The New Balance?

Post-Brexit Britain needs a new political economy of trade, economics and state reform for the 'Turbulent Twenties'

As the election hurtles towards us, so it is only right that questions about Labour’s strategy for governing grow louder. And amongst the basic questions are the biggest: what is the new logic to unite trade, defence, development and diplomatic strategy abroad? How is this best mirrored by economic reform at home? And how does a transformed British state deliver on a new balance for external and domestic strategy in post-Brexit Britain?

Labour’s ‘missions’ have proved a good load-bearing structure for over a year. But come election time, the country will want a bit more of the ‘vision thing’; a story, a narrative of how things will be different rather than a list.

On the doorsteps of the West Midlands this week, every conversation seemed to turn on a single phrase; ‘everything is getting worse. We just need a change’. But, in the stillness of the polling booth, voters will want more than angst; they’ll want a sense of the direction Labour offers. They’ll want a sense of strategy - and as it happens, national strategy is always important for Labour because Labour prevails when the country senses that the times have changed and the moment has arrived for a period of national renewal.

Without doubt we are at such a moment now. The sense of decline is real; our growth is amongst the worst in the G7, living standards are flat, and the British state is beset with failure; we seem unable to build a high speed railway or evacuate effectively from war zones and the stories emerging from the Post Office scandal beggar belief.

But today’s crisis feels a little more existential than something triggered by the poor track record of a failing administration. Why? Because as Andrew Gamble astutely noted, today’s anxiety is the sort we feel when history shifts a gear and big geopolitical change triggers a debate about whether the nation has:

(a) the right capabilities to thrive and compete in the new world, which in turn provokes questions about

(b) how the state must change and adapt.

And this is why Labour must rise to the moment and set out not simply missions for government, but a strategy for governing. It’s time to answer history’s call.

The change of era - and five big questions for the ‘new balance’

I think we can probably agree that a geopolitical shift is not only well advanced, but is so far advanced that it is going to be hard to reverse. This is no longer an era of change but a change of era, bookended by the great financial crash and Russia’s second invasion of Ukraine. The Great Moderation is history and so too is the ‘hyper-world’ of the last 30 years; no more American hyper-power and no more hyper-globalisation either.

If there was one big problem holding back the sort of integration we have become so used to, things might be easier to manage. But if we inspect the omens closely we see that there is not one but five curses on the global house of commerce:

1. Political support for globalisation has simply fallen: IPSOS recently found (across 25 countries) that support for globalization and trade has fallen so far that half of respondents were unsure of its benefits and a third advocated trade barriers;

2. Such discontent fuels the politics of fragmentation and hence as the IMF reports, we hear noisier

   ‘complaints… about some jurisdictions "abusing the system" by enabling tax optimization schemes and retaining comparative advantage through questionable domestic laws and regulations (for example, non-observance of labor standards, currency manipulation, undercutting the anti-money laundering and counter- terrorist financing regulations, active recourse to industrial state subsidies).'

3. The intensification of the U.S.-China trade tensions in 2018 ‘contributed to a paralysis of multilateral trade dispute mechanisms.’

4. The COVID-19 triggered export restrictions on medical goods and foodstuffs (exports bans accounted for about 90 percent of trade restrictions).

5. The rising number of international military conflicts, has multiplied sanctions and import/ export bans especially on agricultural goods, fertilizers and energy. The Global Trade Alert database now shows a rising number of trade restrictions especially in high-tech sectors linked to national security or strategic competition and the IMF Annual Report on Exchange Arrangements and Exchange Restrictions shows restrictions motivated by national security considerations surged in 2020.

The outlines of a new world can now be divined through the mist. We have the return of what the Chinese have long called ‘the larger trend’; a world of multi-polar, geopolitical competition lit by the war in Europe, the growing friction between America and China, and defence spending which is rising rapidly - to almost $2.5 trillion - adding to the pressure on national budgets, which are already sagging under the weight of a record $313 trillion of global debt. This world, says US National Security Advisor Jake Sullivan, is a world where

‘Strategic competition has intensified and now touches almost every aspect of international politics, not just the military domain.’

