Brexit gives us a chance to become a modern, outward-looking, free-trading nation once again.
17.4 million people asked the political class to take back control over our trade policy so that we could trade freely with other countries, determine our own trade policy and develop our industries and ports so that we can open our country to the world.
Whilst we must do everything we can to move seamlessly to a new trading relationship with our friends and allies in Europe after we leave, we should recognise that we have been guilty in the past of placing far too much emphasis on our relationship with the EU’s Single Market.
The report released yesterday by Global Britain – How the EU is a drag on UK prosperity economy – makes bleak reading and shows that the Single Market has never been central to UK prosperity.
The EU institutions are so focused on their political vanity projects, such as the euro, that they’ve forgotten why they were created in the first place: to look after the needs of the citizens and businesses of Europe.
The EU is failing the countries of Europe. Before the Single Market was formed in the early 1990s, the US and Eurozone each accounted for around a quarter of the global economy. Today, America’s proportion has largely remained untouched but the EU’s share of the world economy has almost halved. Had the Eurozone continued to grow at the same rate as the US the UK could have expected to have sold £82bn more in exports due to greater economic demand.
Unemployment is rife in the EU as well. Levels of unemployment are five times higher than ours in Greece, almost four times higher in Spain, more than double in France and over 17 per cent in much of the south of Italy. More than one in every three young Italians and Spaniards find themselves without a job and youth unemployment stands at a devastating 44 per cent in Greece.
Countries outside the EU will account for 90 per cent of global economic growth in the years ahead and Brexit will give us control over our trade policy so that we can adapt quickly, engage with the emerging global economic powerhouses and prioritise the interests of British consumers and businesses.
We will, at last, be able to look beyond the shores of the EU: to forge a free trade deal with countries like the US and to take up Japan’s invitation to join the Trans-Pacific Partnership. The Trans-Pacific Partnership would link us to our Commonwealth partners and we would be the only non-Pacific country with preferential access to this huge market.
This doesn’t mean that we will be turning our backs on our close trading partners in Europe. We will continue to trade with, protect and work closely with our friends in Europe – but we shall do this as a sovereign nation, championing free trade around the world.
By unshackling ourselves from an organisation that is more concerned about super-state status than economic competence, there are no limits to what our country is capable of. And we can re-focus on raising the living standards and future opportunities of many generations to come.
The post Brexit will allow us to focus our trading energy on emerging global economic powerhouses appeared first on BrexitCentral.
Those campaigning to reverse the EU referendum result talk of the EU as if it is the very basis of British and European prosperity. When viewed against the evidence, such an analysis is simply untenable. A new report from Global Britain, £82bn reasons the EU held back the UK, shows how.
Almost every aspect of the EU’s economic performance – not least UK trade with it – has been dismal, underperforming regularly against every corner of the globe – be it advanced or developing nations – for a very long period of time.
For many countries across the European continent, EU-induced policy – primarily designed to hold the euro together – has directly led to economic hardship, socially damaging levels of unemployment and a questioning of the very fabric of their societies. The result has been a rise in more radical politics and people leaving their countries of birth to seek better economic opportunity elsewhere. This is the antithesis of what the EU was founded to achieve.
The failure of EU economic policy has not only impacted EU nations but also cost the UK £82bn over the twenty years to 2017 due to lost economic opportunity, as weak demand has impacted negatively on UK exports to the Eurozone.
To understand the failure of the Eurozone, we need to go back to a time when it did not yet exist. In 1994 the economies of the US and the future Eurozone were of broadly similar size – worth 24.9% and 24.5% of global GDP respectively. Today the US economy is 30% larger than the Eurozone. Simply put, had the Eurozone grown at the same rate as the US, the UK could have expected to have sold £82bn more in exports due to greater economic demand. The unfortunate truth is that EU economic performance has been the global laggard over the short and long term.
By comparison, since the financial crisis, the UK economy has outperformed all the major EU economies including Germany. Overall it has grown 19% over that period compared with a 13% rise in the Eurozone. That 6% differential is worth £120bn, or to illustrate what that sum represents, just less than the entire NHS budget.
For the British people, the beneficial result of the country’s performance has been more jobs. The UK has materially outperformed the EU in both job creation and reduction of unemployment. UK unemployment is at its lowest level since 1974. French unemployment is 2.5 times the UK level, Spain 4 times and Greece 5 times higher. Since the EU referendum, 750,000 more people are in work in the UK. This contrasts with HM Treasury forecast of 500,000 job losses following a Leave vote – meaning its prediction was an embarrassing 1.2 million out.
Despite misplaced criticisms, job growth has been across the board and not just in the ‘gig economy’. More people work in manufacturing, construction, utilities, IT, health, education and the arts sectors than before the referendum. UK wage growth has started to pick up too and is growing in real terms, while the UK’s minimum wage is the second most generous in the EU.
The underperformance of the Eurozone can be laid firmly at the EU’s own door. Fundamentally, the Eurozone is not an optimal currency area; it lacks fiscal transfers and is weakly controlled with no central Treasury. The structural weakness and disequilibrium of the euro has led to sub-optimal firefighting policy choices to prop the currency up. The lack of political will and democratic accountability make it near impossible to rectify its flaws. These are structural issues that will not be easily rectified, leading to continuing divergent performance, socially damaging unemployment levels in the south and a loss of competitiveness. The problem is the euro’s construction and there is no easy fix. Underperformance is baked in.
Imbalances are growing, not reducing, be they employment levels, migration trends, fiscal strength, competitiveness and Target2 liabilities (intra-country balances).
The big myth remains that the Single Market is central to UK prosperity. It is not. Over the last 20 years, UK trade has grown 12 times with China, 3.1 times with the rest of the world ex-EU, 2.6 times with the US and just 2 times with the EU. Moreover, the UK trades with a modest surplus with the world ex-EU but has a £96bn deficit with the EU. Does it not strike you odd that UK trade not only is growing faster where it trades generally under WTO rules rather than within the EU Single Market – and is in surplus, not enduring a huge deficit?
