It is just possible as of today that by 17th/18th October at the European Council meeting, using perhaps even its well-tried mechanism of stopping the clock, an agreement on a EU-UK Withdrawal Agreement under Article 50 can be achieved and the UK leaves the EU on 31st October with Conservative, DUP, some Labour and Independent MPs’ support. That would be by far the best outcome. Yet it is much more likely that there will not be a positive response in Brussels and that there will be no EU-UK Withdrawal Agreement before the House of Commons for the fourth time.
In which case, on 19th October, on instructions from the European Union (Withdrawal) (No 2) Act 2019, more commonly referred to as the ‘Benn’ Act passed into law on the 9th September, the Prime Minister will be forced to write to the EU asking for an extension under the terms of Article 50. But issuing that letter cannot preclude the executive taking other legal actions to protect UK national interests. A rather neglected part of the full Supreme Court judgment on prorogation in paragraph 55 says remember “always that the actual task of governing is for the executive and not for parliament or the courts”. Extension is a device to delay again a decision. It probably does stop a so-called ‘no deal’ under Article 50 but it need not stop the UK leaving on 31st October.
What we need to do before writing any extension letter is for the UK Government to write, preferably now, to all of the 31 other countries who are contracting parties to the European Economic Area Agreement (EEAA), as well as to the EU, indicating that whether or not an extension is granted by the EU, the UK intends to continue in the EEAA as from the 31st October. A separate letter to the three non-EU EEAA members would also ask that the UK can participate in the EFTA governance pillar. If the extension is granted by the EU, the UK will have to continue to talk about a Withdrawal Agreement but it will then be in tandem with the UK being no longer in the EU and still being a contracting party to the EEAA.
Preparations for an exit from the EU on 31st October 2019 must not be reduced but stepped up. The Government has to do this for there is no doubt that some MPs and some in the EU see an extension as the mechanism for the UK to remain in the EU. It is a well-used technique in the past for other EU countries which after unacceptable referendum decisions were subjected first to delay and then forced to repeat referendums. Fortunately, continued membership of the EEAA for a transition period outside the EU can only be challenged in law within the Vienna Convention on International Treaties which the UK will fight. In the EEA Single Market there will be no need for the UK to take recourse to WTO tariff schedules for intra-EEA trade. Irish border problems associated with leaving the EU would be more manageable by virtue of the regulatory harmonisation on SPS and other trade issues that the continued membership of EEA would bring. Even some problems over cross-border customs duties could be reduced and it would be wise for the UK Government to start to unilaterally implement in Northern Ireland the new cross-border trade and customs provisions suggested to the EU as part of the Withdrawal Agreement by Prime Minister Boris Johnson.
Throughout the last three years I urged Theresa May not to foreclose the option of transitioning out of the EU through the EEAA option as we leave the EU because I believe all of Europe would benefit from an EEA transition, rather than to leave with no deal at all. It is important to recognise that the former Prime Minister came very close in March 2018 to submitting the necessary letter giving the mandatory 12-month notice, but at the last moment our Ambassador in Oslo was stood down from delivering the signed letter from Theresa May. That letter would never have been even contemplated if it was not thought to be legally desirable before signing a Withdrawal Agreement under Article 50 a year later, as she planned to do.
Without having delivered the letter, the former Prime Minister has fortunately, intentionally or unintentionally, left open the option of our continuing membership of the EEA but outside the EU. In an EU extension period, the UK can compare any likely Withdrawal Agreement stemming from those talks with continuing in the EEAA, having control of our own fishing negotiations on conservation and other fishing matters and starting our own trade negotiations with other non-EU countries worldwide.
Single Market transitional arrangements underpinned by the European Economic Area Agreement is something which we were anyhow continuing under the terms of all the drafts of the Withdrawal Agreement so far, albeit in an attenuated form, since it prevents us from exercising our rights on fishing and to enter free trade agreements. This relationship to the EEA was purposely obscured for those MPs who wanted to pretend that there was no involvement with the Single Market for a transition period in all the three Withdrawal Agreements offered to us by the EU. Had we accepted without giving the statutory notice, we would have claimed it was justified by saying de facto we were still in the EEAA in the Withdrawal Agreement. The minor legislative changes necessary eventually for completing this move for the UK leaving the EU simply mirror the changes but in the opposite direction to when Austria, Finland, and Sweden – members of EFTA – acceded to the EU. The changes in legislation then were so minor that the legislative changes to the Treaty were not completed for nine years. So, there is no need at this stage to put these minor changes about non-EU membership into the European Union (Withdrawal) Act 2018 which states we are leaving our current status as EU members of the EEA. It is noteworthy that Croatia is already in a different category for EEA membership called ‘provisional’. What is being done is making a minor adjustment to an existing Treaty and such international documents quite often only make the legislative adjustments much later.
Given the build-up of negativity in the EU over whether a Withdrawal Agreement under Article 50 can be negotiated twenty days before the 31st, now is a good time to indicate to all EEA members, including the three non-EU members, that we will be continuing our membership but as a non-EU member after 31st October. This non-EU EEAA transition period can in no way be reasonably depicted as ‘crashing out’ of the EU. In the absence of agreement under Article 50 it takes every possible measure open to us to soften leaving while not being forced into an EU customs union. It renders the Irish backstop null and void. which all along has in reality challenged the core principle of consensus between the parties to the Good Friday Agreement. After a period of adjustment, non-EU EEA membership for the UK during the transition offers a better chance of restoring consensus in Northern Ireland and it is a weakness in the Good Friday Agreement that the Assembly can stay suspended for such a long period and one we all need to try to bring to an end.
