10 Leaders The EconomistFebruary 1st 2020
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pieces proclaiming “peace, prosperity and friendship with
all nations” will go into circulation to mark Britain’s departure
from the European Union, but people, goods and services will
continue to move freely between Britain and the eu, for the diffi-
cult business of making a deal on trade and migration has been
left to the transition period that lasts until the end of this year.
Yet leaving the euis a huge moment. Britain will be quitting
the institutional structure that governs Europe’s single market,
which will necessarily imply more friction in its trade relations
with a club that takes almost half its exports. Britons will lose the
automatic right they now have to live and work across the eu.
Brexit has also administered a shock to the country. The nation
has argued long and bitterly over the issue, and its ruling elite
has suffered a blow. The unarguable outcome is the most power-
ful government in a generation, under Boris Johnson. Much now
depends on how he responds.
The Economistdid not advocate this outcome. Most of the
changes that Mr Johnson’s government favours could have been
accomplished without leaving the eu. System-wide shocks are
usually a costly way to bring about change. Yet now that Brexit is
definitely happening, the country should make the most of the
chance to recalibrate the economy and reset its priorities.
The last couple of times Britain pressed the
reset button, in 1945 and 1979, the programmes
that it put into place to create the welfare state
and replace socialism with Thatcherism had
been long-planned. This time is different. Mr
Johnson was focused entirely on leaving the eu
and is now being buffeted by the storms that
brew up swiftly in the affairs of state: he had to
decide this week whether to bow to American
demands that Britain keep Huawei, a Chinese company, out of its
mobile-phone network (he did not), and must shortly make a call
on whether a high-speed rail project to link the north of England
to the south (hs2) should go ahead (it should).
Mr Johnson grasps the excitement of the moment, but so far
he has shown himself no more than a brilliant opportunist. If his
premiership is to leave its mark, it needs to be founded on a stra-
tegic vision, not tactical campaigning.
That vision should be based on liberalism. The belief in free-
dom as the underpinning of civilisation, in the state as the ser-
vant of the individual rather than vice versa, and in the open ex-
change of goods, services and opinions, arose in Britain. It fits
naturally with a national character which suspects authority and
tends towards pragmatism rather than idealism. It underpinned
the country’s progress in the 19th and 20th centuries and spread
to become the world’s dominant political philosophy. But it is
now under threat, not least in Britain.
Brexit was born in part of the instincts to throw up barriers
against the world. But within it was an ultra-liberal strand,
which regarded the euas too statist and parochial. Mr Johnson
needs to unite the liberals and to persuade sceptics that a system
based on free markets and free trade can work for them, too.
Abroad, liberalism means using Britain’s still-considerablemuscleintheserviceoffreetradeandindividualrights,whether
in backing the World Trade Organisation or holding China to ac-
count for abuses in Xinjiang. Mr Johnson’s decision that the
country should use Huawei’s equipment was, thus, right: liberal-
ism means not going along with President Donald Trump’s at-
tempts to drive China out of global technology supply chains.
Liberalism may also on occasion mean diverging from how
the euregulates business. In many areas, like manufacturing or
food safety, following standards set in Brussels may be sensible
even after Brexit, not least because the eumarket is so valuable.
In others it may be a bad idea to accept the eu’s rules. In financial
services, competing eufinancial centres may seek to use regula-
tion to handicap the City. In science and technology, Britain’s in-
stinctive approach to regulation, which tends to be principles-
based rather than relying on precaution, may be better suited to
fostering innovation than the eu’s.
At home, liberalism means making the system open to all
comers. Beneath the Brexit vote lay discontent that sprang from
the sense that an economic system which pretends to be open is
actually based on cronyism, run by and for a glossy, overpaid
London-based elite impenetrable to those who are poor, provin-
cial and without a foot on the property ladder.
Mr Johnson’s mantra is “levelling up” by boosting growth in
the regions. He should be talking about “open-
ing up” to give everybody the opportunity to
share in prosperity. That means encouraging so-
cial mobility by spending more money on chil-
dren’s early years, allowing the construction of
more houses so that younger people can have
decent homes, running an energetic competi-
tion policy to keep incumbents on their toes and
building roads and railways in areas that have
been short-changed. hs2 should be part of that: although its esti-
mated costs keep rocketing, the gains from boosting rail capacity
and speed across Britain will outweigh them.
Neither should the agenda be purely economic. Self-determi-
nation is central to liberalism, but over the past 150 years, power
has slowly leached away from the English regions to Westmin-
ster. Scotland and Wales were given considerable autonomy in
1999, but England is highly centralised. Brexit was England’s re-
venge on Westminster (see Bagehot) for giving special privileges
to Scotland and Wales but ignoring the regions; and the conse-
quence may yet be the break-up of the union. But whatever the
fate of the union, a liberal government needs to decentralise
power, not just because decisions are best made as close to the
action as possible, but also because people need to feel they have
power over their own destiny.
Britain’s future is full of uncertainty. No longer part of one of
the great global blocs, it has to find a new role in the world. Pulled
apart by the tensions within the union, its nations need to find a
new accommodation. Shaken by the bitter arguments over
Brexit, it has to mend its frayed social contract. The difficulties
should not be underestimated. But when Britain previously reset
its course, in 1945 and 1979, the choices it made helped reshape
the world. It should aim to do that again. 7Into the unknown
Now that Britain is sailing in uncharted waters, Boris Johnson needs a lodestar. Liberalism offers oneBritain after Brexit