EU citizens are voting with their feet. An estimated 3.5 million have moved to the UK over the last 20 years. Economic failure has directly led to widespread migration away from Italy, Spain, Portugal and most of Eastern Europe. People follow the opportunity and it has generally not been in the Eurozone. Again, despite claims, net EU migration has remained positive to the UK since the EU referendum.
The EU’s problems are structural and not cyclical. They are largely self-inflicted. The euro’s structure is the root cause of the problem, together with increasingly costly one-size-fits-all regulation that simply does not work for such a disparate Union. The price of preserving the euro is likely to continue to lead to low growth and poor employment prospects. Italy, as an example, has a smaller economy than 15 years ago. Such dreadful performance is fuelling economic and political dissatisfaction in Italy itself and across the EU.
The question should be: why can our policy makers not see that while we must remain friends with our European neighbours, the EU project has failed Europe? The answer is for Britain is to re-emerge as a true global trading nation.
The post EU economic policy has held the UK back and cost us £82 billion over two decades appeared first on BrexitCentral.
Labour’s autumn political broadcast Our Town told viewers “we lost control” and “we’ve been sold short by a political and economic system that has been unchallenged for far too long.” Labour’s bait-and-switch broadcast was a clear attempt to reconnect with blue-collar Leavers in marginal English seats.
Yet these voters are amongst those most alienated by Labour as it cartwheels over the horizon to the left, turns its back on 70% of all Labour constituencies and elopes with the elitist ‘People’s Vote’ campaign.
Indeed the neglect of Labour’s Eurosceptic tradition shows the party has left its erstwhile working-class supporters behind.
Activists at Labour’s Annual Conference in Liverpool who agitated for a ‘People’s Vote’ seemed oblivious to their party’s history of opposition to the European Project.
The first post-war Labour government opposed participation in the European Coal and Steel Community. Labour Foreign Secretary Ernest Bevin said: “If you open that Pandora’s Box you never know what Trojan Horses will jump out.” Labour Deputy Prime Minister Herbert Morrison said of the Community: “It is no good, the Durham miners will not wear it.”
Former Labour Prime Minister Clement Attlee summed up Labour’s antipathy to ‘ever closer union’ when he observed: “The idea of a politically integrated Europe is historically looking backward… We have always looked outward, out to the new world, and to Asia and Africa.”
Attlee’s successor Hugh Gaitskell told the 1962 Labour Party Conference the aim of the founding fathers was “federation” and “if we go into this, we are no more than a state, as it were, in the United States of Europe, such as Texas or California.” This meant “the end of Britain as an independent nation state” and the “end of a thousand years of history”.
Tony Benn called for a referendum on entry in 1970 and wrote to his constituents: “It would be a very curious thing to try to take Britain into a new political entity… by a process that implied that the British public were unfit to see its historic importance for themselves.”
Harold Wilson was forced to seek a renegotiation of Britain’s Community membership and called the European Communities Referendum of 1975. The Parliamentary Labour Party had previously voted against joining. Labour’s Conference had split two-to-one against the Common Market. Seven Cabinet members campaigned as ‘Antis’ and Wilson’s wife Mary voted out.
And under Michael Foot, Labour advocated leaving the Common Market without a referendum, a policy that subsequently became a manifesto pledge.
Fast forward to the present and the Sunday Times reported recently that Labour Shadow Chancellor John McDonnell, Member of Parliament for 58% Leave-supporting Hayes and Harlington, had held secret talks with the ‘People’s Vote’ campaign and has hosted Alastair Campbell and ‘People’s Vote’ Communications Director Tom Baldwin in his House of Commons office.
National director of Momentum Laura Parker attended a rally in November in support of a second referendum.
Then The Times discovered a motion that is being circulated among Constituency Labour Parties calling for a Special Conference with one motion on the agenda for a ‘People’s Vote’ with Remain as an option.
It is ironic that the Labour Party of Jeremy Corbyn is slowly moving towards their third-way Blairite doppelgängers on a second referendum.
Then again, why wouldn’t they? They are equally worlds apart from these totemic figures of post-war Labour history in having no attachment to parliamentary sovereignty and little real connection to Britain’s working-class communities.
Labour is now a very different party from what it once was. The very notion of Labour as a party for blue-collar voters is a social, cultural and electoral anachronism.
Firstly, when Labour talks about “Our Town” it doesn’t really have in mind the sociology of Leave-voting Macclesfield or Middlesbrough South and East Cleveland. Labour’s imaginary ‘town’ is the parallel universe of ‘high status city dwellers’ and faux left opinion formers living in metropolitan London.
Labour is politically dependent on the metropolis. In the six months following Corbyn’s election as Labour leader, 81,000 Londoners joined his party, double Labour’s total membership in Wales. Corbyn, Starmer, Thornberry and McDonnell all sit for London constituencies (two in the London Borough of Islington alone).
They share the same geographically narrow worldview as that of Stronger In whose four principle staffers grew up in London within two square miles of each other. Two went to the same school. One was the son of a Labour Home Secretary and another was Lord Mandelson’s Godchild.
And whereas in the 1970s less than a third of Labour MPs were graduates, now 90% are. When the mask slips, it reveals a prejudice about working-class Leave voters such as when Huddersfield’s Labour MP Barry Sheerman claimed “better educated people” voted Remain and when Owen Jones talks about ‘gammons’.
Secondly, Corbyn’s bien pensant ‘Global Villager’ values don’t resonate in the Brexitlands of Wales, the Midlands and the North. Harold Wilson told Bernard Donoghue: “I don’t want too many of these Guardianisms. I want my speeches always to include what working people are concerned with.”
Yet the modern left’s disillusionment with the workers has become a post-Brexit antipathy. The social democracy of earlier generations has given way to identity politics, a political style that increasingly inflects the voice of Continuity Remain.
Consequently, the pro-EU left can’t understand blue-collar political interest in sovereignty and democratic oversight of our laws, borders, trade and money.
Thirdly, the ‘peak Corbyn’ electoral coalition was beaten by the Conservatives in C2DE vote share, prompting the New Statesman to write of Labour’s middle-class populism: “the property tycoons of Chelsea must be congratulating themselves for having seen off a threat to their children’s inheritances.”