What was never given any civil service consideration by David Cameron’s Government was Article 50. He simply announced we would exit through it without any understanding of the very nature of Article 50. It is not a conventional international negotiation. It was designed by two distinguished figures, the former UK diplomat, Lord Kerr of Kinlochard, and by the former Italian Prime Minister, Giuliano D’Amato, both ardent federalists who have made it abundantly clear in public and private that their design of the Article 50 for the Lisbon Treaty was deliberately weighted against the country wishing to leave the EU, in a way that no sensible government would ever invoke it. I have never ceased to argue that the UK should not have used Article 50 of the Lisbon Treaty, since it was a mechanism fraught with so much difficulty for us and that we should have exited through the arbitration procedures within the terms of the Vienna Convention on International Treaties.
The crucial error that the UK Government made in presenting their case before the Supreme Court which started on 17th September 2019, following the Government’s decision on a long prorogation of Parliament on 9th September, was in not demonstrating that the concept of parliamentary sovereignty involves much more than just how long and when Parliament sits. It involves governing in a complex, increasingly international world. We in the UK have evolved over the centuries two separate systems: firstly a separation of powers between the judiciary and Parliament; and, secondly, a fusion of powers between the executive, consisting mainly of MPs on the frontbench of the House of Commons, and the official Opposition who communicate through the “usual channels” and backbench MPs from different parties as well as a few independents. The current deadlock in Parliament and postponement of exiting the EU after the referendum, which has gone on for three years, has meant that the functioning of the fusion of powers between the executive and MPs has broken down and that should have been stated from the outset by government lawyers to the Supreme Court.
The fact that the Withdrawal document proposed by 27 EU countries has been defeated three times by the present Parliament raises profound questions for the government about UK MPs readiness to ever endorse the EU referendum decision. This political change in the conduct of government and accountability to Parliament following a referendum should have been the central argument raised by government lawyers during the hearings in the Supreme Court to explain the background to the decision of the government on prorogation. Nor did they bring before the Supreme Court the Government’s view, repeatedly expressed in Parliament and elsewhere, that Speaker Bercow, whose favourable views on the UK’s continued membership of the EU he had made abundantly clear, had called in question the most precious attribute of a Speaker – namely, their impartiality. Nor did the government in the Supreme Court question in depth the legality of the very recent but highly relevant changed procedure of the House of Commons allowing the ‘Benn’ Act to pass rapidly into law on 9th September 2019. Nor did they challenge the Cooper/Letwin Act passed earlier. The Supreme Court was never told in unequivocal terms that prorogation was a failsafe against this type of legislation affecting the ability of Her Majesty’s Government to fulfil the referendum result through Article 50. Now it may be argued these events coming after prorogation were not relevant to the case, but clever advocacy could have got around that objection.
The UK executive has had, over many centuries, powers in relation to Treaty negotiations to preserve the confidentiality of their negotiating position, to trade positions around difficult compromises and settle on an overall deal without the interference of Parliament in the negotiating process. But the Supreme Court is not like the US Supreme Court; it does not have the power to ‘strike down’ the ‘Benn’ Act. It is the last Act which is the law and our Supreme Court does not have the power to declare an Act of Parliament illegal. The US Supreme Court does have that power as does the French Constitutional Court. For this reason, it is fanciful talk to say we can ignore the ‘Benn’ Act. We have to circumvent it with another legal way of leaving the EU and what I propose is, I believe, the only way.
Even though under ‘Benn’s’ European Union (Withdrawal) (No 2) Act 2019 ordering the Prime Minister to write asking for an extension of Article 50 in the event of no agreement on 19th October, when it may be clear to the UK Government and even the 27 EU governments that there is no realistic chance of reaching an Agreement under Article 50, the UK has to send the letter. If the 27 EU countries were wise they would in this situation refuse any extension request, and accept the UK’s intention to leave the EU under the EEAA and cooperate with the UK on this new transitional exit that would be to the mutual advantage of all countries in the EEAA.
The above is an abridged version of a speech delivered to the Cambridge Union on 8th October 2019.
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Delaying Brexit has come at a cost.
It has cost us trust in our democracy.
For those who voted in good faith at the last General Election; who believed the promises of MPs who said they would honour our vote to leave the EU.
And it has a massive financial cost – in extra payments to the EU.
It costs an extra £1 billion in payments to Brussels every month we delay.
And how much has this delay cost us in lost opportunities?
The very opportunities which we voted for – to lower living costs by forging new trade deals around the world.
With so much delay, is it any wonder my friend Jacob has taken to lying down on the government front bench.
But there has been one, immediate cost from delaying Brexit…
The prolonged uncertainty has caused worry and concern to over 3 million EU Citizens living in the UK.
For those EU citizens living here, I have a direct message today.
You are not a part of the negotiation. Your life and livelihood in the UK is not in doubt.
The Prime Minister set out in his first hour in office, on the steps of Downing Street, that we want you to stay.
To bring up your families in our communities…
To work in our public services and for our businesses…
In our NHS – where there are now 700 more EU doctors than at the time of the referendum.
We value the contribution you make to our country and are pleased that you have chosen to make your home here.
We have guaranteed your rights to live, work and stay in the UK with full citizens rights for as long as you choose.
Now it is time for the EU to match that guarantee.
We are all too familiar with the refrain ‘despite Brexit’.
Yet, despite Brexit, we have record low unemployment… and the highest inward investment of any country in the EU.
Despite Brexit, just last week, London overtook New York to become THE world’s number one city for investments in fintech firms…
And despite Brexit, Jaguar Land Rover have opened the UK’s biggest state-of-the-art car design centre in Warwickshire, delivering a £500m vote of confidence in Britain.
It’s time to stop apologising for Brexit, and to unleash the opportunities it offers.
We can source products that we do not produce at a better price.
