When I took up my post as the RSPCA’s Chief Executive in August, one of the first documents in my in-tray was a briefing about how Brexit will affect animal welfare. I suspect for many people, they have never simply thought about how Brexit impacts animal welfare. When asked, 80% of the public said they do not want to see welfare standards watered down.
But with 80% of our welfare laws made in Brussels, of course Brexit hugely impacts animal welfare. And for no animals is this more true than for farm animals.
Brexit is the defining event for farming and farm animals in the UK in a generation. Last month MPs debated the Government’s suggested independent agriculture policy. Amazingly this was the first debate on agriculture policy since 1947, before many of the current intake of MPs were even born, although one MP followed his grandfather in discussing the policy. Since 1973, it’s been the Common Agricultural Policy (CAP) that has defined British farming.
No matter how you voted, we can all agree that the CAP has not delivered the best outcomes for British farmers and farm animals. Why? Because as its name suggests, it is common to 28 countries but is not specific to any of them. It remains a policy that spends 80% of its money – your money – solely on ownership of land. The more land you own, the more money you get. You are not even expected to produce much, and only have to comply with the baseline legal standards.
The CAP has certainly not delivered animal welfare in the UK. Although funding for animal welfare has been around since 2007, budgets are tiny: 0.5%. In England, no funding has ever been provided for animal welfare schemes. It’s not surprising that in England the CAP has resulted in negative impacts on both the environment and animal welfare. By failing to support higher welfare systems it creates conditions allowing more intensive, lower welfare farming methods to flourish.
Brexit allows us to move away from this approach, tailor our own agricultural policy based on our own world-leading animal welfare standards and properly recognise and encourage British farmers who want to follow better systems for their animals.
The Government’s new approach to farming, set out in the Agriculture Bill, is a system based on public money for public goods; public goods which crucially include animal welfare. A first, big step forward. In some areas, British farmers already farm to some of the highest animal welfare standards in the world, but in others they have fallen behind. They need a leg up to make improvements to their farms to deliver higher standards of animal welfare.
They also need the consumer to know this which is why we support – and the Government are looking at – mandatory labelling of how our chicken or beef got to our plates. We know this works. Mandatory egg labelling has made a huge difference to the numbers of free range eggs as consumers vote with their wallets.
We can do so much more. Brexit also provides us the opportunity to deliver this on a wide range of issues, including banning live animal exports, improving how we slaughter farm animals and reducing the times taken to transport animals from the farm to the slaughterhouse. No longer will our hands be tied by European rules. I hope that the Government is prepared to seize this opportunity with both hands. The signs are good so far that they are.
However, Brexit is not all sunlit uplands for British farmers and their animals. It will only work if we ensure we are not undercut by cheaper imports produced from less humane standards – in other words we need to keep our high standards, not lose them to other countries. The great unknown that is our future trading relationship with the rest of the world. As we approach B-Day it is absolutely essential that any future trade deals the UK strikes keep our standards intact by not allowing cheap, less humane imports to undercut our farmers. We must approach trade deals with the same standards we enforce domestically. We must ensure that these trade deals have language in them relating to animal welfare. We cannot allow the drive to become an international trading nation to undermine our animal welfare standards and threaten the livelihoods of British farmers. And it’s not just us saying this. Voices from across British agriculture – including the NFU – agree.
It’s been heartening to hear ministers from across Government commit to protect our animal welfare standards as we leave the EU. They must now deliver on these excellent intentions. High welfare standards will be an integral part of the appeal of British food and vital to the British competitive farming. The animals, farmers and consumers alike demand it.
The British people’s historic vote to leave the EU – the largest democratic result ever in our country – is not something to be feared.
It wasn’t a vote to leave Europe or to pursue an isolationist future. It was a vote for us to become a strong, independent nation once again – a country that is not afraid of standing on its own two feet.
The British people recognise, as I do, that around 90 per cent of global economic growth will come from outside the EU in the years ahead, and that the EU now accounts for less than half of our overall trade. Over 90% of all trade travels by sea – and we are inextricably linked to this global network. As we leave the EU, the one thing which remains fixed is our geography. We will remain, as we always have been, an island maritime nation, outward-facing and trading across the globe. British goods and services are recognised as the best in the world and sought after by global customers. This will not change.
So we must look beyond the shores of our European continent and be prepared to walk away from negotiations if the deal offered by the EU does not deliver a real Brexit – and be unafraid of doing so. We only need to be ready to trade under World Trade Organisation (WTO) rules: international laws that regulate the trading relationships of 164 member states and around 98% of global trade.
We will be leaving on 29th March next year and only a good deal for the UK should be agreed to. Otherwise we will be insulting the democratic request given to Parliament.