Former Vote Leave Co-Chair and former Labour MP Gisela Stuart did her party a service when she said Brexit was a “wake-up call” to Labour. But the party’s Remainist ‘People’s Vote’ tendency would re-empower the ‘lobbyists, multinationals and Brussels elites’ Labour Leavers voted to dispossess.
Indeed, according to the British Social Attitudes survey, before the Brexit victory, nearly one in two workers felt ‘people like them’ no longer had a voice in the national conversation and Brexit won in 140 heavily working-class and historically Labour districts.
Flirting with the elitist ‘People’s Vote’ is therefore potentially disastrous for many Labour MPs. A recent IQR survey for Global Britain of the 25 most marginal Labour seats found 19 Labour candidates would face defeat if Labour attempted to frustrate Brexit and 63% of voters said MP’s decisions in Parliament should respect the result.
Labour should heed the advice of UNISON General Secretary Dave Prentis who recently told Labour’s leadership to “never, ever forget your base.” Supporting a coup against five million or so of the party’s Leave voters would reinforce the perception that those who voted to take back control in the referendum would stand to lose the most control, in the political and cultural sense, from a Labour government that will only speak for Remoania.
Ironically, Labour’s Eurosceptic tradition was channelled by Vote Leave in its referendum broadcast featuring images of Clement Attlee and Nye Bevan in which voters were asked to “imagine our money being spent on out priorities”, which we could do if we voted to taken back control.
By contrast, Labour’s Our Town is part of the “give back control agenda” of a party that has long forgotten the people it was founded to represent.
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In my last BrexitCentral article, I posed the rather obvious question to the EU: “Would you rather have a no-deal-style Irish border with or without £39 billion?” That choice, which Brussels seems not to have understood, has now come into sharp focus and it seems now that the answer is likely to be presented to them as a fait accompli.
Aside from the niceties, the fundamental objection to Theresa May’s proposed deal is the potentially perpetual lock-in to a customs union. The “joint committee” means of course that it will be for the EU to decide when or whether we can leave. It is unheard of, and utterly unacceptable, for anyone (and certainly any country) to be potentially bound in perpetuity by an arrangement that they have no ability to terminate.
In the political declaration – i.e. informally – the EU says that the Irish backstop, separating Northern Ireland from the UK by remaining in the customs union and adhering to the EU rule book, might be avoidable by either a technological solution or an appropriate trade deal. But it’s quite clear that the only trade deal that will satisfy them with respect to keeping the Irish border open is one that keeps the whole of the UK in the customs union. As a result, the UK would not be able to enter into global Free Trade Agreements (FTAs). That is precisely their desired outcome, so they are unlikely to show any enthusiasm for a MaxFac solution. At the same time, with £39 billion committed unconditionally, the UK will have absolutely no leverage.
We have no need to wait for proof of that. At the recent EU summit, Emmanuel Macron warned that if, in future talks, the UK is unwilling to make compromises over fishing, the negotiations for a wider trade deal could be slowed down, which could lead to the last-resort backstop plan coming into force.
So it follows, as night follows day, that we could be – if not forever then at least for many long years – in either a temporary or permanent customs union with the European Union. To avoid the Damocles sword of the backstop from destroying our negotiating position, we must decouple the Irish border issue from the trade negotiations. How to achieve that is by using no deal as the bridge to the arm’s length negotiation of the new relationship.
Parliament now seems very likely to reject the proposed deal. So in the absence of new legislation, therefore, we will leave on 29th March 2019 with no deal (as explained by Stewart Jackson on BrexitCentral here). So what are the implications of that?
EU short-term trade: We would have to trade with the EU on WTO terms until a free trade deal can be agreed with them. This is undesirable but not catastrophic. 39.3% of UK imports and 33.1% of exports are conducted under WTO rules with non-EU countries. Most countries in the world (111 out of 195) trade with the EU under WTO rules, including China, India, Russia, the United States and Singapore. Despite tariff and non-tariff barriers, Britain’s trade with non-EU countries is in surplus and growing, while our trade with the EU is in deficit and shrinking.
If the EU imposes a 10% tariff on our exports and we tax their imports into the UK at 10%, prices go up to the extent that not offset by significantly lower world prices than EU prices for food and commodities. 10% tariff provides a revenue boost to HMRC, to be spent to our benefit. Exports are harder but offset by a fall in sterling that boosts exports while making imports more costly – no bad thing to help rectify our appalling adverse EU balance of trade.
Meantime, domestically, the UK can think about diverging from some EU regulations. Clearly, businesses exporting to the EU will have to comply with EU product standards and trading terms but the burden of those standards need not necessarily be imposed in the 94% of businesses, representing 88% of GDP, that trade only domestically or with non-EU countries. (CETA clearly does not require Canada to impose all 100,000 pages of EU rules and regulations upon every Canadian business.)
EU long-term trade: Michel Barnier himself said, in his speech announcing the deal, that agreeing a free trade deal with the UK should be much quicker and easier than FTAs with other countries as we start from a position of complete alignment. And we have in CETA, the EU/Canada FTA, a ready-made template for the trade agreement between the EU and the UK. That is not to say that the negotiations will be easy if, for example, the EU’s demands include full access to UK fisheries, which is why it is so vital that we can back up a tough stance with a £39 billion carrot.
Friction: Queues at Dover would be bad news but friction can be minimised, for example, by trusted-trader status for regular just-in-time supply-chain consignments and number-plate recognition that opens barriers automatically on designated trusted trader lanes etc. There are four months to take steps to increase capacity (a job that should have been started two years ago), for example by establishing an inland port and protected route to the seaport.
The recent paper published by Global Britain and the European Research Group, Fact – NOT Friction: Exploding the myths of leaving the Customs Union, shows that “fears are driven by a series of myths about how customs procedures work”.
Global trade with EU partners: Much capital is made of the fact that we currently benefit from EU FTAs that allow us to trade freely with more than 40 non-EU countries. This is true but they include places like Guernsey, Guadeloupe, San Marino, Büsingen am Hochrhein, the Falklands and South Georgia. The EU has trade agreements with only three of the UK’s principal trading partners – Switzerland, South Korea and Canada. People love to proclaim the fact that “a single trade deal can take years or decades to agree” with the clear implication that that is bad news. It is not. On the contrary, for countries with whom the EU has existing FTAs, it is fantastically good news. It stands to reason that, save to the extent that the parties wish to change anything, all that is needed is to copy the current FTA between the EU and that country, change the name of the contracting party and sign it.
