A Manifesto for Lord Mandelson - Part 2
In line with our introductory post last week, the UK has become more adventurous, at this point more facing westwards. In the FT on 13 January, the PM wrote, “We don’t need to walk down a US or an EU path on AI regulation - we can go our own way, taking a distinctively British approach”, but four days later in the same paper, he added, “Our ambition is to have a deal of some sorts with the US, a trade deal. That’s where our focus is.” So it’s game on for Lord Mandelson - assuming the President accepts his credentials, of course.
What we want
From the US, it’s not so much raw cash: we are already the largest destination for American direct investment, at c$1tn out of a total of c$7tn. We would, however, be keen on beefing up technology transfer, not just in AI (identified as an official target by the government), but in less headline areas of world-beating American know-how, such as medical treatment and housing. These have ample potential for local upset, so let’s park them till our forthcoming posts on the subjects concerned. Our other big ask from the Americans is continued defence commitment, covered in our next post.
In dealing with the EU, we are set to disappoint Donald Tusk by ignoring its customs union and single market, irrelevant to us for the reasons drawn out in our introductory post. What we might go for is improved access for selected industries, with legacy chemicals to the fore; plus co-operation on border-control and other defence cooperation, also to be discussed in our next post.
What we offer
We offer both sides
an import market of c£0.9tn and public procurement of c£0.3tn annually;
inward investment opportunities, of late averaging c£30bn annually, unfortunately with fresh restrictions in prospect;
an education sector, which genuinely does punch above its weight (doffing our caps to the Aussies and Dutch who do better still on a per capita basis) ; and
a spirited tech sector, with London, Cambridge and Oxford plucky also-runs to Silicon Valley, New York City and Boston.
We offer the US
manufacturing and professional labour, capable of being led by effective combos of investment and management, with lower wages than the US but higher costs of doing business, due to our sclerotic energy, land, and regulatory regime. The possibility of a US deal would give the government cover to revisit fresh controls in prospect, though six months may be too soon for such a reversal.
increased freedom of movement, at least for students and young people: not the free-for-all of former arrangements with Europe, but akin to the deals already in place between selected pairs of Australia, Canada, New Zealand, the US and ourselves, with such schemes a target for American negotiators; and
greater defence spend, subject to the government’s fiscal rules.
We offer the EU
deep capital markets: the idea would be keeping down the costs of Euro funding, including possibly repealing stamp duty, while mutually ratifying the reality that the EU has given up trying to repatriate the business;
increased freedom of movement, which the EU much misses: full restoration of the former position is off the cards, but a properly policed youth scheme could be a runner; and
fishing rights, which mean a lot to France, and might encourage greater cooperation in the Channel.
Next, defence.