Too often the EU restricts access to markets that want to trade with us…
Like the foods that we do not grow, or the goods that we do not specialise in producing,
With new trade deals with other countries we can help the developing world through trade, rather than handing out aid.
To empower countries through free trade is the essence of being Conservative, and an important reason why I am a Brexiteer.
To use Brexit as a catalyst for change across all parts of our United Kingdom, including areas like my own in the Fens…
Who see Brexit as an opportunity – not a problem to be solved.
Jeremy Corbyn parades his credentials as an animal welfare campaigner.
But his delay prevents any sovereign choice on the continued live exports of animals.
He claims to care about the planet, yet his delay to Brexit means we can’t choose to remove VAT on environmental products like solar panels.
His delay prevents us from implementing a new Agriculture Bill designed for our British farmers rather than the French.
Delay also means less time to focus on our people’s priorities.
It’s the Conservatives who want to get Brexit done so that we can focus on what the people want to see.
The biggest increase in spending on the NHS…
Tackling crime through the extra 20,000 police officers…
Levelling up opportunity, including on school funding…
And delay puts our United Kingdom at risk..
Encouraging the Scottish Nationalists that if one referendum can be ignored, then so too can the 2014 referendum on the integrity of the UK itself.
We will defend the Union – because we are the Conservative and Unionist Party.
And what do Labour want to have more delay on Brexit for?
They cannot even count the vote at their conference on what they want to do… and it wasn’t even Diane Abbott doing the counting.
Sit on the fence?
Keep it a secret until after the election?
Labour don’t trust the people and that is why the people cannot trust them.
Labour ignore the votes of the many, because they prefer to listen to the opinions of the North London few.
Their position is to negotiate Brexit and then to scrap it.
That would demolish the UK’s negotiating position.
And what would they do once they had negotiated this fantasy ‘better’ deal?
As the Shadow Foreign Secretary herself has made clear, they would bring it back and have an unwanted and divisive second referendum, where they would campaign for Remain against their own deal.
Labour’s Brexit policy can be summed up in three words: dither and delay.
And look at the so-called Liberal ‘Democrats’.
They want to revoke Article 50 without even letting you have a say.
The Lib Dem position is now so extreme that it has even been rejected by the Green Party.
The Irish Deputy Prime Minister said on Wednesday that “there are solutions to this but it is a matter of political will”.
The Commission has said that it is open to “creative and flexible solutions on the border in Northern Ireland”.
I am too.
President Juncker said “he is not wedded to the backstop”.
Nor are we. So let’s abolish it.
The Prime Minister and I are focused on negotiating a deal.
But if we can’t get a deal, we’ll leave on 31 October anyway.
Michel Barnier once said that “the clock is ticking”.
For Jeremy Corbyn – the election clock is now ticking very loudly.
Our communities should not have to pay millions for each further hour of his delay.
We, as Conservatives, know it’s your money that he would waste.
We need to get Brexit done. And with this Prime Minister, we will.
It’s great to be here with you. I want to start by thanking all the delegates, trade unions, members and the whole Labour movement for your incredible support over the last year. Thanks also to my fantastic shadow Brexit team – in the Commons and in the Lords.
What a year it’s been.
In the conference motion you passed last year, you asked us to vote down Theresa May’s flawed deal. We did. You asked us to take all possible steps to prevent No Deal. We did. You asked us to keep the option of a public vote on the table. We did.
But now we face a very different challenge. Boris Johnson, leading the most right wing government in living memory. A man with no moral compass. No principles. And no regard for the truth. A man so unfit for the job that John Major has taken him to court. And even David Cameron has branded him ‘self-serving’.
I don’t believe a word that Johnson says. And neither should you. Johnson told us Brexit would be good for the NHS. It won’t. He told us shutting down Parliament wasn’t anything to do with Brexit. It was. He told us that he can unite the country. He can’t.
He has never put anyone’s interests above his own. And he’s not going to start now With Dominic Cummings pulling the strings, he threatens to take us out of the EU without a deal. No Deal might not be a problem for Boris Johnson, Jacob Rees Mogg or Dominic Raab but it would be a disaster for working people across the country. This is not a game.
Manufacturing would be torn apart. The service sector decimated. There would be chaos and delay at our borders. Vital foods and medicines will not get through. And the Good Friday Agreement could be imperilled. We will never accept that.
That’s why we were right to work on a cross party basis during the summer, with Jeremy uniting the opposition parties. To come together three weeks ago to pass a law to stop a No Deal Brexit on 31st October.
We used to call Theresa May’s government a ‘zombie’ government: but at least she occasionally won a vote. So far with this Prime Minister, it’s Johnson 0; Corbyn 6
It tells you all you need to know about Boris Johnson that we had to pass a law to stop him taking us out of the EU without a deal and that his first instinct is to try to find ways to break that law.
Well, Prime Minister, no one is above the law. And if you think we are going to stand idly by while you break it, you’ve got another think coming. When Parliament resumes we will be ready.
But while preventing No Deal is vital, it’s not an end in itself, it’s an insurance policy. It won’t break the deadlock. The county wants to move on. And we have to find a way forward
Conference, there is only one way forward – put it to the people!
Too much has happened in the last three years for this now to be decided without the consent of the public. We need to ask the public whether they are prepared to leave with the best deal that can be secured. Or whether they wouldn’t rather Remain in the EU. The people must have the final say.
A referendum in which ‘Remain’ should – and will – be on the ballot paper. Along with the best leave deal that can be secured. We owe it to those who want to leave to secure that leave deal and put it to them in a referendum.
Conference, we’ve come a long way. An Election is coming. It is inevitable. We have a Prime Minister with no mandate, no plan, and no majority. We’ve beaten the Tories in Parliament. Soon we will have to beat them at the ballot box.