New global FTAs: We would be able to negotiate and enter into global FTAs at the earliest opportunity. Very many countries have expressed a desire to do so – Australia, Argentina, Brazil, Canada, Chile, China… and I’m only up to the Cs.
Global trade before new FTAs: Meanwhile we will no longer have to impose the EU Common External Tariff on imports from the rest of the world: 15.7% on animal products, 35.4% on dairy products, 10.5% on fruit, vegetables and plants, 12.8% on cereals and preparations, 23.6% on sugars and confectionery. 19.6% on beverages and tobacco.
Non-trade issues: Many non-trade issues are addressed, directly or indirectly, by the 585-page draft Withdrawal Agreement: citizens’ rights, EU access to the City, defence and international affairs, aviation, Horizon 2020 etc etc. If the EU became obstructive over many of these, it could present severe problems. As the issues have, presumably, been agreed because they are to mutual advantage, it is hard to see why the EU would consider it to be to its benefit to behave aggressively (other than to prevent the UK from leaving).
The Irish border: As Andrew Lilico pointed out on BrexitCentral, the border between Northern Ireland and the Irish Republic has some 275 crossing points. The border separates regulatory, tax and legal regimes that are very different and is controlled via a combination of administrative cooperation, whistle-blowing, auditing, site raids by customs, tax and regulatory enforcement officials. There are – currently – occasional random spot-checks on roads leading up to and at the border, as well as cameras and other physical infrastructure at the border.
Lilico also noted some UK press discussion suggesting that the EU would impose stop-and-check controls at the border, like those between the EU and Turkey. Such an attempt is certainly possible, but seems highly unlikely because of the scale of the task (275 crossing points, more than all other land crossing points into the rest of the EU from other countries); and because the Irish Government claims that the EU has given undertakings that no such controls would be introduced; and because Ireland seems unlikely to allow them to be imposed, even if the EU so desired.
There has been much talk of technological solutions that will take years to develop but the European Research Group’s paper, The Border between Northern Ireland and the Republic of Ireland post-Brexit demonstrates how each of the issues can be addressed without the need for technology not yet invented. The Irish Government and others dismissed the paper immediately as “pure fantasy”, apparently because of concerns about ability, without either a hard border or ‘new technology’ (what kind of new technology?) to prevent smuggling or the import of non-compliant goods into the EU. At present, the Republic of Ireland physically inspects only 1% of imports, so 99% of contraband and non-compliant goods are already getting through!
Some 33% of Northern Ireland’s goods exports (all sales outside the UK) went to the Republic of Ireland in 2016 and were worth around £2.7 billion (€3.1 billion). The EU’s imports from the rest of the world amount to around €172 billion and the EU’s GDP was about $17,300 billion (€15,200 billion) in 2017. In the unlikely event that 25% of all goods transported across the Irish border was undetectable contraband or non-compliant goods (pretty unlikely that), this would represent 0.5% of all imports into the EU and 0.005% of EU GDP. But it wouldn’t be 25%, would it? Who is being fantastical here?
As the ERG paper says, “no border is 100% secure against smuggling. Smuggling takes place across EU borders in Eastern Europe and the Mediterranean. Moreover, it occurs at present across the border between Northern Ireland and the Republic of Ireland. Drugs, fuel, tobacco, cigarettes and other illegal goods have been smuggled across the Irish border since the 1920s but cross-border co-operation is already used to combat criminals. The PSNI, the Garda Síochána, customs authorities and law-enforcement agencies co-operate to counter this trade. Law-enforcement agencies on both sides of the border co-operate to suppress smuggling without anyone suggesting that border posts and checks would make their efforts more effective.” And there are better ways to identify non-compliant goods than by random 1% or 3% checks at the border.
The latest ERG paper, Your Right To Know – the case against the Government’s Brexit deal, extols the virtues of ‘A better alternative – a “Super Canada” Free Trade Deal’, but misses the point. Yes, Canada-plus would be a million times better than the Chequers plan and the currently proposed Withdrawal Agreement but it does not address the Irish border issue. Although Canada-plus has been offered several times by the EU, they offered it only in combination with the backstop of Northern Ireland being separated from the rest of the UK.
I would therefore say that the two things – the Irish border issue and UK/EU trade relationship – need to be decoupled. We should leave with no deal and confront the EU with the Irish border problem in March 2019.
Thereafter there will still be issues over the nature of the trade deal – whether it will be close to Canada-plus or will have to be more limiting because of the EU’s unwillingness to contemplate anything that might allow the UK to become competitive. We would need to weigh up the benefit of a UK/EU FTA based on a customs union and common rule book against the known drawbacks – EU regulations imposed on the 94% of UK businesses, representing 88% of GDP, that trade only domestically or with non-EU countries; no say in determining future regulations or trading standards; no ability to innovate; no ability to negotiate trading standards as part of FTAs; and maybe, if remaining in the customs union, no ability to enter into global FTAs at all.
By decoupling Irish border issue from UK/EU trade relationship, the Irish border will no longer be the overriding, determining factor. It will be for the UK to decide what is in its best interests, like the other 40 countries, large and small, that have entered into widely varying trade arrangements with the European Union
And £39 billion retained will, without doubt, focus the minds of those on the other side of the negotiating table – but the £20 billion or so of net contributions that they would have received during the two-year transition period will have been irrevocably lost.
We now learn that the Treasury predicts that the country will suffer £150bn in lost output over 15 years under no deal, with Theresa May’s plan costing in the region of £40bn.
This latest manifestation of Project Fear has to be the ultimate insult to the nation’s intelligence.
With or without Mrs May’s Withdrawal Agreement, we will have the ability, within 2 years or more, to conclude a free trade deal with the EU – without a shadow of doubt a far more favourable one if we are able to negotiate while holding out a £39 billion carrot and without the Damocles sword of the Northern Ireland backstop suspected over our heads. And, dependent on how closely we decide to tie ourselves to EU standards, the ability to conclude FTAs with other countries.
