Boosting our exports is key to Mayonomics

The 1970 election was lost, some thought, on the basis of Britain’s balance of payments. Labour had been comfortably ahead in the polls, but the surprise announcement of poor trade figures upended its campaign. A deficit of just £31 million helped bring down a government. Today, Britain has a balance of payments deficit of £32 billion.

Of course, our economy has changed a lot in nearly five decades, and the balance of payments current account balance is no longer regarded as the premier index of national performance. But the deficit was only £664 million in the second quarter of 2011 and has grown enormously under David Cameron – strengthening Liam Fox’s argument that Britain has failed to exploit its trading potential. Mr Fox’s case is made in a letter seen by

The Sunday Telegraph, written to Boris Johnson, demanding a transfer of staff from the Foreign Office to his International Trade department. It is critical, said the minister appointed to expand opportunities overseas, that Britain revives its export markets.

Slowly we are starting to see the emergence of Mayonomics. It is determined, naturally, by the post-referendum circumstances. One characteristic is the desire to reassure, to confirm that things are business as normal. Hence Philip Hammond has announced that Britain will cover the cost of any lost EU subsidies to farmers, universities, infrastructure and deprived areas. This shoots yet another Remain fox – the absurd claim that Brexit would mean financial ruin for those financed by EU cash. EU cash is British cash, provided in part by our generous subsidy to Brussels. End that subsidy and the UK regains control of its money. It makes perfect sense to ensure that it continues to go to those who need it. Although these things should be under permanent review. Aid should only be spent on the basis of necessity, not political calculation.

Another facet of Mayonomics is realism. When Theresa May put a delay on the Hinkley Point project because she wanted to scrutinise the deal, she reportedly said to François Hollande: “It is my method.” That attention to detail should be turned to Britain’s poor performance in trade. The country has been promised much. As foreign secretary under the Coalition government, William Hague pledged to “inject a new commercialism into the work of our foreign office” and instructed British embassies to act as cheerleaders for trade. David Cameron flew to China to drum up business and toured the Middle East to promote British arms. Despite this, Mr Fox has informed Mr Johnson that UK exports have “remained flat”, while “the current account deficit fell to 5.4 per cent of GDP in 2015 – the poorest position since national statistics have been collected”.

Brexit gives us a chance to do better. For decades, trade negotiations have been outsourced to the EU. Now that we are leaving the EU, Britain must find its own way again and rediscover the skills of global economic diplomacy. The world is waiting. Talks over new deals have been mooted with great nations such as Australia, Canada and China. Liberated from having to move at the same speed as dozens of European countries, most of whom have far less to offer the world in terms of skills and quality of goods, we are free to conclude deals far faster than Brussels ever could. Single nations acting in their own interests often find themselves at an advantage. Tiny Switzerland and Iceland have deals with China; the outsized EU does not.

And as British influence expands, so it can make the case for economic liberalisation in emerging nations such as India. In other words, if Brexit is pursued with vision and determination, it can advance the interests of everyone involved. Ignore the doom merchants formerly known as Project Fear. The UK has an opportunity to address long-term problems that cannot be blamed on the referendum. Britain does not export enough. Too many barriers exist to making money. Let us make Britain both a beneficiary and booster of international free trade.