The choice is stark. Lose, and the 2020s could be another lost decade. A No Deal Brexit, on top of a hard-right agenda that will strip back rights and protections and sell off public services. Win, and Labour can pull this country back from the brink: end austerity, rebuild our public services, and invest in our communities. The stakes could not be higher.
So Conference, I can announce today that an in-coming Labour government will legislate immediately for that referendum to take place. It will take place as soon as possible – and no later than 6 months from a Labour government taking office.
So, I have a very simple message today: If you want a referendum – Vote Labour. If you want a final say on Brexit – Vote Labour. If you want to fight for Remain – Vote Labour. Labour will let the people decide.
Conference, you know where I stand on the question of Remain: I’ve said many times that I will campaign for it. But I profoundly respect those who take a different view. And Conference, let’s go into this with our eyes open.
In 2016 Labour campaigned for Remain. We did so because we are internationalists. We stand in solidarity with our friends and neighbours in Europe. We profoundly believe in peace, reconciliation, human rights and collaboration across borders. Socialist values. Our values. Then and now. And let those values guide us on the road ahead.
But we didn’t just campaign to Remain. We campaigned to Remain and to Reform. We cannot – and we should not – just defend the status quo in Europe or at home. We must make the case for radical reform in Europe and at home. We are the largest socialist party in Europe. It is our duty to lead. Let us bring together our sister parties across Europe. And host an international conference to forge our shared plan for a social Europe. With the UK at its heart, not sitting on the side-lines. Leading not pleading.
But Brexit is deeper and bigger than our relationship with the EU. We will never get past Brexit if we don’t understand why – when asked – so many millions said they wanted change. The people didn’t just speak. They shouted. Millions told us that the current political and economic system isn’t working. And they are right about that.
The status quo is bust. Inequality and injustice are everywhere. We need a fundamental shift in power, and wealth, and opportunity. That’s why our 2017 manifesto was so popular. We must build on it.
Only a Labour government will end child poverty. Only a Labour government will confront the moral disgrace of homelessness. Only a Labour government will transform our economy to end insecure work – raise wages – and create good new jobs across the country. Only a Labour government will tackle the climate emergency, so we can look at the next generation in the eye and say ‘we did not let you down’.
Conference, the Tories have failed: they’ve wrecked our economy, public services, and welfare state. They’ve wrecked our international reputation. Their time is up.
We have to beat them, and we will. We have to defeat Johnson, and we shall. And defeat his politics, to show that decency can triumph. We have to deliver a radical Labour government and give the people the final say on whether we Remain in the EU.
Let’s get on with it!
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Gordon Brown, writing in the Observer, is the latest in a long line of Remainiacs to try and blame a bad thing, in this case Scottish independence, on a WTO Brexit.
I can’t be certain if Gordon Brown simply does not understand what is going on in Scotland, or perhaps he is in denial, or is just stupid. Whichever it is, a reality check is now due.
The truth is, a key driver for Scots voting intentions is not Brexit, it is the Iraq war. Previously unpublished polling lays bare the impact of Labour’s disastrous war in Iraq on both the Scottish Labour and the British political establishment. The poll was conducted by BMG Research with a sample of 1,041 Scottish voters aged 16 plus, between 31st March and 5thApril 2017.
The poll asked the question: “Thinking about past elections since the war (i.e. since 2003), did the decision to take military action in Iraq influence how you have voted since. Are you more likely, or less likely, to vote for the Labour party because of the Iraq War?”
- Overall the poll shows that 32 percent of all Scottish voters said they were less likely to vote Labour because of the Iraq war, with 2 percent saying it made them more likely.
- 41 percent of respondents said that the war was not a factor in their decision on how to vote while 10 percent had not voted since and 14 percent were not sure if the war was a factor.
- For voters aged 16-24, 34 percent said they were less likely to vote Labour. Notably, just 21 percent said the war was not an important factor in deciding how to vote and 18 percent had not voted.
The data for younger voters, who would have been infants at the time, is particularly notable. It seems the war has had, and will continue to have, a significant impact on Scottish Labour for years and possibly even decades to come.
Blair & Brown – The SNP’s Chief Recruiting Officers
In the 2007 Scottish parliamentary elections, Scottish Labour lost to the SNP by just one seat. In the 2015 General Election (GE), Labour held just a single seat in Scotland.
The 2015 GE polling data highlights the scale of the impact:
- Almost 1 in 3 Scots, approx. 1,250,000, said they were less likely to vote Labour because of the war.
- 47 percent of SNP voters, approx. 680,000, said that the war made them less likely to vote Labour.
- Of those that did not vote, 24 percent said they were less likely to vote Labour because of the war. These are all big, big numbers.
The Iraqi war not only impacts which party Scots vote for, but also if voters stay at home. The Iraq war has been a disaster for Scottish Labour.
Iraq And Scottish Independence
The poll also looked at the 2014 Scottish Independence referendum. Overall, 44 percent of “Yes” voters said they were less likely to vote Labour compared with 28 percent of “No” voters who said they were less likely to vote Labour. This gives a spread of 16 percent between “Yes” and “No” voters, highlighting a bias of those unlikely to vote Labour because of the war to vote “Yes” – for Scottish independence. The Iraq war has boosted support for Scottish independence.
Iraq And Brexit
In the 2016 EU referendum, 37 percent of “remain” voters said they were less likely to vote Labour compared with 31 percent of “leave” voters, giving a spread of 6 percent. The EU/Independence referendum cross-breaks, however, provides the most significant data. A full 51 percent of “Yes”/”remain” voters are less likely to vote Labour because of the war. Of those Scots that want to break-away from the UK but remain in the EU (which did not take part in the initial invasion), 51 percent are less likely to vote Labour because of the Iraq war.
