Today we'll know who our next Prime Minister will be, and Wednesday will see the Maybot's last PMQT before she heads off to formally resign to the Queen at Buckingham Palace on the afternoon. No matter who our next PM will be, either Boris Johnson or Jeremy Hunt, we need to rebuild that special relationship with our closest ally, America.
We've never seen a special relationship between our two great nations since Mrs Thatcher and President Reagan and before that Churchill and Roosevelt; with a bit of luck we'll elect Mr Johnson who has already been publicly backed by President Trump. Brexit is the perfect opportunity to rebuild that crucial relationship we have somewhat abandoned since the signing of the Treaty of Rome; post-Brexit the US will be undoubtedly our biggest political and economic ally and the President has already expressed interest in a "free trade deal".
When it comes to the special relationship between Prime Ministers and Presidents nobody thinks of George H.W. Bush and John Major or Richard Nixon and Ted Heath or Jimmy Carter and Jim Callaghan or even George W. Bush and Tony Blair; it always goes back to the two aforementioned relationships. One was at a pivotal moment of securing our freedom from Nazi tyranny and the other was through an era of revolution and protecting the West from Soviet tyranny and secrecy. Now it's time to forge an unforgettable special relationship to make sure that we have fantastic trade links with all of the global trade heavyweights.
The Golden Age of Capitalism was the 1980s and that was when the bond was stronger than ever, co-operation was at its highest across the Atlantic and both the PM and President were on the same page. Unfortunately, we haven't seen that since with clashes of either personality or political ideas getting in the way, now it seems that the Prime Ministerial elect and the President have more in common than their hairstyles! Mr Johnson and Mr Trump could be the most ideologically similar since that of our two leaders in the 80s and this is key to reforming some severed links. It was in that decade that the two global financial capitals were in their prime, both stock markets were at their peaks with privatisation of most industries in the UK, it was then that New York's stock market grew substantially under Reagan and London excelled under Mrs T's reforms which saw the beginning of the global financial sector we know today in the City and Canary Wharf.
During that period, GDP growth hit nearly hit 6pc, compared to negative growth in the previous decade. The biggest spike was in the latter part of the decade as a result of the Lawson boom which saw taxes cut to an all time low and trade at an all time high, especially between the UK and US, where President Reagan had made similar reforms across the pond when it came to taxes and encouraging enterprise rather than the anti-business policies that keep flowing from the European Commission.
One of the major problems with the EU is the fact that discourages business, entrepreneurship and innovation, something which Lady Thatcher pointed out in her Bruges Speech at the College of Europe in 1988. It was that special political relationship and the political soul mates of Thatcher and Reagan that created a prosperous economy in both nations and helped bring down the tyranny of the Soviet Union and its planned economy. The EU's own regulations are reminiscent, in some ways, of Soviet ideas, disincentivising business and instead encouraging corporatism and conglomerates rather than looking out for the sole trade and small to medium size firms.
If we do leave the EU without a deal on 31st October then not only will it release us from the shackles of Brussels in terms of democratic measures but also economically, it will allow us to pursue free trade deals with some nations we have perhaps forgotten how crucial they are to our economy. There are none greater than America, it would be folly to let this opportunity of negotiating a free trade deal and better terms pass, especially with possibly the most pro-British President since Ronald Reagan. How can we possibly abandon our closest friends and cousins in favour of some European bureaucrats? The very fabric of our democracy is in jeopardy by staying in the European Union in the form of risking seeding our powers to Brussels and the unelected Commission which even came under scrutiny from Jean-Claude Juncker of all people! How can we even think about choosing the EU over the rest of the world, deal or no deal, especially those countries like America, India, Canada, Australia and New Zealand who stood side by side with us in two world wars and have constantly supported our great nation through the course of history. Let me put this to you, who would you prefer to be doing deals with Donald Trump, elected by nearly 63 million members of the American public and President of our greatest ally. Or Ursula von der Leyen, elected against no opposition by nine votes and a failed German Defence Minister whose department was under investigation, now in charge of the European Commission – possibly the least democratic position in a so called democratic body. I know which one I'd rather be in talks with!