But just to toughen the adjustment, the economy of this new world grows more slowly;

• Global growth is now forecast at about 1% slower than at the turn of the century

• Our collective response to events has ushered in a world of ‘slobalisation’; trade barriers introduced annually have nearly tripled since 2019 to almost 3,000 last year as nations derisk trade. The IMF now warns greater international trade restrictions could reduce global economic output by as much as 7 percent over the long term - or $7.4 trillion. That is the equivalent to the French and German economies put together. Goods trade integration remains below its 2008 peak

• Competition and sensible capital allocation decisions are now distorted by huge state subsidies for national champions, backed in the name of strategic autonomy and economic security but afforded mainly by the world’s richer states. The IMF has already clocked more than 2,500 industrial policy interventions worldwide last year of which half are in the China, the EU, and US.

So, these are very big changes. And together, they pose five very big questions for Britain’s national strategy after Brexit:

• What is the right external policy for Britain, coordinated across trade, defence, development, diplomacy and our soft power?

• How do we invest on the right national domestic strengths to capitalise on that external policy?

• How do we ensure we fairly share the prizes and better insure people against the perils, delivering better public services to help us grow our workforce, boost wages and deliver a shared growth in wealth? 

• How do we build around the answer a new sense of national identity, purpose, dare we say, a national mission?

• And how do we weld to this strategy a political constituency, with a stake in its success?

A moment of history

The shifts in the world today jeopardise the sort of open world order which Britain helped create - and in which Britain has long made its fortune.

From the first days of our modern history and the great Elizabethan era of company building, our nation’s fortunes owed much to trade and indeed our unique position as a nation engaged in long centuries of conflict, nestling at the great junction of Europe and the New World with ready access to the markets of the Baltic and Mediterranean, the flood tide of new American silver which lowered our costs of capital, and vast reservoirs of coal which lowered our costs of energy.

Nor was the British empire, as the famous phrase goes, ‘acquired in a fit of absence of mind’, rather it was acquired as sovereign force was deployed to guard the business of our argonauts, the entrepreneurial British traders who built - in places like India, China, South and Western Africa - some of the great trading firms on earth. Elsewhere, we sent not simply navies but our people in their millions to America, to Canada, Australia, New Zealand and South Africa.

Hence, from the days of David Ricardo (1817), both populace and parliament backed the ideal of Britain as the world’s great free trading champions. And with the abolition of the East India Company’s monopoly in 1833 and the Corn Laws in 1846, the mercantilists were defeated and the free traders ruled the roost. Thereafter, when political entrepreneurs like Joseph Chamberlain proposed free trade’s demise, they lost the argument. It took the Wall Street crash and the Great Depression to persuade the nation’s politicians to change the plan.

This shift owed much to the debates on national decline. Andrew Gamble flags three moments in the last century when this debate raged hardest: the debate on National Efficiency before 1914; the debate on modernisation from the 1920s through to the 1960s; and the debate on social democracy from the 1960s through to the early 90’s. At each moment, debate centred on what we might call a new balance in external and domestic statecraft with a basic divide that David Edgerton once described thus;

‘The political story of the United Kingdom can usefully be framed as a contest between two programmes or projects: the liberal, internationalist, free-trading one and the imperial-protectionist one.’

Throughout the last century, the sheer traction of the case for free trade has meant that the rival case of the more protectionist ‘tariff reformers’ only prevailed for a couple of decades and it took a long time for the protectionists to gain the upper hand, as the ‘decline’ debates in the first half of the 20th century pushed

‘Britain towards collectivist, interventionist, protectionist policy solutions, away from its liberal free-trade traditions which had governed policy for much of the 19th century, in an ultimately vain attempt to protect its empire abroad and win political support at home.’