The View From The Door Step
From doorstep conversations going as far back as 2004, I knew many Scots were not only unhappy with the Labour party, and were less likely to vote Labour as a consequence, but they were also unhappy with the British political establishment. Voters will consider various factors, including Iraq, before casting their vote. This is why I commissioned the poll, to get a national picture and what a sad picture it is.
The Iraq war has caused voters to abandon Scottish Labour in droves in favour of the SNP. It has damaged our union, fuelled Scottish nationalism and increased support for the EU. How any politician could miss the “Iraq factor” in Scottish politics is beyond me. Yet, here we have a former Labour PM trying to blame it all on a WTO Brexit. Gordon Brown and Scottish Labour have been wandering the political wilderness for years. If this is their standard of debate, I would suggest that is the best place for them.
Regarding comments from former Prime Ministers Sir John Major and Theresa May, it is understandable to an extent that they are not au fait with the nuances of Scottish politics. The leader of the Scottish Tories, Ruth Davidson has also echoed these concerns. To explain how she is so out of touch is somewhat harder to explain away. Sadly, I feel they are nothing more than a cabal of pro-EU, anti-democracy extremists peddling a “project fear” message that the union is at risk in a do-or-die attempt to prevent a WTO Brexit.
Worst of all, I fear Tony Blair’s legacy will not be Iraq, but an independent Scotland because of Iraq.
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First, the bad news. UK business investment in non-financial assets, which includes factories and machinery, has stalled since the vote to leave the EU in 2016. Indeed, investment has fallen outright in five of the last six quarters, and is now about 1½% lower than a year ago.
This is still not the ‘collapse’ that some would have us believe. The UK’s overall economic performance over the past year has also still been better than many of its peers. But it does make the UK an outlier in terms of capital spending. The level of business investment in the UK is roughly the same as it was three years ago, compared to typical increases of 10% in other major economies. If growth in investment here had kept pace with that elsewhere, our GDP might now be 1% higher.
Foreign Direct Investment (FDI) has also been softening. This is partly a global trend and there are still plenty of bright spots, such as the tech sector. But the UK has seen a relatively sharp fall in cross-border investment in new physical projects.
For once, there is little doubt about the cause. Numerous surveys show that both local and foreign businesses have been deterred from investing in the UK by the extended Brexit uncertainty. Given that their main concerns are about new barriers to trade, it is no surprise that cross-border investment has been hit particularly hard.
Nonetheless, the current weakness of investment is not a good argument for cancelling Brexit altogether. For a start, it need not have been like this, if the negotiations had been handled better. Investment began to pick up again shortly after the referendum once firms had overcome the initial shock of the result, and as the warnings of an immediate recession were proved wrong. The high point in capital spending did not actually come until the end of 2017.
Since then, unfortunately, the needlessly prolonged and botched process of leaving the EU has led many firms to put spending back on hold. The mixed signals about the preparedness to leave without a deal – summed up in the Yellowhammer leaks – have only compounded this problem.
It would also be wrong to argue that the solution is to delay the departure from the EU even further. This would presumably require some combination of an early general election, another referendum, and a takeover by an interim government, perhaps led by Mr J Corbyn. This would surely prolong and increase the uncertainties over Brexit, and add others.
There are much better reasons to believe that investment will rebound once Brexit finally happens. There is plenty of evidence, such as EY’s UK Attractiveness Survey, that the UK remains the top destination for FDI in Europe, and that many firms have only ‘paused’ projects rather than cancelled them altogether. Similarly, London is still well ahead of other European cities in the Global Financial Centres Index (GFCI).
What’s more, even if the UK does leave on 31stOctober without a deal, many businesses would surely prefer the certainty of some short-term disruption, for which both sides will now be much better prepared, than continued dithering with no idea what happens next. As the Aston Martin CEO, Andy Palmer, succinctly put it, ‘I’d rather leave with No Deal than drag negotiations on’.
Of course, leaving on 31st October without a deal would not end all the uncertainty, especially about the long-term relationship between the UK and the EU. It is possible that, in a few areas, it might simply confirm some of the worries about the short-term impact, and provide certainty of a bad outcome. But even in these areas, businesses would finally know what they have to cope with, especially in terms of any new tariffs and red tape.
The investments that are currently only on hold will then gradually be restarted, just as in 2016 when the economy initially stalled, then accelerated again. This time the UK would actually be leaving the EU. But this also means that businesses will have even harder evidence that the nightmare scenarios – including those apocalyptic Yellowhammer headlines – are more ‘Project Fear’.
Leaving sooner rather than later would also allow the new administration under Boris Johnson to crack on with a broader package of measures to maintain – and enhance – the attractiveness of the UK as a place to do business. This should include additional investment in infrastructure, and tax cuts. And even if sterling fails to recover, the benefits of a more competitive currency will gradually outweigh the increase in the cost of imports.
Finally, there is already evidence that all this is more than just wishful thinking. For example, the July services PMI reported that ‘a number of survey respondents commented on improved sales to clients in external markets, helped by the weak sterling exchange rate against the euro and US dollar. Moreover, the latest survey indicated the fastest increase in new work from abroad since June 2018.’
And in the July manufacturing PMI, ‘manufacturers maintained a positive outlook in July. Over 46% expect output to be higher in one year’s time, compared to less than 10% forecasting contraction. Optimism was linked to new product launches, an expected rebound in export sales, strong order pipelines, reduced uncertainty following Brexit and improved infrastructure (including 5G networks)’.
In summary, Brexit uncertainty may mean that investment is down, but it is not out. Provided the UK now leaves as planned on 31st October, businesses who have been fearing the worst should soon start spending again.
