Damian Green on inward investment


Damian Green is MP for Ashford, and is a Home Office Minister.  It’s reported that he has bucked the sceptic trend in the Tory Party, and described the “Eurosceptic dream of a new EU” as a “fantasy”.  In particular, he asks “If you were a company in China or India wishing to set up in Europe, would you be more or less likely to choose Britain if we had withdrawn (from the EU)?”.

He asks that question rhetorically, as if the reply were self-evident.  It’s not.

Business executives naturally and rightly think first about their businesses (as I know — I was in that game for thirty years).  They may not be experts on European issues, and many will simply accept the overwhelming weight of propaganda from the BBC and the Times and the FT, that being in the EU is essential for business, and for market access to the continent.  But let’s think it through.

When the UK leaves the EU, we will certainly have a Free Trade Agreement with the EU — firstly because it is overwhelmingly in the interests of both the UK and the EU to have such an agreement; secondly because the EU is required by Treaty to negotiate such an arrangement with any country which leaves the EU.  Business people (and especially the car industry, which worries about this point) need have no concerns over market access.

When we leave the EU, we shall start to dismantle the hugely damaging and onerous legislation and regulation which is holding back European economies and standing in the way of growth and employment.  Britain will become a much more attractive place to do business, to run factories, to make things.   Of course we need appropriate regulation of the labour market, and health and safety, but outside the EU we could make a massive reduction in the estimated £100 bn cost of EU regulation.  This would give the UK a huge competitive advantage.

I very much hope that outside the EU we should also drop Brussels’ unsustainable energy policies, which are driving up energy costs, forcing energy-intensive businesses off-shore, and undermining competitiveness.  We need a rational energy policy based on gas (including indigenous shale gas), nuclear and coal.  This would give us a further clear competitive advantage.

It is credibly estimated that EU membership costs the UK a frightening total of £150 bn a year.    With the savings we should make on direct EU budget contributions, and on regulatory costs, we should first be able to restore our fiscal position, and then move on to become a lower-tax economy — a further competitive advantage.

So.  Market access, more flexible labour markets, cheaper energy, lower taxes.  In the cliché of the moment, what’s not to like?  OK, Damian, would foreign investors be more or less likely to come here?  Obviously, more likely.

However Mr. Green is right on one point.  He says that the Boris Johnson model, of staying in the Single Market but dropping out of a lot else, is simply not on offer.  As I have repeatedly said, the Single Market is not a free trade area.  It’s an old-fashioned Customs Union.  Worse, it’s overlaid by a massive regulatory dead-weight, which is an intrinsic part of the Single Market itself.  So if you stay within the Single Market, you can neither negotiate your own trade deals with third countries, nor can you avoid the massive regulatory costs.

The route that Boris Johnson, Liam Fox and others should recognise and adopt is to leave the EU entirely, and to negotiate a free trade deal.

We shouldn’t be taken in by those who say that outside the EU we should be like Switzerland and Norway, subject to “EU regulation by fax”.  First, because we’re a much bigger country.  And second, because other countries comparable to the UK aren’t similarly subject to EU regulation.  Does Canada or Japan worry about “EU regulation by fax”?  Or Mexico or Korea, which have FTAs with the EU?

Of course we should have to meet EU rules on exports to the EU, just as we have to meet American standards for exports to the USA.  That’s simply a common-place of international trade (in which I was engaged for many years).  But the other 90% of our economy would cease to be regulated from Brussels, and even the EU export sector would need to meet only EU product standards — not the rest of the EU regulatory mountain.

Now more than ever, we should be Better Off Out. 

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2 Responses to Damian Green on inward investment

  1. mikestallard says:

    This is a cogent and compelling argument.

    People who want to “negotiate” simply do not understand the Single Market, M. Delors, M. Monnet, M. Verhofstadt or the two Presidents. They simply have not listened to what the main players in Europe are saying. They have forgotten how Germany was unified in the 19th century – Single market then the Empire then World War I and II.

    It is funny how history is simply repeated by those who have not studied it.

  2. Linda Hudson says:

    cannot argue against the obvious!

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