The only counteracting drawback of no-deal is the short-term damage (and, conceivably, any irrecoverable long-term damage) to UK/EU trade as a result of the short-term disruption arising from the loss of the transition period. But we’d start with a saving of £20 billion or more from net contributions to the EU over two or more years. And benefit from earlier freedom to deal with our fisheries and agriculture (and, and… need I go on?)
No doubt the Treasury will, as usual, refuse to disclose its ridiculously biased assumptions.
The post We must decouple the Irish border issue from UK/EU trading relationship appeared first on BrexitCentral.
New polling on the Withdrawal Agreement commissioned by Global Britain contains no good news for the Prime Minister. Not even a scintilla of Christmas cheer.
The headline result is that more people support what is known as “No Deal” than support her supposed deal with the European Union; but just as interesting is that support for leaving the EU – deal or no deal – is now greater than on the day of the referendum in 2016.
Yes, that’s right, those wishing to give the British people a further say could receive an even bigger slap in the face than the first time round. It almost makes it quite an attractive proposition – were it not such a divisive distraction that also feeds the dragon of a second Scottish independence referendum, so let’s not go there.
Let me run through the questions to bring most readers of BrexitCentral some morning smiles.
The first question asked: “Whether or not you agree that the only options open to the UK now are Theresa May’s deal, no deal or no Brexit, out of those options only, which would you prefer as the outcome for Britain’s negotiations with the EU?” The responses were 25% for Theresa May’s deal; 32% for No Deal 32%, and 41% for No Brexit with the UK staying in the EU, with 3% Don’t Knows.
When next asked to choose between Theresa May’s Deal or No Deal – and No Brexit– the responses hardened, delivering 57% for Leaving deal or no deal and 41% for No Brexit, with again 3% Don’t Knows.
When asked “To what extent do you believe that the draft Brexit deal Theresa May has agreed with the EU will result in a true Brexit, and to what extent to do you believe that it would result in the UK staying in the EU in all but name only?”, the responses were: 49% believing it is BRINO, 20% a neutral outcome, and 25% a true Brexit.
Respondents were then asked: “To what extent do you agree or disagree that the draft Brexit deal Theresa May has agreed with the EU represents what Leave voters believed they were voting for in the EU Referendum in 2016?”
The response was that 16% took a neutral view of neither one nor the other, 18% believed it did represent their expectations – but a significant 63% believed it did not.
This was followed by the question: “To what extent do you believe that the draft Brexit deal Theresa May has agreed with the EU respects the 2016 Referendum Result where Britain voted to leave the EU?”
Some 16% were neutral, 36% believed it did respect the 2016 referendum result and 46% – a majority of 10% – believed the deal does not respect the referendum result.
To the last question, “If your local MP supported the draft Brexit deal Theresa May has agreed with the EU, would this make you more or less likely to vote for them in a general election?”, the response was 20% more likely; 37% less likely; 42% no difference; and 2% don’t know. That’s a net 17% of voters who would be less likely to back an MP who supports the Withdrawal Agreement. Let me put that in context: even if about half of that figure were to be a swing against the Conservative general election vote of 43.5% – taking it down to 35% – the Conservative Party would lose 85 seats.
The telephone polling of 2,000 people – weighted by all the usual considerations – was carried out before the EU signed off the Withdrawal Agreement and said there could be no further changes but, importantly, after the general shape of the draft deal was known. With more detail now known and French and Spanish leaders demonstrating their desire to blackmail and humiliate the UK into providing further concessions on fishing, Gibraltar and financial services, I would expect the British public’s kick-back to grow as each day passes.
Although anecdotal, it was interesting to watch a BBC Newsnight clip on Wednesday where a local outside a Stoke City v. Derby County match was interviewed and admitted that although he voted Remain he was now thoroughly a Leaver – in reaction to the way that the EU had behaved towards his country and our negotiators. I do not think this attitude is isolated.
The Prime Minister said in her recent statement to Parliament that MPs in the House of Commons had a “duty to listen to their constituents before taking a decision in the national interest”. The Global Britain poll suggests that if MPs do indeed listen, they should vote against the Government.
The Withdrawal Agreement is not a deal at all, it is only the divorce settlement – but it keeps the marriage very much alive, and as more and more people realise it so it shall become more unpopular – and the Conservative Party along with it.
Polling of n=2000 respondents with a maximum margin of error of +/- 2.2 per cent at a 95 per cent confidence interval was conducted by IQ Research by telephone from 18th to 22nd November. Respondents were UK residents and eligible to vote in UK general elections with minimum quotas set by age, gender, region, education, occupation, tenure and ethnicity – and data weighted where necessary to ensure it is representative.
Photocredit: ©UK Parliament/Jessica Taylor
The post New polling shows the public kicking back against Theresa May’s Brexit deal appeared first on BrexitCentral.
I was pleased to attend the publication of Lord Lilley’s Fact – NOT Friction in London this week; an excellent, informative paper published jointly by the European Research Group and Global Britain explaining how there are widespread misconceptions about the costs and implications of not being in a customs union with the EU. I agree with him: these misconceptions have led the Government into the wrong negotiating strategy for Brexit.
In Rotterdam the week before last, I saw how transit documents procured in advance and lodged electronically allow veterinary goods from third countries all over the world outside the EU to move predictably and rapidly into the EU, and be cleared by their import declaration and any other checks necessary in commercial premises 40km behind the border.
The three essential documents to make this run are the export declaration; the transit document to get the goods through and behind the frontier; and the import declaration that can then clear the goods once inland.
Non-veterinary goods go deep into Europe under such documents and are cleared when the import declarations are made on arrival at customer warehouses or kept in bond for future clearance.
The cost of this whole customs process is around €25 per document or between 0.1 to 0.4 per cent of value for the average consignment value of €25k depending on whether a company gets a customs broker to procure some or all of the documents, (plus up to another 1 per cent for the veterinary inspections on veterinary goods, around a third of which could be subsidised by our government if it chose to do so, being the government vet fee).
