In “Alice through the Looking Glass”, the White Queen commends the ability to believe the impossible, and claims once to have believed six impossible things before breakfast. I fear that the Daily Telegraph may be developing the same skill.
Yesterday I was struck by the Business Comment column by Ben Wright. He covered two topics. First, looking at the possible outcomes of this year’s General Election, he lays great stress on the concern felt by big companies about the possibility of an EU Referendum and subsequent Brexit. Wright points out that while a substantial chunk of the voting public is eurosceptic, “the business community is far more europhiliac”. So we could see (says Wright) a Labour administration (pro-EU but anti-business), or a Conservative-led administration (pro-business but toying with a referendum) – neither palatable to business — or even (and this seems far-fetched to me) a grand coalition of Labour and Conservative.
But then Wright’s second topic was the disaster of the €urozone. Titled “Euro point of no return?”, Wright summarises the latest €uro crisis. Germany and the whole eurozone possibly headed towards deflation and a debt spiral. He believes that the Bundesbank may be obliged to accept the need for QE — but fears in may be too late, and that QE may not work. “We could be living with the consequences for decades”, he opines.
Astonishingly, Wright appears utterly unconscious of this conflict of ideas. He is saying that business leaders are terrified that we might loosen our attachment to an economic zone that is headed for the buffers. They are desperate to consolidate their ties to a sinking ship. They relish the prospect of being handcuffed to a corpse.
The EU is in relative – and perhaps absolute – decline. Dogged by disastrous monetary policy, and energy policies, and employment policies, and an unsustainable tax and welfare system, it appears to be beyond help and beyond saving. Surely if business leaders had any sense, they would be desperately looking for ways to minimise the damage, to loosen the ties, to turn outward to the world that’s growing, not inward to a declining and protectionist EU.
One of the great mysteries of the EU debate is this blind commitment to the European idea. I worked in the private sector for more than thirty years, yet I just can’t understand the attitude. What do they imagine they will lose when Britain leaves the EU? I’m sure they’d reply “market access”. But since the UK is Europe’s largest customer, and largest net customer, continued British market access would be a clear economic imperative for Brussels. The EU has free trade agreements with dozens of countries around the world, large and small. The idea that they would not countenance a free trade deal with their largest customer is risible.
The consequences of Brexit for British business would be more flexible regulation, lower regulatory costs, lower energy prices, and in due course lower taxes. What’s not to like?
And I can’t complete my list of impossible beliefs from yesterday’s Telegraph without reference to Owen Paterson. He is a man for whom I have a high regard. He has taken some very sensible positions on both of my key issues – Europe, and energy. And yet he seems to have come up with a pretty preposterous statement, if reports are to be believed. He said “Even if we were to leave (the EU) it is inconceivable that the UK could negotiate a trade deal with the EU that did not involve some agreement on freedom of movement”.
Sorry, Owen, but the facts and the precedents are all against you. Please don’t quote Switzerland and Norway to us: they don’t have simple free trade deals: they have quasi-associate-membership status, which is why they get roped in to a significant fraction of EU regulation, plus free movement. But the EU has dozens of free trade deals around the world. Some, admittedly, like Turkey, include provisions for visas and work permits. But that’s because we still maintain the fiction that Turkey is a candidate for EU membership. And Turkey wants access to the EU for its citizens.
Look at proper free trade deals like Korea, which came into force in 2011, or Canada (expected to come into force next year). These do not include free movement provisions, and nor should we expect them to. Of course the UK is much larger than either Canada or Korea, both as an economy, and as an external customer of the EU. Nonetheless the comparison with Canada and/or Korea is hugely more relevant than any comparison with Norway or Switzerland.
I am sure that the negotiations which we shall have on Brexit with Brussels will include agreements about who may come to Britain, and on what terms they can stay and/or work, (and vice-versa), but Paterson’s suggestion that open borders would be a pre-condition for a UK/EU trade agreement is way off the mark.