Despite a few wartime precedents, it was not until 1931 that tariffs were introduced, together with import controls to remain in place throughout wartime and the immediate post-war years, as Attlee’s Labour sought to rebuild the post-war export economy. ‘The British nation was created’ wrote David Edgerton, ‘it emerged out of the British Empire, and out of a cosmopolitan economy, after the Second World War’. This was the moment, he argues when a distinctively country took shape, a

‘particular kind of formation’ forged ‘through economic controls at its borders…and through a self- understanding of itself as a distinct political and ideological unit with a certain internal homogeneity’;

‘Leaving behind economic liberalism meant creating not just an economic border but increasingly a culture of national self-supply. None of this was the product of a choice by the British elites, who favoured free-trading and/or imperialist projects, but they were thwarted by many brute realities….  The national moment was the time of what might be called a developmental state.’

But as a ‘national strategy’ it Didn’t. Last. Long. Indeed, some like Stanley Baldwin had characterised the retreat from free-trade merely as the tit for tit required as the world shifted in a protectionist direction; he told the Commons in June 1930 that

"I agree that high tariffs are a bar to world business, but you cannot get those tariffs reduced so long as you leave our own market a world dumping ground. I want disarmament in tariffs as much as I want disarmament in arms. But how do you get disarmament in arms? By dealing among equals!”

The retreat of free trade: key moments

1903: Chamberlain launches major campaign in favour of an imperial preferential trading - defeated by the Liberals in 1906 General Election

1915: Mckenna tariff imposed import tariffs of one third on a variety of luxury goods. Largely designed to save cargo space.

1919: Key Industries Act protects defence-related industries

1921: Safeguarding of Industries Act protects a variety of non-strategic, industries. Also passed anti-dumping legislation

1925: Restoration of gold standard, defence of which triggers soaring interest rates in response to Wall Street Crash

October 1931: Landslide election returned a new National Government

November 1931: Emergency Abnormal Importations Act

February 1932: landmark Import Duties Act marks the definitive break with a free-trade tradition stretching back to 1846. Tariffs of 10% on manufactures. Delay for Empire countries. Ottawa conference later creates imperial preferences.

And so, as Britain’s post-war growth began to lag our European neighbours, and as efforts to take down trade barriers began to accelerate - with the GATT rounds of the 1960’s - so free trade was back. There was a last ditch attempt to renew an imperial trading bloc in the 1950’s, before we finally decided, too late, to apply to join the European Community.

In a way the political framework, the poetry, for this was actually offered by Winston Churchill at the end of the 1940’s. In his speech to the 1948 Tory Party conference, Churchill framed British external policy, and our hunt for ‘gratitude and fame’ as the task of exploiting our unique position at the point where ‘three majestic circles' in international relations intersected;

‘The first circle for us is naturally the British Commonwealth and Empire, with all that that comprises. Then there is also the English-speaking world in which we, Canada, and the other British Dominions and the United States play so important a part. And finally there is United Europe

The punchline for Churchill was that Britain was the only country that ‘has a great part in every one of them’ and which is 'the very point of junction'. And, as Nick Pearce and Michael Kenny argued, Churchill

‘rounded off his powerful metaphor with a providentialist assertion of British destiny. If these circles of influence could all be joined together, said Churchill, “there is no force or combination which could overthrow them or even challenge them.’'

By the late 1950’s, the Conservatives had concluded that it was the junction with Europe that needed a rather tighter fit. Announcing the government's position to the House of Commons in 1961, Harold Macmillan sought to proverbially square the majestic circles by posing this question:

‘How can we best serve the Commonwealth? By standing aside from the movement for European unity, or by playing our full part in its development?

By retaining our influence in the New World, or by allowing it to decline by the relative shrinking of our own political and economic power compared with the massive grouping of the modern world?

Britain in isolation would be of little value to our Commonwealth partners, and I think that the Commonwealth understands it. It would, therefore, be wrong in my view to regard our Commonwealth and our European interests as conflicting. Basically, they must be complementary.’

From here, it took just a decade and a half for the Conservative’s European strategy to evolve; from a strategy to safeguard our global strength to a strategy to transform our domestic strength. With the arrival of Mrs Thatcher, the Conservative Party began to champion the creation of a free trading continent, not as a way to preserve some lost imperial glory, but as a way (as Gamble puts it);

“to embed free-market principles as an external framework that would prevent backsliding in the UK…another tool to force British companies to become more competitive’.

