Post referendum debrief July 25th

Hammond: “A realistic negotiating position”

The FT reports that Chancellor Philip Hammond, speaking at the G20 meeting, has said that the UK must “adopt a realistic negotiating position” with the EU.  So far, so sensible. No one should enter negotiations with an unrealistic negotiating position.  But reading between the lines, it looks as though Hammond is running up the white flag.  Clearly he feels that we can’t retain “access to the Single Market” (see below) unless we accept most of the trammels of EU membership.  He doesn’t spell it out, but sceptics will fear that he’s prepared to accept free movement, EU budget contributions and acceptance of EU Directives and Regulations as part of the deal.

What he should do is to invoke Article 50, and then invite Brussels to discuss what it needs to do to retain tariff-free access to the UK market.  Show some back-bone, Philip!

The Single Market

We are constantly hearing Ministers and business leaders insisting on the importance of “access to the Single Market” (though to be fair to Philip Hammond, he’s also on record as insisting that we must leave the single market – it’s not clear whether he meant “This is policy”, or “This is the damage that Brexit has done”).  It’s become a mantra, almost an article of faith, for many in the debate.  It’s also, perhaps deliberately, a massive ambiguity.  So let’s try to deconstruct it.

The EU’s Single Market is an old-fashioned Customs Union, overlaid by massive and damaging levels of regulation and bureaucracy.  The conventional wisdom is that it makes trade within the Single Market much easier – though there are exporters who say that exporting to the rest of the world involves less hassle than exporting within the EU.  But it’s the concept of “access” that embodies the ambiguity.

All trading nations have access to the Single Market: The plain fact is that all trading nations have access to the Single Market.  All that varies is the terms of trade.  The three biggest suppliers of goods into the Single Market are the USA, Russia and China.  They are not members of the EU.  They currently have no preferential trade terms with the EU.  They are simply third-party, arm’s length suppliers – yet they are hugely successful.  Britain would also trade successfully with the EU if we were in the same position after Brexit – and that is absolutely the worst case we can envisage.  All likely outcomes are better.

Many countries have bilateral Free Trade Deals with the EU: Several dozen countries have established Free Trade Agreements with the EU (I always think of South Korea as my prime example, as I spent a number of years running businesses there).  These countries also have “access to the Single Market”, but on tariff-free terms.

A few countries have quasi-membership terms: A few countries, notably Switzerland and Norway, have quasi-membership terms with the EU, giving them tariff-free market access but subjecting them to budget contributions, EU regulations and free movement.  Yet these few examples were constantly quoted by the Remain side in the referendum – because they are so obviously a bad deal.

28 countries are EU members: 28 countries including the UK are currently EU members (with more, including Turkey, queuing up to join).  These have full tariff-free market access – but are subject in full to all the negatives of EU membership.

We have just voted against the fourth option – membership.  Clearly we don’t want the Swiss/Norwegian option, which is the worst of both worlds.  We could well live with the first option (the tariffs we would pay on exports to the EU would be less than half our net budget contributions).  Ideally we should press for the second option – a straightforward free trade deal.  And there are increasing signs that we could get such a deal.  The phrase we keep hearing from our continental partners is “a mutually beneficial relationship”.  Since  an FTA offers mutual benefits, that seems the most likely option.

But above all we must not be hoodwinked into accepting free movement or EU budget contributions as a price for “access to the Single Market”, which we will have anyway.

Theresa May visits Northern Ireland to discuss borders: There is a genuine issue with regard to the border between Northern Ireland and the Irish Republic. No one wants to see border controls or customs posts being reinstated.  It is worth noting that Option Two above (total independence for the UK, plus a UK/EU free trade deal) would eliminate the need for customs posts on the border.

Anger at EU deal to halt Brexit

Meantime both the Express and the Guardian report a possible deal being cooked up in Brussels to offer the UK a seven-year “emergency brake” on immigration, with the implication that on that basis we should remain EU members.  Worryingly, the Express describes this proposal as “Merkel, Hollande and May’s plan to keep Britain in the EU”.

This might have been a sensible negotiating offer from the EU when David Cameron was seeking his “renegotiation”.  Perhaps they now realise that their stonewalling was counter-productive, and led directly to the Brexit vote.  But the Brussels plan would leave Britain, after seven years, still locked in to the dysfunctional EU, and no better off than today.  It absolutely is not Brexit, and nothing like it.