The export declaration is fairly easy for companies to do themselves, but the transit document and import declarations take a bit more customs expertise. Specific border inspections for veterinary goods can take place in authorised commercial premises well away from the frontier itself, and from the perspective of their authorisation they just need access to adequate space and facilities, government vet availability, and reasonable off-site access to professional sample testing facilities.
These processes do not require the exporting country’s domestic regulations to be aligned with the EU. EU standards need to be met for imports in the same way that goods exported to the US need to meet US standards.
What they do require for borders to remain efficient is for the documents to be prepared in advance so that lorries do not need to be stopped before leaving because they can’t be guaranteed to get through the other side.
The costs involved were corroborated by a major Japanese car company operating in the UK which told us in our International Trade Committee a few weeks ago that they can run these documentary procedures in-house for about £30 per shipment of equivalent salary cost. Multinational firms such as these are already well used to the data and documentary requirements for sourcing components globally.
I also met roll-on roll-off ferry operators in Rotterdam who have Nissan’s UK operation as a major client, who are expanding capacity to meet demand for regular just-in-time shipments and are most focused on getting their customers, who are often the freight forwarders, geared up to ensure all arriving trailers have the right pre-cleared documents. They need them an hour in advance to be able to match up their port traffic management systems with the documents of the lorries they expect to arrive.
There is no reason why similar processes could not also be effected behind the border at Calais to keep the frontier flowing freely and shipments being cleared with predictable timing as in Rotterdam, and if the authorities there want to keep their business that is what they will end up doing.
We need to get our exporters and our exporting ports and service providers geared up to have their export and import declarations and the transit documents ready in the same way. That way just-in-time supply chains are not threatened.
Businesses need to be ready with processes for generating the data to lodge electronically. Dover, Folkestone and Calais need to adjust their port inventory management so as to reconcile their traffic bookings and manifests with the documents matching the shippers’ documents. At first this might have to be somewhat rudimentary because the authorities have left preparation so late, perhaps being done by hand and needing more advance notice; however more efficient modern systems could be introduced fairly quickly.
Investing in these logistics processes will be equally useful for trade, whether, as is my preferred option, we end up with a regular free trade agreement as offered by the EU in March (and the processes can be adapted to ensure no hard border in the island of Ireland too); whether we leave the EU at the end of next March without agreeing a Withdrawal Agreement; or whether we have an “orderly no deal” with side agreements in key areas like transport and licensing which can help the logistics industry, as the “no-deal” preparation the EU has set out suggests they want. The basic requirements for borders are the same, and are what businesses all around the world manage successfully with standard processes every day.
If we prepare in this way, we will be prepared, whether we are able to arrange zero tariff and zero quantitative restriction trade with the EU before or after the end of March next year.
It is worth considering the costs of these processes in the context of the rest of the transport supply chain. They are a very minor part of the cost of the overall shipping cost, which is often many hundreds of pounds for each of the inland transport legs, from premise to port, port to premise, and the ferry or rail crossing carrier cost.
At 0.3 to 1.4 per cent of average shipment value they are also only a tiny fraction of the 12 to 24 per cent non-tariff barrier costs that were assumed in the “Cross-Whitehall Briefing” leaked in February, which were the major factor in the Government’s negative economic forecasting of World Trade and FTA scenarios for our trade with the EU.
The Government has ill-advisedly been using these hugely over-negative estimates as the reason for its negotiating strategy of high regulatory alignment and “frictionless” trade with the EU, and this has landed it in its current mess. Ironically the outcome of that mess is the idea of the customs union “backstop”, which when you read the small print contains the more costly and completely antiquated requirement for physical paper forms inspected and stamped by customs officers, for every commercial shipment between the EU and Great Britain, and every shipment across the Irish Sea.
While there may be a few teething troubles with the above processes being implemented from the second quarter of next year, with the right application by authorities and businesses costs of such high scale shouldn’t eventuate, and in any event won’t persist for 15 years as Government assumes.
In particular the car industry should be able to adapt relatively easily, and rather than prejudice our independence by worrying about overestimated costs, we should focus on getting small- and medium-sized businesses ready, and improving general business conditions. Whatever the size of business, most just want certainty as to what they need to do, and that is of far more value right now than indefinite transition, more political argument and risk.
The perfectly normal customs processes I saw, available now, without new technology and under current EU law, should be the focus. Preparing them is a far better strategy than tilting at the windmills of a never-to-be practical “Facilitated Customs Arrangement”, suffering under the illusion that economic Armageddon is the alternative, and waking up to the reality of the EU being in control of our destiny.
The post The processes exist for life outside the EU’s Customs Union – we just need to prepare for them appeared first on BrexitCentral.
The eyes of the world are upon the British Parliament as we move ever closer to the date set for leaving the European Union. The Chequers proposal is a test of the trust that the British people decided to place in Parliament when voting to leave the EU. Either MPs will shun that trust by accepting the Chequers proposal or MPs will champion the national interest and the democratic mandate to leave the EU without a new deal.
The people consistently voted for a free and sovereign UK, both at the 2016 referendum and the 2017 general election, and politicians must be held to account for their commitment to leave the European Union.
In rejecting Britain’s membership of the EU, the people decided the UK’s policy. We need to put the decision behind us and the national interest ahead of us. The national interest is greater than any political party or special interest lobby group. The national interest and the outcome of Brexit is Britain’s place in the world on our own terms; it is the confidence, ambition, dynamism and agility which can once again be virtues of a global Britain.
Leaving the EU opens up the world to Britain, and opens up Britain to the world, beyond our immediate friends and neighbours across the Channel. It is for this reason that any deal, policy, treaty or political arrangement with the EU which comes into effect as we leave, must be commensurate with our standing as a sovereign nation on the world stage. This is why Chequers must be rejected. Chequers means EU control over Britain, as would remaining in the Single Market and Customs Union. Chequers does not mean Leave.
The Chequers common rule book compels the UK to comply with EU regulations without any say. Binding the UK to a Customs Union creates barriers for our businesses which grow by trading with other nations. And a continued period of uncertainty in ‘transition’ means the EU can impose its will upon the UK without an ability to stop them.