With the defeat of the Bennite alternative economic strategy in the early 1980’s, Labour joined the European embrace, albeit for very different reasons; first, as a way to welcome Jacques Delors’ ‘social Europe’ and the new rights it might enlarge, and then under new Labour, as a battering ram to force open the gates of a global marketplace built in the new glades of post-Communism. Indeed, Blair, like Clinton, came to characterise globalisation as inevitable, and debating its virtues as useful as a debate about whether winter followed autumn.

Yet, there were choices about the particular model of ‘hyperglobalisation’ that we choose, as Dani Rodrik nicely put it;

“We chose to globalize the economic rights of corporations and financial institutions, but not labor rights…

“These choices led to a model of globalization that went too far in the direction of furthering the interests and rights of powerful economic actors—international banks, international corporations, and highly skilled professionals—and failed to adequately address the concerns of those who would be left behind—primarily the lower and middle classes, less-skilled workers, and many low-income countries—as well as concerns about the environment and global public health.

Rivalry, risk and redistribution

In retrospect, as we look back on the precarious hopes of this period, it is now clear that there were three risks that we did not manage as well as the moment required; rivalry, risk, and redistribution. Perhaps, the turn of policy under President Xi’s China rendered today’s world inevitable. But I think our failure to manage these matters well - across the West - has contributed significantly to falling political support for globalisation.

1. Rivalry. Integrating a non-market economy like China created a dangerously unlevel playing field. It was not fair competition; in fact we permitted an rivalry that was unfair.  As Jake Sullivan recently put it:

‘The People’s Republic of China continued to subsidize at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies’ with the result that western competitiveness was hollowed out.

• The irony was, as Dani Rodrik pointed out, China itself may have embraced free trade - but not laissez faire;

“In fact, Chinese policymakers put in place extensive industrial policies, provided subsidies to infant industries, managed the exchange rate, imposed controls on cross-border capital flows, and infringed on intellectual property rights—all violations of the rules of the WTO and financial globalization, in spirit if not always exactly in letter.

“So the deep irony is that China did so well in the hyperglobalization era by pursuing a set of policies that put its national developmental priorities first and manipulated the rules of the world economy to its advantage, essentially free-riding on the openness of other countries’.

2. Risk. Second, where nations like Britain had comparative advantages in sectors like finance there was the risk that domestic banks could take planetary-sized risks that the local taxpayers had to insure when things went wrong. The global financial crisis cost the nation a fortune. Now, other risks loom large: the risk of ‘weaponised interdependence’ of trade links with both Russia and China, that might limit our agency and options in times of military crises.

3. Redistribution. Bluntly, the price and the prize of globalisation were not fairly shared. Some did very well. But millions more enjoyed gains that were nowhere near as great. We paid too little regard to the fact that while trade theory points to the prize of growth that free trade can bring, it says little about the perils that face the losers. The IMF itself recently put the point in terms:

‘Global gains from trade have…often been distributed unequally among people and across borders. In many cases, the share of labor in Advanced Economies' national income has fallen as the gains from trade have accrued disproportionately to capital and skilled workers.’

• This has been the story of Britain’s recent globalisation experience. For much of our long history of the industrial revolution and empire building, labour’s share of national income soared from a little under 60% in the 1760’s to a little under 80% on the eve of World War I. From the mid 1950’s, however, labour’s share of national earnings began a long fall - and when it recovered around the turn of the 20th century, the turn was accompanied by sharply rising inequality, reflecting the reality that the the hopes and rewards of workers were dividing into those who did well and those who did not.    

• The latest Economic Report to the US President (CEA, 2024) spent some time unpacking the economics of this. The President’s councillors make the point rather eloquently that while the classical Ricardian trade model proves that comparative advantage can allow all countries to access goods produced by the most efficient and lowest-cost producers and so increase their aggregate consumption, there are a few assumptions that do not hold in the real world. When workers lose jobs in sectors that are traded, they don’t move seamlessly from ‘sunset industries’ to new industries. Nor do mere monetary costs capture everything consumers care about: like good environmental and labor standards. What is more trade can increase inequality because;

‘Aggregate welfare gains arise from comparative advantage, specialization, and trade across countries based on advantaged goods and services.