Theresa May has emphatically stated that “Brexit means Brexit”.  Sadly, she hasn’t quite clarified what she does mean by the word – but it can’t be simply a minor concession on free movement.  Let’s be clear.  We want to be an independent, democratic global trading nation, able to make our own laws, our own trade deals, to control our own borders, and to be subject only to rules made in Westminster, not rules made in Brussels.  Far from being “a leap in the dark”, this is in fact the status of most countries, most of the time.  Not so much a leap into oblivion as a return to normality.

Terror in Germany

Following the recent incident in which a Syrian refugee blew himself up at Ansbach near Nuremburg, Angela Merkel has faced criticism for her slow reaction to terrorist events in Germany – and also, by implication, for her open-door refugee policy.  But there is no room forschadenfreude or complacency.  We are all at risk, and vigilance must be the order of the day.

US cools to TTIP without the UK

Many in the UK have deep reservations about the proposed TTIP deal between the EU and the USA, and some of the proposed provisions of the deal would have been unacceptable.  Nonetheless it is interesting that the Express reports reduced US interest in the deal after the Brexit vote.  It quotes a US source saying “The EU without the UK is like the USA without California”.  The EU’s chief negotiator has even been led to suggest (presumably through gritted teeth) that the post-Brexit UK might be invited to participate in the deal despite having left the EU.  Whether we’d want to accept is another matter.  I personally believe that the UK stands a good chance of getting its own UK/US trade deal, on terms that suit us, not Brussels, rather more quickly than the EU will get TTIP.

Erasmus under threat?

The Telegraph reports claims from academia that “British students could be excluded from the Erasmus student exchange programme” after Brexit (remember that academia was united against Brexit, imagining that the grant funding from Brussels would not be replaced in the UK). They fail to mention that several non-EU countries (like Iceland) participate in Erasmus. Other countries including Albania, Algeria, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Egypt, Georgia, Israel, Jordan, Kosovo, Lebanon, Libya, Moldova, Montenegro, Morocco, Palestine, Russia, Serbia, Syria, Switzerland, Tunisia and Ukraine are also able to take part on a limited basis.  Given that the UK has some of the best universities in the world, and that many thousands of EU students come to the UK, it is inconceivable that a post-Brexit Britain would not be involved.

Turkish reprisals

The Express features an Amnesty International report citing the appalling treatment by the Turkish authorities of Turkish soldiers alleged to have been implicated in the recent coup attempt.  Please read, and consider whether Turkey is a suitable candidate for EU membership, and whether it is committed to “European values”.

Guardian makes a record loss

The Guardian, that leading organ of the liberal left, and serial denigrator of our country (I believe it is also the preferred personnel advertising medium of the BBC) has just declared a record loss of £173 million.  Of course we are all in favour of a free press and diverse media – but if it comes to it, I suspect that The Guardian would not be much missed.

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20 Responses to Post referendum debrief July 25th

  1. terry sullivan says:

    hammond is a remainer

  2. Alan Wheatley says:

    The broadcast media that I watch, primarily the BBC, have many programmes on Brexit implementation, or address it as a part of their current affairs broadcasting. Two things in particular strike me about all of this coverage.

    (1) Very poor knowledge of the issues; e.g. no one speaking about “Article 50” seem to actually read it. And with this ignorance comes an overwhelming mood to just how difficult it is, how awefully long it will take and a total lack of any vision as to what should be the preferred objective.

    (2) A total lack of any participation from UKIP, presumably because there has not been an invitation. The BBC in particular seem to be paranoid about allowing the slightest hint that UKIP had anything to do with the success of the Leave campaign.

    As to No.2, I was shocked to hear Mathew Taylor say during an appearance on Daily Politics that one of the three big challenges the Vote Leave team had to overcome was UKIP! He claimed that UKIP was a negative impact on the leave argument. He was given a very friendly interview: for instance it was not put to him that Vote Leave’s campaign was not working until they adopted the UKIP position of placing immigration as the main argument (instead of the economy) and parroting “Take Back Control”, which is the same as Nigel had been saying for the last year.