If there is one tax cut that would show in totemic fashion that post Brexit Britain is truly ‘Open for Business’, it would be to cut Air Passenger Duty (APD). Since its introduction in 1994 by then Chancellor Ken Clarke, APD has increased by 680% for long haul flights and 160% for short haul at the same time that flight costs overall have fallen by 30% as a result of increased competition
amongst airlines. This has left the UK with the highest aviation taxes in Europe and the developed world, more than double Germany, the next highest in Europe.
We are competing in a global market for businesses and investors. As Brexit approaches the new Chancellor must look with urgency at the impact that APD has on creating a truly global Britain. Put simply, APD is not working. It places an unnecessary cost on passengers and prevents a large number of routes from being economically viable, particularly in our regional economies.
Aviation is crucial to our Brexit future beyond the EU. It is perverse that we are taxing planes and routes ‘out of the sky’ that we need to connect us to future trade opportunities. Research conducted for Airlines UK last year showed that APD prevented a significant number of routes from being financially viable. APD is causing the UK to miss out on new routes like Bristol to Dubai;
Edinburgh to Delhi; and Birmingham to Tel Aviv.
When my colleagues and I press ministers on this, they will often respond that passenger numbers have increased over the last few years so ‘what’s the problem’. Whilst this is true, it masks the real problem. In trade, ‘connectivity is king’. We lag behind our European neighbours in connectivity terms, with Germany having considerably more direct connectivity to China, Japan, South Korea and Brazil than the UK. This connectivity problem is also exacerbated by our regional airports losing routes, with Edinburgh Airport losing its valuable routes to the USA when Norwegian Airlines pulled the routes citing sky high APD as a key factor.
Over the last year, I have met with, and had representations from, airlines from across the world. The clear message from them is that APD is holding back our ability to connect our airports across the UK to the nations that we will need to be connected to for our global trading future. One international airline made clear to me that they want to add more connections into the UK but are
prevented from doing so by the additional cost of APD to their cost base.
The Government’s approach to Air Passenger Duty is motivated by one factor – cash. Air Passenger Duty brings in over £3 billion each year to the Treasury. But this approach is simplistic and self-defeating, with research showing that more tax revenue would be raised from other taxes than would be lost from its abolition. It is estimated that there would be a net £570 million in extra tax
receipts in the first fiscal year following abolition, and positive benefits through to 2022 that could add up to as much as £2 billion in additional tax receipts.
Aviation is a key driver of economic growth. Take for example the Emirates route from Newcastle to Dubai, which has helped grow trade between North East England and Australasia from £150 million in 2007 to over £360 million for 2015. Our post Brexit future needs more of these routes and APD is acting as block on airlines adding the routes that we desperately need.
APD is an out dated, exorbitant and perverse tax that is preventing us from having the connectivity that we need in a truly global Britain. The Chancellor has the opportunity to end this and give us the flying start to our post Brexit future by cutting APD by at least 50 per cent, I urge him to do so.
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Stopping Brexit is becoming a desperate game. It’s produced a manic inventiveness which is turning out more constitutional crap than thirty years of Liberal Party conferences.
Only the EU can impose “No Deal” by refusing to admit that Theresa May’s deal is as dead as May, so a new government means a new negotiation. Logically therefore Remainers should cart their flags and whinges off to Brussels. They don’t, because their aim is to weaken Britain’s negotiating position, even though that’s the quickest way get the no-deal they deplore.
Which is why they’re trundling every past Prime Minister out of the museum to denounce Brexit as a disaster greater than any they created. It’s also why they’ve begun a desperate search for devices to lock Boris Johnson into a constitutional straightjacket. When they were in power they didn’t mind that Britain has no constitution because it left them free to do what they wanted. Now that Johnson is boss, they’re inventing a constitution to stop him doing what the people want.
This drags the Queen into politics by asking her to use a power she hasn’t got to eject her no-deal government and install an unelected government of National Unity though they can’t say who’ll run it. Can’t be the leader of the opposition. He’s not reliable. How about Margaret Beckett, a reformed ex Brexiteer? Or young Jo Swinson. She wants to be Prime Minister and won’t need parking for her caravan in Downing St, or much accomodation for her MPs.
They call on Parliament to do a job it hasn’t got, by governing instead of the Government. They think Speaker John Bercow will be Euro-daft enough to get Parliament to delay D Day or reverse the vote to implement Article 50. Or both. The Commons can’t do that but our DIY constitutionalists work by Brussels rules not British. So it can.
Then a confidence vote to stop Johnson, though if it’s passed, the Queen would have to ask Jeremy Corbyn. They don’t want that so there would have to be an election. Labour doesn’t really want that because in its present state it would lose. So it’s now calling for a people’s vote, though it can’t say when. Or what on.
To get out of that, Labour’s now written to the Cabinet Secretary to ask him to tell Johnson not to be naughty. When that doesn’t work (as it won’t) Corbyn will be forced to call a vote, which he’ll lose for the same reason that prevents any Government of National Disunity.
Uniting Remainers is as impossible as getting Donald Trump to shut up. The daring Change Party fell apart in weeks. Ms Lucas’s Ladies Against Leaving Cabinet will never untwist its knickers. So bringing senior politicians together cross party would be like packing pit bulls in a sack. The SNP and Labour are deadly enemies in Scotland and (pace John McDonnell) any attempt to conciliate the SNP weakens Scottish Labour, ruling out any possibility of a Labour national majority. So in a vote the few sensible Labour MPs will abstain. Most will hold their noses and vote. The Tories will pull together, desperate to retain power, which is the point at issue in a confidence vote.
McDonnell will then have to cancel the taxi to take Corbyn to the Palace and Johnson will be free to call an election when and if he wants one. He can even win that. Electors tend to prefer a party with clear policies and an impetus. Only Johnson has both.
