The following article by Ranil Jayawardena MP appeared in PolitcsHome on 27th November 2017.
What does this Elizabethan age have in common with the last? It was Elizabeth I who first recognised the importance of international trade. We must do so again. And, just as in the letter she sent with the first trade envoy to the “King of China”, we will seek to increase trade with realms further afield than Europe, by “transporting outward of such things whereof we haue plenty, and in bringing in such things as we stand in need of”.
Protectionism doesn’t work. It stalls innovation, stifles enterprise and harms consumers. Not only can people be stuck in less advanced jobs, but consumers face higher prices, less disposable income and a lower quality of life. Instead, through free trade, prices go down, choice goes up and people have a greater chance to live a good life.
Let’s put this in context; our trading position is already a success. Post-referendum, over £32 billion of big trade and investment deals in the UK have been announced, while China’s Ambassador called 2017 a year for consolidating the China-UK “Golden Era”—and the manufacturing sector has reported orders are at a historic high.
We are at a crossroads now and there’s further to go. The Prime Minister has set out that we will have control over our trade policy and will be free to seek trade deals with friends around the world—in Asia, Africa, the Americas and Australia—as well as in Europe. It is by cultivating open, global markets, that seek “things whereof we have plenty”—high-end automotive, aerospace and defence products to name just three—not to mention the plethora of services available from the City of London and beyond—that we will create the good jobs of the future, improve the quality of life for ordinary working people in every corner of our kingdom and truly reap the potential that comes with being one of the world’s most developed economies—but it is crucial that we put the consumer at the centre of all we do.
Millions across the nation will have seen ITV’s excellent drama Victoria, where the Conservative Prime Minister, Sir Robert Peel, fought to repeal the Corn Laws. We must fight against steep import duties and excessive regulation today too.
Just as the Corn Laws benefitted the rich land owners, protecting them from international competition—and had little impact on wealthy individuals, who could pay any price for the food they wanted—we should seize our opportunity today to give those with the tightest purse strings a hand up.
We should arm the consumer with the right information; alongside providing products they want, at prices they can afford. We must trust consumers—people up and down the land—to make the choice that’s right for them. And we know this works. While countries used to be as protectionist over textiles as agriculture, WTO quotas were eliminated by 2005 and consumers now enjoy a greater choice of clothing than ever before. Over recent decades, UK free trade agreements (FTAs) have increased the quality of imports by 26%—while reducing the price of like-for-like imports by 19%.
This matters. The evidence shows that more choice and fewer trade barriers puts money back in consumers’ pockets, especially the poorest, who consistently spend a larger portion of their incomes on traded goods. Even without a full FTA, there are benefits. One recent study estimated trade liberalisation with China lowered living costs in the USA by 7.3%. In modern parlance: free trade is “America First”.
So too for Britain, but we are at the crossroads still. We could stick with the jobs of the past, prioritise producers over consumers and hold down the quality of life our people enjoy. But there is an alternative. We should be bold and seize the opportunities open to us—putting people first. We know Britain is a great country—but it’s our generation that will decide if we are to be greater still.
Ranil Jayawardena is the Conservative Member of Parliament for North East Hampshire