Tying the UK to EU Single Market rules defies economic sense and the best interests of UK business. Small and medium sized businesses cannot afford to lobby Brussels, though they can adapt quickly to maximise the benefits of business outside the EU. It is the large multinationals who make up the business groups who lobby to remain, despite the interests of UK business as a whole.
In seeking to placate the EU instead of working with them as an equal partner, the UK falls into the trap of the EU ideologues who will feel no shame in positioning Britain as a vassal state, warning other states of the punishment that awaits if they seek independence. The EU’s institutions are a natural concern to Brussels; the UK does not wish to harm those institutions – we simply see no future in them for us.
The British people voted to Leave without a new deal on the table, rejecting remaining in the EU with the empty deal that Prime Minister David Cameron had agreed. If there is a mandate for a new deal, it is for a free trade deal as outlined in Theresa May’s Lancaster House speech and the Conservative Party manifesto. Leaving the EU with a free trade deal is a worthy ambition, but we do not need a new deal before we leave, and we can thrive without one.
As the Government has no policy to leave the EU with a mutually beneficial free trade deal, politely ceasing negotiations and pursuing a Brexit without a new deal is in the national interest. Halting talks with Brussels would strengthen Parliament’s hand and taking control of our departure provides the people and our businesses certainty. We can govern ourselves once more and begin trading on WTO terms. There would be no more payments to the EU and the £39 billion promised to Brussels in exchange for a new deal would remain in our hands.
Michel Barnier is right about one thing: the clock is ticking. When the time comes will our MPs stand on the side of democracy by voting down the Chequers proposal? Or will our MPs lay down and let the EU machine trample on their principles, crush the unequivocal mandate from the people to leave the EU and destroy all trust in politics?
When the covers and scaffolds are removed from the House of Parliament, will it be repaired in all its glorious splendour, a beacon to the watching world, a shining example of representative parliamentary democracy? Or will the building be reduced in status to a museum to the democracy that was, the democracy that could have been, the looming statue of government failure and a symbol of political decline? As we restore the fabric of our Parliament, we must restore the institution it represents, the parliamentary institution in which the people put their trust in when they voted to leave the EU.
Few MPs knew when they first took their seats in Parliament that they would bear ultimate responsibility for the governing of our great nation; they were elected when so much power and responsibility resided outside of our shores in the many bodies of the EU in Brussels. Our MPs may not have expected such a responsibility; however, the people expect more from their MPs, more from Parliament, more from democracy, and in this the people show their confidence in the institutions, businesses and people of Britain. It is time for our MPs to take up that confidence and that trust, to seize the agenda that a truly global Britain can realise, and the benefits we can maximise outside the EU.
The country voted to Leave the EU with the largest democratic mandate in the history of our great nation. MPs must answer that call, trust in the people as they were trusted and reject the Chequers proposal. I urge MPs of all parties to accept that Britain will leave the EU on 29th March 2019, without a new deal with the EU, and start trading globally on WTO terms. Leaving on those terms means we have a new deal for the people of Britain; we will have control of our laws, our borders, our fishing waters, our taxes and our regulations.
The sooner Britain truly leaves the EU, the sooner Parliament can devote its efforts and attention to the challenges our country faces at home, challenges which we can solve together when Parliament is once again sovereign, when we are outside of EU control and free to prosper.
The post The people gave our politicians their instructions – now they need to obey them appeared first on BrexitCentral.
New polling by Global Britain conducted after the party conference season had finished confirms previous findings that the Prime Minister’s Chequers Plan is deeply unpopular and that either a No Deal/WTO option or a Canada-style trade deal are by far the most popular outcomes for Brexit.
In a telephone survey conducted by IQR for Global Britain between 8th and 10th October, voters continued to say that Brexit remained the most important issue facing the country, with 40% feeling this way, while healthcare received only 12% support and the economy just 9%. The importance of Brexit for Conservative voters was little different at 38%, above health (8%) and the economy (13%).
When asked what their preferred option was for Brexit, of those who expressed a preferred outcome, 26% opted for a Canada-style trade deal, rising to 33% amongst Conservative voters. The WTO option attracted 24% support (25% for Conservatives) and No Deal attracted 17% (17%). The Chequers Plan polled worst at 6% (with 9% for Conservatives) against 11% (10%) for a Norway-style EEA/EFTA membership and 15% (6%) for a second referendum on EU membership.
More details were then provided about the various scenarios and the questions asked again.
This time the ratings for the preferred options were 31% of voters chose a Canada-style trade deal (up 5%), rising to 35% amongst Conservative voters. The WTO option fell slightly to 22% support (24% for Conservatives) while No Deal rose to 21% (and 23%). The Chequers Plan still polled worst, falling to 4% (with 6% for Conservatives) against 11% (8%) for a Norway-style EEA/EFTA membership and a lowly 10% (4%) for a second referendum on EU membership.
The polling suggests that the more information provided strengthens the case for Canada-style, WTO and No Deal but weakens the case for Chequers and a further referendum.
With the scenarios discussed, evaluated and prioritised, the respondents were then asked how they would vote if different outcomes materialised. Again the Conservatives achieved their highest public vote share if a Canada-style deal or WTO rules were the outcome – obtaining 45% support, while No Deal still won them 43% support – all higher than the 42.4% the party managed at the General Election of 2017.
Conservative support fell to below the General Election benchmark if the Chequers Plan was the outcome, reaching only 39%, while EEA/EFTA left it at 37%. For Labour support the variation was a fairly even spread within the 3.5% margin of error, with a high of 35% if the UK stayed in the EU falling to 32% for No Deal, with Canada-style, WTO and Chequers all on 33% and EEA/EFTA and a second referendum on 34%. The even spread might reflect the lack of clear leadership for any one option coming from Jeremy Corbyn and his team – but whatever the reason, the poor showing would suggest the Conservatives would remain the largest party.
It is not all good news for the Conservatives, however, since Theresa May is not pushing a Canada-style deal – indeed she continues to rule it out while she perseveres with a deal based on her Chequers Plan – what we should call “Chequers-minus”. Were that scenario to become real, then a fall in her party’s vote share to only 39% would see her lose more seats, while UKIP’s 8% might not be enough to win seats, but it could hand Conservative marginals over to Labour. The previous poll conducted by Global Britain across the top 44 Conservative marginals showed that persevering with the Chequers Plan could cost every one of those marginals to Labour and the SNP. A deal that would put a Labour minority government in power – in return for a second independence referendum – would then be back on the table. Rather than help save the United Kingdom from breaking up, Chequers could actually endanger it.