    • terry sullivan says:

      Taylor is a remainer–he thinks it should reform–which of course it will not

    • ian wragg says:

      The referendum was won in spite of VoteLeave, not because of them.
      Here in the East Midlands LeaveEU and UKIP were active every weekend and I was out leafleting.
      The Electoral Commission was certainly not impartial when they awarded VoteLeave official status.
      If May tries to keep us in the EU with some Brexit lite then the Tories are toast at the next election.
      I also think there are many sitting MP’s who will make life very uncomfortable for the likes of hammond

  3. John Poynton says:

    “the tariffs we would pay on exports to the EU would be less than half our net budget contributions”
    Although true, that is not the right comparison, Roger. The taxpayer does not pay the tariffs on exports, but would receive the tariffs on imports. We need the money!
    The correct comparison is with devaluation, which at around 10% leaves us more competitive on balance than before. Why are we negotiating anything? It is not necessary.

    • catweazle666 says:

      “the tariffs we would pay on exports to the EU would be less than half our net budget contributions”

      And given the disparity between our imports and exports from and to the EU, about a tenth of the tariffs the EU would pay us.

      So why is this massively important bargaining issue not being emphasised?

      The EU needs the UK more than the UK needs the EU, why is it that the politicians and the media pretend the opposite, and that we must beg for favours from the likes of Merkel, when the German motor industry – about the only thing keeping Germany afloat – would effectively collapse if the British stopped buying BMW, Mercedes and VW products? Not to mention the French and Italians, with their Peugeots, Citroens and Fiats too, of course.

      Time to start throwing our weight about, and not playing at being the weaker partner.

    • Alan Wheatley says:

      A further consideration regarding tariffs is imports from non-EU countries.

      Currently imports to the UK from non-EU countries have to pay the EU tariff. If, as I think is UKIP policy (Roger?), initially the UK would maintain those tariffs, but once we have left the EU the UK would get them all rather than a small percentage as I gather is the current arrangement.

      Of course, once the UK is free to make its own trade deals we can decide what to do with EU carried-over tariffs. I look forward to cheaper Braeburn apples from New Zealand.

      I agree with other comments: the UK has a good hand, but seems it is being played by nitwits.

  4. MartinW says:

    A ‘typo’ in the first sentence: Philip Hammond is, of course, Chancellor of the Exchequer.

  5. Pamela Preedy says:

    Would love to see The Guardian dinosaur meet its extinction. It is anti-Britain and anti-British people’s rights in their own homeland. If only this rag and the preposterous BBC could sink into the sunset together.

  6. ian terry says:

    This stitch up for that is what it is would appear to be is well and properly underway. The remainers in post are not fit for office and should be cast aside. Bo Jo is just a liability and so much for his “full control” comments in endless debate. No wonder he was shafted by Gove . Totally ******* useless.
    There are far better leavers that could take any number of offices within the cabinet that could actually make things happen.

    These remainers have no intention or bottle to fight for the better good of this country.

    They need to wake up and smell the coffee. The EU daily is slowly but surely falling apart with attacks on German and French streets and Greece, Italy, France slowly descending into a full blown debt crisis that will bring the whole Union down. Why join a sinking ship?

    Empress Nick is going on as usual about Scotland’s future in Europe by the time they find the £13bn joining fee and get the joining conditions right, as long as the Spanish don’t shaft them the EU will be a distant memory of what was. Come next years elections over there it could be the final whistle. Not before time. If the leaders over there had any bottle they would go to their countries now and put their people out of their misery. Whether in the UK or EU the days of same old, same old politics is over and if the UK government do not make it happen then UKIP will destroy the opposition in swathes all over the country and the same will happen across the EU.

    Sadly for us the best leader candidate will not even be considered by the Party as she is still banned from applying for office.

    Bring it on

  7. Martin Reed says:

    This government and the media have been anxious all along to deceive the public into thinking the UK is at a disadvantage and must grovel to the EU for crumbs from the table. As did Cameron. They cannot possibly be that stupid. Can they? They must be perfectly well aware that the fallback position for trade would be WTO rules which would be greatly to the disadvantage of the EU. So why pretend otherwise as they do? Unless of course they are doing everything in their power to ensure this country remains shackled to Brussels. Shackled with immigration continuing out of control. The cry of “Brexit means Brexit” already rings hollow.