It is starting to be more than a little boring to have to listen to the almost daily ritual of doom, gloom and scaremongering. We are told there will be border chaos, food and medicine shortages, hikes in prices, states of emergency, gridlocked motorways, catastrophe – even an end to peace in Northern Ireland and civil unrest.
Beyond the Westminster village, and certainly at the top of England in my constituency, 350 miles from London, people listen to all this with incredulity. Last week’s Budget implemented our-tax cutting manifesto promises early, lifting more of the lowest paid out of tax altogether. It announced an unexpected tax windfall that we’ve been able to spend on our vital public services. UK salary growth has now risen to 3.1%, the fastest growth in wages in almost a decade, employment levels are at their highest since the 1970s and we’re growing steadily as an economy. Our future has never looked brighter.
Voters comprehensively rejected establishment scare stories during the 2016 referendum debate – and it turns out that they were absolutely right to do so. Let’s not bore and patronise them further; let’s get to the heart of how beyond March 2019 should look.
My long-held view is that we can deliver a great future trading relationship – and more – after our departure from the EU club, by agreeing a mutually beneficial trade deal for the whole of the UK, similar to Canada’s. This arrangement would allow us to boost our global competitiveness and innovation, as well as help the world’s poorest countries by enhancing trade and investment opportunities that contribute to the economic growth of their less-developed economies.
This isn’t a “hard” or “extreme” version of Brexit. This would be, as Canada’s Prime Minister, Justin Trudeau, said of his free trade deal, about creating “good, well-paying jobs”, putting “food on the table for families”, helping to “grow and strengthen our communities” and ensuring that each generation is “better off” and has a “higher standard of living, than the one that preceded it”. Why would this sort of deal be so bad for us?
If the EU doesn’t want to negotiate this sort of free trade deal with us immediately, we won’t crash out of the EU over some invisible cliff edge. Far from it: there are protections in place for the UK under international law under a set of terms overseen by the World Trade Organisation. The US, China and India are among the EU’s biggest trading partners – and they do not have a trade deal with the EU. They trade on WTO terms.
No deal would be better than a bad deal because being tied into EU regulations without a voice would only mean their controlling our future success by anti-competitive actions.
Under WTO rules – putting the bluff, bluster and meaningless threats aside – the EU won’t be allowed to discriminate against UK businesses. It won’t be able to set tariffs on our goods that are higher than those they impose on other countries; and it will be forbidden from using other regulations or standards (non-tariff barriers) to discriminate against our goods and services.
Arbitrary health and safety inspections at borders would not be lawful and the WTO’s new “Trade Facilitation Agreement” would require the EU to maintain borders, which are as frictionless as possible, using all the modern technologies at its disposal.
The WTO has taken great strides in promoting global trade since its inception in 1995. And at its roots lie values we all share: an end to discrimination, more openness and transparency, increased competition, discouraging unfair practices, protecting the environment and ensuring less developed countries have extra time to adjust to WTO provisions.
We need to be having our own voice at the WTO, speaking up for the interests of British consumers and businesses. We don’t need the European Commission to do this for us.
The WTO option is an entirely acceptable, workable alternative to a free trade deal as we leave the EU and Roberto Azevedo, the Director General of the WTO, has said that he is looking forward to having the UK back as an independent champion of free trade.
The UK is strong enough to walk away from these negotiations. Future generations won’t forgive us if we agree a bad deal with the EU that means we have not left the controls of others over our decisions.
There is no cliff-edge, just a stepping-stone to the future that our extraordinary democratic voice shouted at us – let us become, once again, a self-governing, free-trading nation.
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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.
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In his letter of 23rd August to Nicky Morgan, Chair of the Treasury Committee, the Chancellor, Philip Hammond, repeated the Treasury’s prediction of an 8% reduction in GDP over the next 15 years under a no-deal Brexit.
This is exactly the same prediction that his predecessor, George Osborne, gave during the referendum campaign in his short- and long-term analyses of the economic consequences of a Leave vote. Mr Osborne said that the short-term analysis:
“…comes to a clear central conclusion: a vote to Leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to Remain”.
Only one of these predictions was realised, namely the weakening of sterling – which actually had significant benefits in terms of boosting both exports and the returns on investments held overseas.
The Chancellor’s letter also notes the support for his projections from organisations such the IMF, the OECD, the LSE and NIESR. Those organisations use the so-called ‘gravity model’ of international trade – as did the Treasury at the time of the referendum. This model predicts that more trade will be done between closer, larger economies than more distant, smaller ones. However, the predictions of the ‘gravity model’ have been very poor since the referendum. A particularly poor prediction was the impact on employment. Instead of falling by 500,000, employment has risen by 600,000.
The gravity model would also have been a poor predictor of trading relationships well before the referendum. For example, it would have failed to predict that Britain’s principal trading partners in the nineteenth century were not European, but rather the US, Canada, the West Indies, Argentina, Brazil and China. These are the very trading partners we can re-engage with now once we now longer have to rely on Brussels taking seven years to negotiate a typical trade deal which is then subject to a veto by Wallonia.