Voters were also asked at the end of the survey, having been presented with the options in the course of the interview and being able to consider them against each other, if they might change their mind on their preferred option. Amongst Conservatives here was some marginal change, with the Canada-style deal (34%) and Chequers Plan (10%) each gaining a point, WTO (18%) and No Deal (24%) swapping places, and EEA/EFTA (6%) dropping four points. The changes in all voters mirrored these minor shifts, suggesting that voters at the moment are not inclined to move a great deal between the favoured options.
Finally, the survey asked all respondents what they considered a satisfactory Brexit. Leaving the EU with control of borders, laws, money and no oversight from EU institutions came top with 39% (reaching 57% amongst Conservative voters). Leaving the EU under WTO rules and then negotiating a trade deal attracted 24% support (33% amongst Conservatives). Failing to negotiate a deal with the EU and then opting to remain a member attracted 33% – but only 7% support amongst Conservatives; while joining EEA/EFTA as rule takers attracted 3% (3%) – while the Chequers Plan of leaving the EU with some oversight of laws and paying £39bn attracted a derisory 1% (1%) of support.
The survey of 805 respondents weighted for the UK, conducted after the issues were aired fully at the party conferences, gives broadly the same answer as the survey of 22,000 respondents interviewed in the 44 Conservative marginals last month: namely, Chequers is deeply unpopular, is not considered to be a satisfactory Brexit and the No Deal/WTO option is not an electoral threat, especially if it then leads to a Canada-style trade deal at a later date. But will Theresa May’s government listen?
The full details of the poll are available at the Global Britain website.
The post New poll confirms Canada-Plus, the WTO option or No Deal as public’s favoured Brexit outcome appeared first on BrexitCentral.
The Chequers Plan has to be withdrawn if we are to achieve a meaningful Brexit. Discussions between the EU and UK about allowing an extension to the transition period in return for dropping the unnecessary Irish backstop are only of relevance if it means a Canada-style deal can then go ahead – it should not be a precursor to accepting a Chequers-based agreement.
The reason for this is simple: in a new report published today by Global Britain we show the Chequers Plan is the Single Market by another name – and remaining in it (rather than accessing it) would be damaging to British economic interests.
The key myth propagated in favour of the Single Market is that it is central to UK prosperity. It is not. Our report demonstrates that the UK trades well with the world but poorly with the EU. This is odd as the UK has no special trade arrangements with the US, China or Australia yet runs a small trade surplus with the rest of the world, but a very large deficit with the very region with which we have a customs union – the EU.
For example, our report exposes the contradiction that the UK enjoys a trade surplus with the US – arguably the most competitive market in the world – without having a trade deal, but suffers a huge trade deficit of £96bn with the EU where Single Market membership is the equivalent of a trade deal.
Due to its bureaucratic approach, the EU is in structural decline. It has underperformed every other region in the world for a generation. This is not a coincidence as other advanced economies including the US, Canada and Australia have powered ahead. It is the institutional arrangements of the EU – and the single currency in particular – that have resulted in rapid economic decline and socially unacceptable levels of unemployment in much of the EU.
The EU’s trend towards centralised regulation undermines competition and increases regulatory burden. Within the Single Market framework provided by adoption of a common rule book, the UK would continue to be beholden to needless regulation and legal creep as EU lawyers interpret a definition of EU competence well beyond merely trading standards and into to many other areas of national life.
The EU has also failed to sign global free trade deals with many of the world’s most important partners including the US, China and Australia. Inside the EU, the UK cannot strike its own deals with the many much faster growing nations. Because the EU is a diverse group of 28 nations, agreement is highly problematic and cumbersome, hence the failure to reach agreement. Outside the EU, the UK can much more readily strike free trade deals.
It is now apparent from comments from the US, China, Australia, India and others that far from being ’at the back of the queue’, other countries are very keen to strike mutually beneficial free trade deals with the UK. This will allow the UK to rebuild its historic mission of encouraging global free trade that has gone off track over the last 40 years as the UK has surrendered its trade policy, so unsuccessfully, to the EU.
It is also a myth that the UK needs to be part of the Single Market to trade with it. This is clearly not the case. All nations have access, outside a tiny number under sanction (North Korea and Syria for example) so long as they comply with local regulations. One does not need to join China to trade with it any more than one needs to join the EU.
It is clearly in the EU’s interests to agree a zero tariff deal with the UK – such as a Canada-style agreement. There are many reasons for this but the primary one is simply because the EU sells more to the UK than the UK sells to the EU. It would be nonsensical to undermine its own trade particularly at a time when EU growth is so weak.
If, however, the EU refuses to do so within a reasonable timeframe, the UK should leave the EU without a formal agreement on 29th March 2019, relying on WTO rules and striking free trade deals with our global partners. This outcome would be far better than what the Chequers Plan offers because the UK would otherwise be saddled with no say on Single Market regulation.
To remain under the jurisdiction of the common rule book, effectively still under EU jurisdiction, having left the EU, is a Remain option that delivers a sovereignty illusion – with no say, low growth and a high regulatory burden that would lock in perpetual trade deficits. That is why Chequers must be chucked and a Canada-style deal for the whole UK used as the template for a new relationship.
The post The EU is in structural decline – which is why we must not remain tied to its Single Market appeared first on BrexitCentral.
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Brexit march: Former Conservative deputy prime minister calls Theresa May's No 10 speech an 'affront to parliamentary democracy''I may be naive, but if something is wrong, I look first for the person in charge,' Lord Heseltine told thousands of protestors in central London
Brexit march: Former Conservative deputy prime minister calls Theresa May's No 10 speech an 'affront to parliamentary democracy''I may be naive, but if something is wrong, I look first for the person in charge,' Lord Heseltine told thousands of protestors in central London
- Petition rejected by Theresa May has more than three times as many signatures as all pro-Brexit petitions combined