That’s why people who’ve denounced austerity for years now claim that turning on the money spiggots as Johnson has done is dangerous lunacy, i.e.it might help him win where people should be kept miserable so they’ll blame it on Brexit. Everything Johnson has done or proposed, however useful, must be rubbished and Dominic Cummings denounced as a malevolent Machiavelli controlling Johnson’s brain.
All this is played out just when Johnson and the EU are locked in a high stakes game of bluff. So in undermining Johnson to ensure that Britain fails, Remainers weaken Britain and help the EU they’re so keen on, (Let’s Make Europe Great Again) to inflict as much damage as it can on Britain. Not exactly a popular approach in a nation that voted to come out.
They’re doing it because they’re desperate and that makes them anxious to rewrite a constitution we haven’t got. It’s so crazy that I’m writing a new guide “Creating a Constitution to keep the British People in their Box” – should have an enormous sale in Brussels. Perhaps I’ll even beat Dominic Grieve for the Juncker prize: a model of the Brussels boy pissing on the people.
As the preparations for the United Kingdom to leave the European Union begin to intensify, there has been a significant increase in attention given to its future international trade and investment policy.
It is almost inevitable that Brexit will lead to a marked change to the UK’s current approach to international trade and investment, with the government having an exciting opportunity to construct an independent set of policies.
In a new pamphlet written by Eamonn Ives, a researcher here at the Centre for Policy Studies, we demonstrate the opportunity that Brexit will bring to the all too often-neglected regions in the UK, through international trade and foreign direct investment (FDI).
The UK is one of the most active trading economies in the world in terms of the value of the goods and services it imports and exports. But trade does not occur equally across the whole of the UK. London and the South East dominate both the value of goods and services exported and the number of exporting business by region.
The charts below display this imbalance between London and the South East and the rest of the UK. The two regions account for more than 43 per cent of the UK’s total exports, equating to a disproportionate amount per capita compared to the rest of the UK. Moreover, there is a huge export gap between the two regions and the rest of the UK with them accounting for 43 per cent of all British businesses who sell products abroad.
This is a very real opportunity for the UK to redistribute wealth –and perhaps more importantly industry – within the country.
Value of goods and services exports by UK region
Number of exporting businesses by region (2017)
The disparity between London and the South East extends to Foreign Direct Investment. Since the Department for International Trade began accumulating figures on FDI, these two regions attracted over half of all new FDI projects.
Inward FDI by Region (2015-2018)
Whilst much of this dominance is down to the strength and size of these regions, the government can and must do more to redress this imbalance through a series of pro-market policies. This will increase the overall productivity of the UK, bringing the too often neglected areas up to the level enjoyed by places such as London. This is in stark contrast to the philosophy of the Left, which appears to many to create equality of misery.
As a member of the EU, the UK has been restricted by the need to adhere to a trade policy heavily shaped by rules and regulations from Brussels. Upon leaving the EU, we recommend that the government take the new and inspiring opportunities available and promotes truly open and flexible fair trade.
This needs to take a two-pronged approach. Firstly, through the maintenance of pre-existing free trade deals and preferential agreements that the UK currently enjoys as part of the EU. Since the vote in 2016 the Government has been negotiating with countries such as Israel, Chile and Switzerland to keep existing preferential agreements in place after 31st October. Yet despite this, only 5 of the 29 have been agreed, highlighting the need for the Government to focus on retaining these deals.
Secondly, the UK needs to negotiate new preferential trade agreements with other economies, focusing on the largest economies and emerging ones alike. The CPS has been championing the relationship between Britain and America, as shown in the Margaret Thatcher Conference on this topic earlier this week. This is one of the most crucial relationships post-Brexit and the benefits of getting this right will be felt by every corner of the UK.
Additionally, the CPS has long championed the establishment of free ports in the UK – publishing the seminal paper on the topic by Rishi Sunak MP. Free ports are areas that exist within the geographic boundary of a country but are considered outside of the country for customs purposes. The crux of this is goods are able to enter and exit the free port without facing any import procedures or tariffs. Leaving the EU Customs Union and Single Market, would allow the UK to establish such free ports, something currently prohibited by EU membership, in many of the poorer areas in the UK, creating jobs and fuelling the regional economy. This is a huge opportunity for our country.
Our third recommendation is the establishment of opportunity zones, with the aim of boosting investment to the most economically distressed areas. As with free ports, these are geographic areas which confer tax incentives to encourage individuals to reinvest and retain capital gains within them. The result of this would be an increase in investment in the regions that need it the most, helping to recompense the disparity between them and London and the South East.
The recommendations highlighted in this article are just a handful of our suggestions. We also advocate liberalising immigration policy, reforming regulations to boost export finance and simplifying the administrative procedures face by existing or potential exporters.
When the UK ratifies leaving the EU on 31st October 2019, the nation will have an opportunity like no other in the past 40 years to create its own independent trade policy. Although this will not come without risks, by adopting some of our policies outlines, we are confident that the UK can rebalance the economic disparity across its regions and improve opportunity for all.
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Back in 2016 17.4 million voted to leave the EU. They did so because they believed in Britain. They believed in our future as an independent nation state able to govern our own affairs and choose our future. They chose to take back control of our laws, money, borders and trade.
In the referendum campaign it was clear that leaving meant just that. Leaving. Not keeping bits of the EU. Not keeping the Customs Union, the Single Market or other bits. For if we stay in the Customs Union, our trade policy would continue to be made in Brussels, not Britain. To stay in the Single Market would be to allow the EU to continue to control many of our laws. We all want a deal but that deal must respect the referendum and make sure we do a proper job of leaving the EU.
Instead Parliament has been gridlocked over Brexit for months. The opinion polls seem clear that not leaving at the end of March was damaging for trust in our democracy. The European Elections being held is the final straw with voters having practically given up on the mainstream political parties.