[But] In any given country, increased specialization leads to a relative increase in labor demand and wages for workers in advantaged sectors over those in less-advantaged sectors…gains [do] not imply that everyone will benefit from these gains equally- some workers will explicitly lose.

So: as Britain dispensed with the national strategy that enabled us to rebuild after world war 2, and embraced the new globalisation of the 20th century’s fin de siecle, we were left with an imbalance: between those who reaped the prizes and those who paid the price of globalisation.

This was an inequality sharpened by a trade policy that was not strong enough to level the playing field with China (seduced as we were by the allure of market access), with a domestic policy that was too weak to insure against the perils or to share the prizes that our external strategy did create.

Meanwhile, the pervasive effect of decades of easy money was handing those who held assets a huge windfall in the rising value of the assets they held as prices rose, moving beyond reach of the low paid the opportunity of owning a home or building a nest egg for retirement.  A stake in society was becoming too expensive for millions to afford.

Brexit

Brexit was fought out in the hot and messy ash of these failures. Indeed, Brexit was offered as a remedy for many of the problems hyper-globalisation created. It was an extreme example of this global trend. But it was also a paradox.

The pious fraud we were invited to believe was that a new sovereignty over external policy would free us from the shackles of Europe, and inspirited by a new buccaneering energy, we would quickly deliver a better set of free trade deals, delivering a bountious harvest so large that we could both cut taxes and level up the nation.

Well, now we know the sanction of our decision: barely any new trade deals, a falling goods trade, and a failing record of Foreign Direct Investment. No lower taxes. And no levelling up. Indeed, six years after  Brexit, public spending on economic affairs was still much higher in London and the South East than it was anywhere else.

From the outset, the Conservative Party was united about the importance of boasting trade-based growth. Thérèse May argued that inside Europe, trade had stagnated as a share of Britain’s economy.

“Since joining the EU, trade as a percentage of GDP has broadly stagnated in the UK. That is why it is time for Britain to get out into the world and rediscover its role as a great, global, trading nation’ she argued, before declaring “it is clear that the UK needs to increase significantly its trade with the fastest growing export markets in the world.”

Boris Johnson made much the same point with a slippery trick of eloquence;

“It is absurd that Britain – historically a great free-trading nation – has been unable for 42 years to do a free trade deal with Australia, New Zealand, China, India and America” before going on to argue that “It is only by taking back control of our regulatory framework and our tariff schedules that we can do these deals, and exploit the changes in the world economy.”

But the Tories differed drastically on the national strategy to do this.

On the one hand, Thérèse May created a well regarded industrial strategy to support British business, incorporated the acquis into British law, spoke of building up workers rights - even putting workers on boards - and promised an extra £2 billion a year “to help put post-Brexit Britain at the cutting edge of science and tech.” On tax, there was more traditional Tory fare and a pledge to deliver the lowest corporate tax rate in the G20.

On the other hand, Liz Truss abolished May’s Industrial Policy Council, proposed tax cuts that spooked the bond market while Jacob Rees Mogg proposed a bonfire of European regulation that spooked the business community.

The truth was the national debt was simply too high for unfunded tax-cutting (the kindness of strangers has limits), while the allure of ‘slashing red tape’ had limited appeal to global companies who needed standardisation for that strategic slice - about a sixth of exports - we deliver into global value chains. And smaller firms, selling next door into our largest export market, need the same rules not different rules as our continental neighbour.

The Brexit promise was always a stretch. But it was also a victim of timing. Once upon a time, a deal with China was waved around as a Brexit benefit (along with the United States), mooted by both Thérèse May and Boris Johnson. By the time Rishi Sunak had moved into Downing Street, changes in China and the influence of the China hawks were such that the PM could not even say whether or not we would block China’s accession to CPTPP. Even for Conservatives, a tradition of laissez faire was trumped by “commerce sécurisé”.

Bottom line? After five years, it was pretty clear that the Tories had over promised and under-delivered on Brexit.