Both Mr Johnson and Mr Trump are committed to reducing the red tape and regulation in their respective nations and both are more than enthusiastic for a "transatlantic super deal" to boost both of our economies. It's the EU who put more and more red tape on business and drive up production costs which are passed onto the consumer. Not only that, both gentlemen are also passionate about their respective nation states, both have pride in their countries and realise the importance of the special relationship. President Trump is also a huge supporter of British values and reinstated a picture of Sir Winston Churchill at the White House in the Oval Office as well as being a self-confessed "royalist". Whereas Boris Johnson was himself born in New York when his father was working in the States. As Foreign Secretary, Mr Johnson was a vocal supporter of the President and already has a working relationship with both Trump and Ambassador Woody Johnson.
The EU hasn't allowed us to have a truly favourable trade deal with our oldest ally who has been with us through thick and thin; now is the time to get that trade deal! Mr Trump has said that "the UK are the front of the queue for a trade deal" and is an avid Brexit supporter himself having always been a sceptic of the EU. Why is it that we aren't leaping at the chance of a trade deal with America? Why aren't we seizing this opportunity? Hopefully the new PM can see how big of an opportunity Brexit is to forge fantastic trade links with not just America but the rest of the Commonwealth and even China.
It's not just the man who lives at Number 10 who needs to be the most pro-business, outward looking and global politician but also the person who lives next door at Number 11. It's now the time to see the next Sir Geoffrey or Nigel Lawson, with Sajid Javid tipped to be the next Chancellor it's now time to cut taxes to encourage business rather than drive it away. And that's not just income tax bands that need reforming but also a reduction in corporation tax, the past has proved that CT cuts lead to more revenue for the Exchequer, something that the Adam Smith Institute's Dr Eamonn Butler points out in the fact that we should be scrapping corporation tax completely as it's a tax when "you earn money you're taxed; when you save that money you're taxed and then that same money is taxed for a third time when you invest it". In all honesty, corporation tax is completely regressive and as the great Dr Morgan Friedman said "you can't tax business, only individuals" and that couldn't be closer to the truth; ⅔ of corporation tax is paid by us (consumers) in the form of higher prices and the other third by workers in the form of less wage increases according to Dr Butler.
The new Chancellor needs to take these points on board as let's face it, which firm is going to want to invest in a country with exorbitant levels of corporation tax? Personally, I'm in the same camp as Dr Butler and Dr Friedman in the fact that even 19pc is far too high, even Ireland's famously 'low' level at 12pc is still a bit too high for my personal liking. Butler suggests that an "emergency post-Brexit budget which reduces the high rate of income tax as well as lowering corporation tax". Furthermore, the Director of the ASI notes how the EU and Jeremy Corbyn "want rid of overseas investment" as well as the latter in particular wanting to limit private ownership. My personal view on Jezza the Red and his band of Marxists is that by stopping private ownership of shares in companies, industries such as his plan for renationalisation of the railways and Mr McDonnell's plans to reduce the pass down of property to family, which is completely absurd, you limit the freedom of the people and as we know "when the people are free to choose, they choose freedom" – Margaret Thatcher.
Finally, Brexit is not only the perfect opportunity to create a better trade relationship between the UK and US but to embrace free markets and to encourage business, enterprise and innovation. Britain has been the home of the industrial revolution, technological revolution, now it's time for a third trade revolution post-Brexit with a truly global, outward looking perspective on world trade.
Please feel free to share your thoughts with me on Twitter and Instagram @ethan_thoburn and also a huge thank you to the fantastic insight from the Adam Smith Institute's fabulous Director, Dr Eamonn Butler.
References:
https://www.independent.co.uk/news/uk/politics/trump-uk-us-trade-deal-brexit-eu-leave-theresa-may-china-talks-national-emergency-a8781606.html
https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/articles/trendsintheukeconomy/2015-02-27
