Dear Nick: I have read the report on the launch of your “Conservatives for Reform in Europe” campaign. I have been in politics for seventeen years, but I don’t think I have ever seen an example of a senior politician writing such a spectacularly misleading analysis of a major issue. I am reluctant to suggest that you set out deliberately to mislead, so I am forced to conclude that you have utterly failed to understand the position that the UK will enjoy after Brexit. Your comments are so egregious that for the benefit of other readers, I think I have to quote them at length.
“Let’s be clear: leaving would not be a cost-free option. Quite apart from the risk to inward investment, the price of access to the market which British business requires would likely be a substantial payment to the EU, the free movement of labour and no say over the rules – all the very things that proponents of leaving claim we would no longer have”.
Let’s leave aside “the risk to investment” – though it seems strange for you to raise it just at the time when more and more multinationals, including Toyota and Airbus, have made it clear that they would stay in the UK after Brexit. And let’s not forget that a major auto company, Ford, recently chose to close its commercial vehicle facility in the EU – at Southampton – and move it to Turkey, which is (so far) not in the EU. Here is a major multinational betting with its wallet that it can service the EU market better from outside the EU than from inside it. Given that after Brexit the UK would be in a position to offer lower energy prices, a less regulated labour market, and in due course lower taxes, Brexit can become an incentive for inward investment.
What really astonishes me, however, is your suggestion that the EU would demand – and be able to negotiate – a “price” for market access. That price, you suggest, would include a cash contribution, free movement of labour and subjection to EU rules. Are you wholly unaware that first of all, after Brexit, the UK will be the EU’s largest export market, bar none? And that we run a very large trade deficit with the EU? If anyone is charging for access, the commercial logic dictates that the UK should charge the EU for access, not vice versa. Is there any other market to which the UK exports that seeks to extort a fee for market access? And leaving aside Norway and Switzerland, which have rather special deals that we should not seek to emulate, is there any other country with a free trade deal with the EU and is required to pay Danegeld for the privilege? Do we pay a fee for access to the US market? Of course not.
The idea that the UK should pay a fee to the EU for market access, when we are their largest customer, is preposterous.
You imply that we should be obliged to “observe EU rules”. This is an example of the apparently deliberate obfuscation on this issue by the “IN” camp. Yes of course our exports to the EU would have to meet relevant EU product specifications, just as if we sell refrigerators toAmerica or tractors to India we have to meet the relevant product specs in those countries. But that is a world away from suggesting that the whole British economy should be subject to the vast panoply of EU regulation, which covers practically every aspect of industrial and commercial activity.
Are you aware that even if Britain after Brexit had no preferential trade deal with the EU, the total duty due on UK exports to the EU under the Common External Tariff would be substantially less than our current net EU budget contributions?
Similar comments apply to the free movement of labour. The EU has a free-trade deal withKorea (as well as many other countries). Is there a free-movement clause in that deal? Of course not. The EU is currently negotiating its TTIP deal with the USA. Do you imagine that that will have a clause allowing free movement of labour between the EU and the USA?
In the context of free movement and immigration, you make another comment which is profoundly (and it seems to me, deliberately) misleading. You write: “(If we stay in) we would still be outside the Schengen area and so able to maintain our borders”. But as long as we stay in the EU, and therefore subject to its free movement rules, we are clearly unable to control our borders – and that is probably the biggest issue in the whole EU debate. Your throw-away line is unworthy of serious consideration.
It may be true that 3½ million jobs in the UK depend on trade with the EU (though not on membership of the EU). But if so, it must also be true that five or six million continental jobs depend on the same trade. If Brussels seeks to restrict UK/EU trade in any way, the continents’ captains of industry will be beating down the doors of the Commission. Do you imagine that those smart guys in Munich will say “OK, the UK has left the EU. So we won’t sell them any more BMWs”? The hell they will.
Digby Jones, former Director General of the CBI, says that if the UK leaves the EU, we will have a free trade deal in 24 hours, and he ought to know. It may take longer than 24 hours, but it will be readily accomplished in the two years prescribed by Article 50 of the Lisbon Treaty.