Alexander Downer: Stop being so gloomy. Global Britain's best years are still to come

Posted On: 
16th April 2018

As the UK embarks on a new future, it must maintain its leadership in the Western alliance. The great democracies of the globe need a strong Britain to help guide and lead them. Don’t underestimate your role in helping to shape the world’s future, writes our guest editor Alexander Downer

Theresa May with Australian Prime Minister Malcolm Turnbull

Four years at the Court of St James has been an exhilarating experience. For a start, modern Britain is a hive of intellectual activity. It leads the world in the performing arts, its media is diverse and entertainingly polemical, and the British countryside has a quiet beauty which is hard to match anywhere on Earth.

Then there is the politics. In my four years as High Commissioner I have enjoyed – that’s the word, enjoyed – two referendums and two general elections. It’s quite possible my successor will have come and gone before there is another election.

I was anxious about the Scottish referendum. Even though I have Scottish ancestors, the breakup of the UK would have been a major psychological setback for the Western world. The second most powerful Western nation would have split. The divorce would have been messy and the UK would have been totally absorbed by its own demise. The fifth biggest economy, a permanent member of the UN Security Council and a nuclear weapons state would have been crippled. You came alarmingly close to that result.

The 2015 election, influenced by the backwash from the Scottish referendum, led inexorably to the Brexit referendum. I forecast the results of the Scottish referendum and the 2015 general election, but I was wrong about Brexit. I could tell the public had little affection for the EU. Talking to them it was clear they felt it threatened their strong sense of British identity. Not many Brits I met wanted their country to become a mere province of a European superstate: like Florida is to the US or Victoria is to Australia. But I judged voters would fear leaving the EU altogether would be too much of an upheaval.

I was wrong. As my former prime minister John Howard said to me the day after the referendum, “the British don’t do fear”.

Taking Britain out of the EU is a major blow to the EU. It has lost not just its second biggest economy but the member state with the greatest global reach and soft power, the most liberal major member state and the member with the greatest force projection capability. Now the EU will become more introverted, less liberal, less transatlantic and less influential in world affairs.

Britain’s future outside the EU will, above all, depend on the internal decisions future governments and parliaments make. Being in the EU is no guarantee of prosperity. Just ask the Greeks. Nor is being out of the EU a guarantee of economic catastrophe. Switzerland and Norway get by. So do we Australians even though our nearest neighbours are developing countries not wealthy Germany, France and the Netherlands.

So, as the UK looks to build on the idea of ‘Global Britain’, it can find a model in the way Australia opened its markets to the rest of the world. As Australia negotiated free trade agreements with a range of countries, our experience was that the whole economy benefited from the opportunities that free trade offers.

Consumers benefited from cheaper goods and services, living standards went up, and the domestic economy was stimulated. There can be no doubt that Australia’s record of over 26 years of uninterrupted economic growth has been underpinned by our free trade agreements and there is no reason to think that Britain should not expect to see similar benefits.

It is obviously equally important the UK is able to continue to trade freely with the EU. Given it is in both the EU’s and the UK’s interests to do so, some sort of agreement will be reached. Indeed, we outsiders would be astonished and angered if the EU and UK decided to erect barriers to their trade where none currently exist. That would not just disrupt European economies, it would be a setback for the global economy.

But let’s not always dwell on the dismal. The UK could end up with free trade with the EU and a range of other countries. Free trade with 27 EU countries has been beneficial, so why would it not work with countries outside the EU as well? You can’t argue on the one hand that free trade within the EU works but outside it wouldn’t. We can tell you from experience, it works for Australia. And it doesn’t mean you have to abandon your regulatory standards for food and safety. After all, we are not forced to import poisonous foods and killer toys!

As the UK begins to look around the world for new partners, it will find there are many countries keen to build stronger economic relationships. Some of the fastest growing economies in the world are in Australia’s region where Britain has strong historic links. It also shares a valuable network with the many Asian and the Pacific Commonwealth countries. The scope for a “global Britain” should not be limited. It should be the whole of the globe. Australia would welcome a more active UK presence in our region.

Trade, though, is only the equivalent of around 25 per cent of Britain’s GDP. It’s your fiscal policies, how you structure your tax system, the flexibility of your labour market and how you develop your infrastructure which will determine your future prosperity.

At the moment, the UK is the second largest offshore destination for Australian investment. Australian investors are attracted to the UK by everything from language and the certainty of the British legal system to your tax system and your labour market. If you make those things less attractive, then investors will go elsewhere. That will for us be a bigger issue than whether or not you’re in the EU. Emotionally you may be upset or thrilled about leaving the EU. But now the public has made the decision, it’s best to get on with making the most of the changes you have to confront.

The one thing Great Britain must do is maintain its leadership in the Western alliance. The great democracies of the world need a strong Britain to help guide and indeed lead them. The UK needs to stay close to America and not turn away because you may not like its president. The power of the West is being challenged, but those challenges will be manageable provided the West responds with unity and resolve. Russia has learnt a lesson in recent weeks. Britain can be tough in standing up for itself and it can call on stalwart allies. Don’t underestimate your role in helping to shape the world’s future.

Oh, and one last thought. Stop being so gloomy. You are a great country and you need to believe your best years lie ahead of you.   

Alexander Downer is the Australian High Commissioner to the United Kingdom and former minister for Foreign Affairs