  8. Jane Davies says:

    And here is a round up of todays news……should kick off the silly season nicely!
    http://blogs.spectator.co.uk/2016/07/waitrose-effect-mr-nobody-new-pensions-minister/

  9. catweazle666 says:

    “Please read, and consider whether Turkey is a suitable candidate for EU membership”

    Of course Turkey isn’t suitable.

    But given the historic friendship of the Germans with Turkey and Islam in general, and given that now the pretence that Germany does not run the EU appears to have been dropped, I doubt that will make any difference to Merkel’s plan to fast-track Turkish membership.

  10. alexr64 says:

    The Leave camp should be making massive capital out of the vast financial mess that the EU has created, most of all in the destruction of futures for young people. Attack and attack the BBC for lying ‘by omission’.

  11. Christopher Browne says:

    The corporatist EU is a massive part of the remainers career structure, they will use every trick in the book to keep us in.

  12. Philip Rock says:

    Last night (Tuesday 26 July) I met Gerard Batten in Covent Garden where he gave a short talk about exiting the EU, which he is at least generally regarded as more expert than most other experts in the country outside the judiciary itself on the subject, and that might be being too modest on Gerard’s behalf.

    Gerard upheld what I understand he has always stated to be the case, and that is:

    1) Any Article 50 route to Brexit (by writing the letter of intent to exit the EU) leaves control of the process in the hands of the EU, exactly as Article 50 was designed to do, who will cause maximum frustration of the efforts of the country attempting to leave.
    (This route therefore would undoubtedly lead to an indefinite process by which the UK would effectively remain embroiled in and entangled with all issues concerning the European Union until compromises on those issues etc were to the satisfaction of the EU, possible David Cameron style and Brexit would cease to be Brexit.)

    2) The way to bring about certain Brexit is to Repeal the European Community Act 1972, which immediately disables the Treatise, but does not remove all the legislation put in place by the UK government (Parliament) in accordance with European Union Directives, as stipulated by the signed Treatise. The UK then can at leisure repeal the laws that are unwanted, amend the laws that are not as the UK wants them, and leave the laws that are acceptable to the UK.
    (By the repeal of the 1972 Act Brexit is effectively put into affect immediately, and the UK and the EU may be free to ‘negotiate’ whatever they wish from a neutral position rather than that in which the UK is still ‘inside the prison’, while the UK and individual nations work on individual trade deals.)

    The problem of obtaining the consensus required by Parliament to repeal the 1972 Act should not be allowed to subjugate the importance of Brexit, which should remain imperative above all other considerations. Once it is understood that the problem facing the country and Brexit is the 1972 European Communities Act, we may then have a chance of addressing the real problem rather than the problems placed in our path by the crooks who drafted the Article 50.

    Past this point I suspect we may have to dig deep. After reading Gerard’s book ‘Inglorious Revolution’ which gives a wonderful insight into English Law, natural Law, and the relationships in Law from the sovereign to the subject and from ruler to ruled, I see more clearly than ever that the giving away of the nation to a foreign body involved multiple acts of treason, high treason, and treachery. Surely by digging deep we can find something to work on that will trump Theresa May, any closet remainers, and Parliament itself?

    • Alan Wheatley says:

      My reading of Article 50 is not as you say.

      Article 50 describes a process where by one EU Member country wishing to leave the EU (the UK in this case) can reach agreement with the nominee representing the remaining 27. The EU is not in “control” of matters, it is a process conducted between two parties.

      Article 50 is not designed to frustrate, it is designed to facility two parties acting in good faith.

      Article is certainly not an open-ended process. It allows the negotiations to last for up to two years, at which point the leaving country is deemed to have left without any agreement. The process can be extended by the agreement of both parties. But there is no reason why it has to be a two-year process, as many erroneously seem to think.

      As to the 1972 act, I think that has to be repealed, and I would guess the date of its repeal would be coincident with end of the Article 50 process.

      If Article 50 process was going nowhere I think the 1972 act could be repealed and summarily bring an end to membership without agreement, but it would be better for all concerned for the end to be upon reaching an agreement.

      Two years is more than enough time – the sooner we get on with it the better

  13. A Benedict says:

    Roger
    Good article and a useful explanation. Can you not use your influence and connections to try and get this headlined in the pro Brexit papers such as The Daily Mail and The Daily Telegraph?

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