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The United Kingdomâs economy has been badly ravaged by the pre-Brexit jitters that had gripped the West European nation ever since it decided to leave the European Union in June 2016. Politicians, business owners and the general public at large all have been trying in their own ways to limit the adverse impact that this event was going to have on the country. Â On the macro scale though a significant number of measures had been taken by the government and the Bank of England in order to beat the Brexit blues. Below are seven actions that can have a telling effect on improving the adverse impact of the impending event on the British Economy.
- New Deals and treaties equivalent to the lost business activity post-Brexit â Brexit will bring about a significant loss of business opportunity to the British economy. The European Union treaty not only brought a broader market for British goods but also provided it with cheap and quality resources to make its economy competitive. The loss of this treaty necessarily entails that similar new trade treaties need to be entered into by the country with other economic blocks so that the country's Economy does not lose its edge. The British administration has already signalled that it is in advanced stages to negotiate new deals with a number of European countries outside the ambit of the European Union treaty and with the United States of America which would more than just compensate for the loss of business due to Brexit.
- Using the opportunity to bring about long-overdue reforms â This is also an excellent opportunity to bring about broader far-reaching changes in the British Economy. Call its revision of tax policies, excise and custom procedures, even regulation of professional services will go a long way in making the United Kingdom an efficient market and more conducive for business to operate and new businesses to start and establish operations. Her Majestyâs Treasury in a policy document published in April 2019 named âUK National Reforms programme 2019â has outlined the below as the reforms it intends to bring in, in the near future; first â restrict the primary government expenditure to 1.6 per cent of GDP in 2019-20 with adjustment of 0.6 percent annually thereon, second- Boosting the supply of housing in the British economy and Third â investing in skill development and apprenticeships.Â
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- Diversify the international market base â One of the more significant problems that the British Economy will be facing as a consequence of Brexit is a loss of market. European Union did not only provide a large market to the British Goods and services but also was a significant resource base to source raw materials and quality workforce taking advantage of the relaxed regulations for countries within the European Union. An overdependence on the European union grew over a period of time which has now come to haunt them. It is thus imperative that the United Kingdom now expand its market and resource base so that it may never have to face such a risky situation ever.
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- Further, internationalise the British economy â One of the aspects of the British capital markets giving it relative safety against the economic headwinds of Brexit is the international business operations of several of its large constituent companies. The operations of the companies were not heavily influenced by the negative headwinds of the British Economy, and they continued to perform well. This provided the London Stock Exchange with not only a strong anchor but also brought in significant foreign revenue into the British Economy while the internally it was slowing down. This aspect accentuates the importance of internationalisation of the British Economy and that role it can play in making it less risky.
- Hasten the energy resource evolution process â One of the major expenditure items for any country is its energy bill. Petroleum, gas or electricity whatever it may be and its efficient usage makes a country either efficient or expensive to operate in. There is currently a significant evolutionary change taking place the world over in the transition to use more efficient and clean energy resources so that the current alarming rate of environmental degradation can be stopped. Energy resources like coal and crude oil are progressively being replaced, and energy-efficient devices using electricity produced from non-polluting sources are coming into widespread use. The United Kingdom should hasten this process to able to capitalise on its inner strengths, thus making a transition to an economy which is more efficient and future ready.
- Making the British Bureaucracy leaner â One of the essential facets of the reforms process in any government is making it is more efficient and less burdensome on the taxpayers' pockets. The British government should use this opportunity to push for further efficiency in its bureaucracy so that not only its citizens are benefited but also businesses will find it easier to deal with the government and make it easier to transition to a new economic order.
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- Skill Development is the Key â The last yet the most crucial thing that needs to be done is to invest heavily in developing the skillsets of the British people. One of the significant problems that the United Kingdom is going to face as a consequence of Brexit is the loss of highly skilled workforce which could come from other European countries to work in the United Kingdom. Now under the new regulations, these people would have to either go back to their home countries, or it will be costly for British companies to hire skilled manpower. This has brought to light the vast shortfall of skilled workforce that the British economy requires, now that it will no longer be a part of the European Union.
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This aspect thus needs to be given the highest priority if the country has to overcome the ill effects of Brexit, as British companies will be facing severe resource crunch on this account in the short to medium term, leading to loss of competitiveness.