• Despite a rebound in the services trade, we now suffer the worst trade intensity in the G7.

• Good exports to the EU have suffered. Indeed, if they had continued to rise at the sort of trend rates enjoyed before Brexit we could have looked forward to EU exports that were anywhere between £1.8 billion per year to £9.1 billion higher than today.

• That’s an order of magnitude more than the gains of recent new Free Trade Agreements; looking across recent impact assessments for recent agreements, increases in UK exports due to FTAs total £784 million per year (the Japanese FTA is estimated to increase exports by £173 million; Australia by £413 million per year; New Zealand by £46 million and CPTPP by £152 million per year).

• While Britain has traditionally boasted a good track record in securing Foreign Direct Investment, inbound FDI has declined on average by £13 billion per year from 2017 to year-end 2021.

Towards a national strategy for a fracturing world

So: what do we learn from this complicated story? Here are five conclusions about the new balance that is needed that I offer for debate in the months ahead:

1. Labour will need, not only a new external strategy, but a new story to go with it.

• For a country built on free trade, both its myths and realities, and a nation that by and large is more comfortable in the world than most, trade strategy is an anchor for national strategy. So, ‘Securonomics’, as it develops, should not seek to shut Britain off to the world, or author a new protectionism. That would be a great power delusion that would create on our shores, frankly, a theatre of suffering. Rather we must safeguard and grow - not slow - our trade. But to inspire confidence in the story of openness to the world, Labour must learn the lessons of New Labour’s failure to craft an account of what our external policy is doing in and for the world - and for us here at home. We must learn a few lessons from the resonance of the ‘Anglosphere’ messages that the Brexiteers crafted with such guile. People like the idea of ‘imperishable glory’ even if there’s a sense that might not be what it was.

• Over the course of a century, hopes of an Anglosphere foreign policy never really delivered on trade deals (as Nick Pearce and Michael Kenny conclude) but the Anglosphere has for many years supplied a seductive story because ultimately trade is built on trust and few assets foster trust better than a shared language. As Pearce and Kenny put it, there was for a long time a ‘prevailing weakness in Labour circles of a story about national purpose and identity in the UK, and a disinclination to take a clear stand on the European question’. We should not repeat that, especially when we know Conservatives - from Boris Johnson to Mark Harper - are so adroit at waving around ‘Churchillian points of reference’, of a ‘Great Dominion’ eternally bonded by language, culture, economics and values, along with;

‘the 'unique societal template' of the Anglosphere: shared language, the common law, the free market economy, basic freedoms and parliamentary democracy, all linked together by Churchill's "golden circle of the crown' and culturally enrobed by 'Shakespeare, Dickens, Kipling, Lewis, and Chesterton’

These images rehearse well-worn depictions of the English as an island people, a providential nation which nurtured the oak of British liberty, from which there have grown the branches of democracy, the rule of law and the free market economy, inventions that have been replanted across the English-speaking parts of the world. [Pearce & Kenny]

As it happens, there is an excellent story to put at the heart of our external strategy; it is the vision, not simply of a ‘rules-based order’ but a ‘rights-based order’, rooted in the Universal Declaration of Human Rights, localised in Churchill’s Great Charter, that became the ECHR, born of a tradition that stretched back through the Bill of Rights to the Magna Carta. Around this tradition and all that flows from it - from free speech to the scientific method to parliamentary democracy, it is possible to far better orchestrate the tools of our soft power more imaginatively; the British Council and learning English, higher education and Chevening Scholarships, the BBC World Service, the Westminster Foundation for Democracy and military to military exchanges.

2. From free trade to trusted trade. The experience of the last five years shows all encompassing free trade agreements are hard; therefore in the future, trade diplomacy may be a more powerful motor for progress; delivering on grand bargains, like the New Atlantic Charter or the Hiroshima Accord, and driving through our advantages in cutting edge sectors where we have strength and something to offer, like offshore wind, financial services, defence, and creative industries. In a world of limited resources acting through multi-lateral alliances, where we can credibly act as the ‘keystone’ is the best way to maximise our influence and leverage the huge global equity we have all over the world.

