Lord Rose: A bad day at the Treasury Select Committee
Yesterday Lord Rose, formerly head of M&S and now head of the IN Campaign, must be choking on his breakfast eggs as he reads today’s headlines.
He admitted in plain terms that Brexit would mean higher wages for working people. This is obviously true. Brexit would end, or at least mitigate, the wage compression caused by mass immigration. Of course for a retailer like Lord Rose, that’s bad news – it means higher wage costs. But for millions of working people, it’s very good news indeed. And bizarre that the head of the IN Campaign should make one of the strongest arguments for Brexit.
He admitted that “the price of remaining in the EU” would include continued one-way traffic of EU migrants for the next ten years. Thank you Lord Rose – you’re making the Brexit case for us. And he went on to say “The benefits of being in the EU are outweighed by the costs!”. Perhaps he mis-spoke. But being pressed on the point, he replied “I stand by what I say”. So do we, Lord Rose. Thank you, and keep up the good work.
Massive Scare Offensive (at our expense)
The Government is about to publish its official report into alternative arrangements for relations with Europe in the event of Brexit. Needless to say, it is relentlessly negative and wholly unbalanced. It is disgraceful that our money and our Civil Service are used in this way to support David Cameron’s prejudices. There is no pretence of balance or even-handedness.
How do they do it? They stress the least attractive options, and make the most negative assumptions about all the options. And they simply ignore the most likely and most favourable option: a simple Free Trade Agreement. They also wholly ignore the huge risks of staying in a dysfunctional and declining EU which is facing existential threats on several levels.
Foreign Secretary Philip Hammond told the BBC Radio 4 Today programme that, “It is not credible to suggest that you could have continued access to the single market without having to accept freedom of movement of labour, without having to accept EU regulations, and without having to contribute to the EU budget.” But no other free trade area in the world has these conditions. And he should explain how (for example) South Korea has duty-free access to the EU’s Single Market without any of these restraints.
There is much emphasis on the disadvantages of the Swiss and Norwegian models – about which the Remainians are constantly banging on. Now both those countries have per capita GDP more than double the UK, so they can’t be all bad. But as we keep saying, we’re not after that model. We simply want independence and a free trade deal.
The Government paper looks at the WTO fall-back position which I outlined on March 1st, and concludes that we’d be worse off. That’s true, and it’s exactly what I said. But not much worse off. And in any case, as I said then, and Lord Lamont said more recently (“What is often forgotten is that the EU needs a [post Brexit trade] agreement just as much as we do”) we’ll have a free trade deal which will leave us with duty-free market access, but without the regulatory and political burdens of membership. And on that basis, we’ll be better off than today.
The vital point about the WTO position is that it gives the lie to the stay-mongers who say “Brexiteers have no idea what our trade relations would be like after Brexit – they have no plan at all”. What we have is a secure and reliable safety-net in the WTO. Yes, it’s not quite so good as free trade, but it’s not much worse, and it’s the worst case. In fact we’ll have a free trade deal – but doubters can be reassured that we have a guaranteed safety-net.
Saving jobs: The Government paper makes the usual misplaced warnings about job losses – but says nothing at all about the jobs we’re losing today, especially in energy-intensive industries, as a result of EU policies. Think steel industry.
Saving money: The Remainians make preposterous claims about the cash value of EU membership. But distinguished economist Tim Congdon’s thorough analysis shows that the total costs of Britain’s EU membership exceed 10% of GDP, including budget contributions, regulatory costs, misallocation of resources and the effects of the Common External Tariff. That figure is broadly confirmed also by Economics Professor Patrick Minford of Cardiff University, with whom I shared a Bruges Group platform last week.
And 10%+of GDP is a massive drag on our economy. Take it away, and we will see more growth, more jobs, and in the medium term lower taxes, less debt, more inward investment. And if we have the sense to change energy policies, much cheaper energy. What’s not to like?
And more nonsense from the Remainians
John Springford in the Telegraph writes a piece warning of Brexit.
I wonder why? Oh yes, he’s a Senior Research Fellow at the Centre for European Reform (though he clearly hasn’t yet noticed that the EU doesn’t do reform). It’s a long rambling piece and I won’t try your patience by taking it point-by point. But let’s pick out a couple of juicy bits.
His theme is that “The idea of buccaneer Britain trading freely outside the EU is a fantasy”. Of course the EU doesn’t actually stop us trading anywhere at all. But it does stop us doing trade deals with high-growth economies like India and China – and even the USA (current TTIP negotiations look likely to drag on for years, and they include elements that an independent UK might not choose to accept).
In today’s global world, where suits come from Colombia, cars form Korea and shoes from Vietnam, our John concludes that distance is a critical barrier for trade, and cites as evidence the fact that we do a disproportionate amount of our trade with the nearby EU. But it’s a circular argument. We do a disproportionate amount of our trade with the EU because we’re in the EU, and that’s the problem, not the solution. The pattern of trade merely proves that we’re too euro-centric, and need to look outwards to the world.
Then he gets straight into the argument which I have already rebutted several times in these Debriefs. But let’s go for it again. He grudgingly admits that we might set up a trade deal with the rump-EU, but adds (parroting Philip Hammond) “The EU would demand that Britain sign up to all single market legislation – so Westminster would not be allowed to repeal unwanted EU regulation. And we would have less sovereignty, not more, because we would lose our vote on new EU rules. The UK would also have to continue paying budget contributions and accept unrestricted immigration from the EU”.
Utter nonsense. The EU has free trade deals around the world with countries that don’t have free movement, don’t obey EU regulations, don’t pay for market access. As the EU’s largest export customer, they will need us even more than we need them. They’re simply not in any position to impose punitive conditions on access to their market – because we might just retaliate, and it would cost them a great deal more than it would cost us.
Renewed threat from France
(Ah! Where’s the Duke of Wellington when you need him?). When David Cameron first suggested that Brexit would mean “Jungle Camps in the Home Counties” (because the French would end the arrangement where we have the British border in Calais), the French government was quick to dismiss the idea. But now French Economy Minister Emmanuel Macron raises it again. Call me a conspiracy theorist if you like, but I seem to see the hand of the Foreign Office and Number Ten in this. They’re doing their best to get foreign governments to bad-mouth Brexit, so that improbable threats, previously denied, turn up as re-cycled headlines.
But it won’t happen. Firstly, any such move would be bad for the French. Do they want to see Eurostar disrupted as their Open Tunnel policy attracts thousands of migrants to Calais? And secondly, we have a simple solution: anyone arriving from France without a valid passport will simply be sent back. Macron’s threat is just not credible.
And the combative Monsieur Macron comes up with another block-buster. He warns that “British firms will lose full access to the Single Market”, and adds for good measure that the French will invite City bankers to move to Paris (good luck with that one, Emmanuel). But our answer is simple. If France, or the EU, makes any move to deny a Free Trade Deal, or to restrict market access, then Britain, as the EU’s largest external customer, is in a very powerful position to retaliate. They know perfectly well that our bite is bigger than their bark. They will not dare to take trade measures against us.
Memo to David Cameron and Philip Hammond: You’re not fit to be in government if you are prepared to lobby foreign governments to threaten your country. And that goes for George Osborne too.