now become stronger. My message is simple: Britain may be leaving the EU, but we are not withdrawing from the world. Britain will be a beacon for free trade, democracy and security, more open to that world than ever.
Mr. Osborne is Britain’s chancellor of the exchequer.