• Where are the priorities for this trade diplomacy? The return of geopolitical competition and new risks to the Atlantic alliance means we are now operating, not in ‘three majestic circles’ as Churchill once put it but at least five; the English-speaking world united in the Five Eyes Alliance; our neighbourhood which is Europe; ‘a free and open Indo-Pacific’; the Commonwealth, especially in Africa which is home to a third of the world’s young people (aged 15-24); and the Gulf which is home to 40% of the world’s $5.5 trillion in sovereign wealth funds.

• In each of these circles we have equity, history, soft power and crucially, powerful defence and development alliances: think Five Eyes, NATO, the Joint Expeditionary Force, the Five Power Defence Alliance, AUKUS, Tempest and a host of military to military support across the Middle East from Operation Shader to the UK Joint Logistics Support Base in Oman. Around these core alliances, it should be possible to build out the five sinews of economic security of (i) derisking supply chains, (ii) critical minerals, (iii) policing sea lanes, and to a degree coordinating (iv) inbound and (v) outbound investment security

  

3. Maximising trade will require us maximising trust. And rebuilding development partnerships is one big way to do this.

• I have written about this elsewhere, but given the ‘seven giants’ that now stand in the way of achieving the sustainable development goals and the Paris climate agreement - poverty, hunger, disease, lost learning, conflict, debt and climate change - we urgently need to contribute more to transforming the strength of the global financial safety net, and the size and scale of the Bretton Woods institutions that we did so much to create in 1944.

• Acting multi-laterally to transform the strength of the IMF and the World Bank, is a huge force multiplier for any investments and leadership that we could provide - and crucially helps ensure that China does not become the lender of last resort to developing nations.

4. A new approach to labour/ environmental standards - and Europe - is key to managing trade risks. We have to learn the lessons of how we failed to sufficiently insure against the risks of trade in the past.

• We have to remember that integration can hurt some groups of workers and communities more when facing rising import competition. That means a much tougher approach to:

  • (a) anti-subsidy investigations (much like the EU is now taking in fact,

  • (b) tougher policies on use of forced labour in supply chains, and

  • (c) a serious effort to make sure we’re not just exporting carbon emissions - but charging a proper carbon price on carbon heavy imports, and moving towards creating a carbon border adjustment mechanism.

• The new demands of economic security and the necessity of derisking supply chains demands far closer coordination and integration with Europe. Given our comparative advantage in services, we may simply want to accept dynamic alignment of regulation - or measures to prevent dealignment - at least on Sanitary and Phytosanitary (SPS) agreement between the UK and the EU.

• It has been over 3 years since the end of the transition period now and in practice, there has been very little divergence. Yet we’re busy implementing hugely expense full controls for goods going from the UK to the EU

• We may have the freedom to make regulatory changes under the current arrangements - but we aren't really exercising them but are still facing the same costs as if we had.

• We would need to go back to those countries with which we have signed FTA’s, explaining new arrangement - but the compensation could be additional access or tariff reduction. The countries with which we have signed FTAs all trade with the EU and are unlikely to have set up separate production lines for the UK - so they are probably meeting EU standards anyway.

5. Industrial policy where it matters. To trade well with trusted friends, we need something to sell - and right now, we are being out invested; therefore it will be imperative to back those sectors in trusted trade markets where we have a clear comparative advantage with an organised industrial policy. We cannot win a subsidy race - but there is smart, stable long term policy framework to be had, embracing planning reform, grid and energy access, innovation, research and development investment, skills and crucially, agility and speed in assembling public-private partnerships across local and central government.

Last, but not least, alongside the strategy for external trade and domestic growth, has got to come a new approach to how we actually share the gains of growth. We cannot and must not embark on a strategy that simply accelerates returns to capital, and to high skilled, high paid workers without actually ensuring that redistribution mechanisms are in place to genuinely level up public funding across the country, rebuild public services, finish the work of Beveridge by building out both child-care and social care, and of course deliver some big solutions to the inequality of wealth. But that of course, is a subject for an entire book….;)