As a result of the poor predictions, the Treasury has changed its model, but it won’t reveal how. It is now believed to be using a ‘computable general equilibrium’ model of trade called GTAP (from the Global Trade Analysis Project at Purdue University). This is a more ‘classical’ model of trade and has both a ‘supply’ side (involving production functions with factors of production, such as labour and capital) and a ‘demand’ side. This is very different from the gravity model, so it is surprising to hear the Chancellor continuing to assert that the IMF, the OECD, the LSE and NIESR support the new Treasury model, unless they have also switched models and kept quiet about it.
Despite using a new model, the Treasury has clearly calibrated it to produce exactly the same dire predictions as the previous gravity model – a strategy known internally as ‘policy-based evidence making’. The new model was then used to produce the ‘Cross Whitehall Briefing’ forecasts that have informed preparations for the UK’s departure from the EU across all Whitehall departments. Yet the only information about the new model that the Treasury has put into the public domain – very reluctantly – is the poorly photocopied set of PowerPoint slides on the parliamentary website. These reveal nothing about the structure of the model or how it was calibrated. Even the Prime Minister describes the new Treasury model as a ‘work in progress’.
Even more disappointing is the fact that the Treasury refuses to publish the results from the new model under the assumption that the UK implements the kind of free trade agreements (FTAs) that our main trading partners are begging us to introduce once we leave the EU in March next year.
Fortunately, it is possible to assess the benefits of these FTAs using a similar ‘computable general equilibrium’ model built by Professor Patrick Minford of Cardiff University and Chair of Economists for Free Trade (EFT). EFT have used the model in our new Budget for Brexit Economic Report – which forecasts huge economic gains in the event that Britain leaves the EU under a SuperCanada deal. The report also calls for a Post-Brexit Fiscal Fund to demonstrate that ‘Britain is open for business’.
Minford calculates that by 2020, there would be £25 billion per annum for the Post-Brexit Fiscal Fund and by 2025 this will have increased to a huge £65 billion per annum. To give an idea of the type of policies this could fund, Minford says:
“A 1% rate cut in
- Corporation tax would cost £2.6 billion in 2020 (hence £3.2 billion by 2025-6)
- The standard rate of income tax £4.9 billion (£5.8 bn in 2025-6)
- The standard rate of VAT £6.4 billion (£8 bn.)
- The top rate of income tax £1.3 billion (£1.6 bn.)
- The very top (‘additional’) rate £0.2 billion (£0.3 bn.)
From 2025, the further dividend of £40 billion per annum could be taken. At this point,
- The standard rate could be cut by 2%, at a cost of £12 billion (raising the tax threshold is very expensive and hardly affects any marginal rates, mainly going in the form of lower taxes to the better off, barely helping the less well-off because they lose benefits); or else VAT could be cut by 1.5% for roughly the same cost
- Corporation tax could be cut another 3%, costing another £10 billion; and
- The top rate could come down by 2%, costing around £3 billion.
- The remaining £15 billion could be used on spending.”
These figures give a very different view of the prospects for the UK economy post-Brexit. It is clearly unacceptable that key economic decision-making about the future of this country’s economy depends on a ‘work in progress’ model by the Treasury that is not in the public domain or subject to independent scrutiny. Even the Treasury’s two pre-referendum models were put in the public domain and were subject to the criticisms they justly deserved.
It is time for the Treasury to immediately release a technical report outlining the structure of the model and the assumptions it used to calibrate it. A key set of assumptions that were used in the ‘Cross Whitehall Briefing’ study is that the UK will impose the same set of tariffs on trade with the EU that we are forced to impose on the rest of the world under the Common External Tariff. These increase the cost of food and manufactures to UK consumers by an average of 20% once non-tariff barriers are taken into account.
It is in the gift of the UK Government to set the tariffs it imposes on imports from abroad after we leave the European Union. The Government could immediately agree to reduce these tariffs on imports from all countries in order to benefit UK consumers as EFT have been recommending for some time. For example, it could reduce tariffs by 12%, the same as the devaluation of sterling at the time of the referendum, so that the prices of imported goods are no higher than before the referendum.
This would greatly benefit UK consumers, but the Treasury has deliberately not modelled this scenario either. The Treasury must therefore immediately release full details of the new Treasury model so that others can use it to estimate the huge economic benefits from cutting taxes and import tariff as well as the other benefits to Global Britain pursuing free trade deals around the world.
The post The Treasury’s policy-based evidence making on Brexit has got to stop appeared first on BrexitCentral.
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Brexit: Theresa May pours cold water on move to renegotiate deal as cabinet ministers call for rewriteThe prime minister will visit Jean-Claude Juncker this week for further talks focussing on the outline future relationship