Hong Kong has become an economic powerhouse (Image: Getty)
New British cities could thrive if they were granted independence from Westminster under radical proposals from an economist.
The UK could create thriving “free cities” similar to Hong Kong, which became a global economic powerhouse despite a population of just 7.5million people.
It would mean cities are free to set their own laws and tax rates.
In a new report for the Institute of Economic Affairs, economist Vera Kichanova argues that the UK risks being left behind while financial hubs in Dubai and Qatar, which use English-style common law legal systems, steam ahead.
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As of 2020, Hong Kong’s economic output per person was above $45,000 – more than the UK, Canada or Japan, and more than four times as much as mainland China.
Its success is seen as a result of its English legal system and the freedom granted to industry, which has largely continued even after the territory returned to China’s control in 1997 after 99 years of British rule.
The UK is creating five new “freeports” where industry enjoys lower taxes after Labour adopted a policy previously developed by ’s Conservative government.
But Dr Kichanova, a senior economist at the Free Cities Foundation, said these did not go far enough and actually added another layer of bureaucracy.
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She said: “There’s no need to reinvent the wheel — these strategies have already delivered spectacular results elsewhere. The UK has the potential to create its own Hong Kong — perhaps even multiple ones — within its borders.
“Compared to the achievements seen around the globe, the current freeports model feels uninspired. By leveraging our rich urban heritage, we can develop zones of exceptional economic growth and innovation right here at home.”
Kristian Niemietz, editorial director at the Institute of Economic Affairs, said: “This is one of those proposals which may sound very radical at first, but it is really just a consistent application of the principles of decentralisation, local self-governance, market-like competition between political jurisdictions, and experimentation with different models of governance.”