After weeks of fruitless talks with the Labour Party, the Prime Minister has unveiled her “new and bold” Brexit deal. The government is trying – for a fourth time – to get it through the Commons. Yet it is worse than the last deal. Most concerning of all is that allowing this bill to proceed past second reading would risk it being a vehicle for remaining in the EU’s Customs Union and a second referendum. That is simply not a risk we can take.
Running right through the heart of the deal is the backstop – a mechanism, conjured up by Brussels, to trap us under its thumb, tying us to its rules and regulations so that we would not be able to conduct trade deals with the rest of the world. Millions of voters wanted to escape the EU precisely so that we could be free to engage constructively with the fastest growing economies in the world.
The crypto Customs union that is the Backstop would trap us indefinitely. We could only leave if the EU gave us permission to do so. It would be unprecedented for a self-governing country, by virtue of signing an international treaty, to be bound to the rules of an international body over which it has no say. Yet this is precisely the effect of the backstop.
The backstop would turn the UK into a satellite state whilst also posing a grave risk to the Union between Great Britain and Northern Ireland. It would do irreversible damage to the constitution of our great nation. And it is unacceptable to our coalition partners in the DUP.
If the stars align and we manage to agree a trade deal with the EU in a timely fashion after we leave, there will be no need for a backstop. Yet with the Backstop that would be wholly within the gift of Brussels and unlikely to happen. The better plan is to ditch the backstop and offer the EU a comprehensive free trade deal
Moreover, this deal hands over £39bn of our money, before the trade talks even begin. It contains a smorgasbord of options which the “remain and reform” Labour Party will exploit to reverse the referendum result – including the possibility of a second referendum which was ruled out by the 2017 Conservative Manifesto. This deal even puts the Single Market, revoking Article 50 and cancelling Brexit altogether firmly back on the table. These are not options that can be supported and the risk is too high to take.
I supported the Prime Minister in March as I thought that was our last best chance to leave the EU. Yet this deal is worse and the risks of this bill are too high for it to be supportable.
Countless opportunities await this country when it commits to delivering the historic referendum result in full. To truly transform our country into a great, self-governing democracy, allowing us to determine our own rules, control our borders, choose how we spend our own money and to end the jurisdiction of the European Court of Justice. Sadly this deal of the PM’s cannot achieve that. I will read the whole bill cover to cover but expect the small print to prove to me that I just cannot support it.
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Why is it that so many people seem to be inconsolably pessimistic about this country’s future?
Undoubtedly for some, Britain’s exit from the European Union is of great concern, especially those who have been unable to reconcile themselves to the democratic will expressed in the 2016 referendum. They seem to believe that Britain cannot have an optimistic, prosperous and secure future without being subsumed into the supranational entity that the EU represents.
Others believe that the era of globalisation may not work for us or that the challenge of rapidly changing technology is a threat to the social stability and economic predictability that we have taken for granted for many years.
What is this Britain that the pessimists describe or fear? Are we retreating from the world stage, abdicating our international influence or embracing protectionist concepts of economic nationalism? No, we are not.
We are not surrendering our permanent seat on the UN Security Council or leaving the G7 or G20. We are at the very heart of NATO. We remain in the Organization for Security and Cooperation in Europe, the OECD, the World Trade Organization, the International Monetary Fund and the World Bank. We are not abandoning the Commonwealth where we hold a pivotal influence. Our special relationship with the United States holds firm.
Not only do we support the WTO but we will soon take up our independent seat for the first time in over four decades. Yet still the voices of pessimism take on an almost “end of days” tone. Some may think it is irrelevant but I believe it matters because it damages us at home and abroad.
Not only do I believe such pessimism is unfounded and both defeatist and self-defeating, but I believe that there is every reason for the UK to be confident and optimistic about the future. Change is coming a-plenty but it is something we should embrace, not fear.
Let’s start with a reality check about the state of our economy and our comparative international performance. UK unemployment is at a 45-year low. Our rate of 3.9% compares with 7.9% for the Eurozone, 8.8% for France and 14.5% for Spain.
Last year, UK exports of goods and services rose to a new record of £634.1 billion; last year, Britain was the third top global destination and the top European destination for foreign direct investment. As long as we maintain an open, liberal, market economy with relatively benign tax and regulatory environments, our economic fundamentals will remain strong and our country an attractive one. That is why issues such as Brexit are not nearly so worrying to investors as the potential election of a hard Left, anti-wealth, high borrowing and irresponsibly spending Labour government.
The automotive industry is changing in ways that are transforming our understanding of mobility. These changes are facilitated by new technology and driven by consumer demands for a mobility experience that is connected, automated and sustainable. British companies have developed new technical capabilities in the UK automotive supply chain management and many are looking to continental supply chains for growth.
Our tech-based export and investment has proven most resilient to the dampening effects of Brexit and the UK tech ecosystem equips us to play a leading role in the 5G world. 5G will lead to a boom in data use and data use intensity correlates directly with per capita GDP growth. In Europe, the UK is leading the way with substantial investment in 5G testbeds and an extensive network of catapult centres bring industry and academia together to address problems at scale.
All of these things matter because they are an antidote to the corrosive pessimism that masquerades for some as a narrative of contemporary Britain. The examples that I have given represent empirical data rather than downbeat propaganda. There is a world beyond Europe and there will be a time beyond Brexit and we must be ready to face the challenges, accept the challenges and reap the rewards that the coming year will bring.
The lesson from the natural world is that adaptation is necessary for survival. We have the talent, the ingenuity and the experience as an outward-looking nation to navigate the fourth Industrial Revolution as well as, if not better than, many of our competitor nations.
The above is an edited extract from a speech delivered to Politeia.
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