We should dump the Chequers proposal in favour of a deal with the EU on WTO terms
So now we have it. No sooner has the Prime Minister survived the parliamentary summer term than she has retreated into her bunker, taking personal control of the Brexit negotiations and sidelining Dominic Raab. Or perhaps more accurately, the Prime Minister is bending to her Europe adviser, Olly Robbins.
To paraphrase Lord Ashcroft, the electorate voted in the referendum to enable the UK to decide its own affairs. Those affairs include our laws and the jurisdiction of the courts who interpret and enforce them, our money in respect of taxes and trade, our prerogative to decide who comes into Britain and for what purpose.
Three quarters of the parliamentary constituencies of England and Wales voted for this, as did two thirds of the constituencies across the UK. Nonetheless, the establishment have never accepted this result.
The Conservative Party explicitly stated in the manifesto on which they were elected, that we would leave the Single Market and the Customs Union and remove ourselves from the jurisdiction of the European Court. The Prime Minister has promised this on numerous occasions, not least at the Lancaster House address. It would appear we were misled.
Eighty five percent of voters backed parties committed to Brexit at last year’s general election. It is a tribute to Jeremy Corbyn that in practice he appears to have been true to Brexit, in contrast to Chuka Umunna, who clearly does not care what commitments his party has made and therefore cannot be trusted.
The Chequers White Paper contradicts many of the promises of the Prime Minister and is a fundamental betrayal of democracy.
To be charitable, it does provide for tariffs to be negotiated away in trade deals and thus some trade deals can be struck, albeit inferior ones. However, it does not allow for mutual recognition or the removal of non-tariff barriers, the stuff of good trade deals.
The requirement to adhere to a common rule book – that is rules made by the EU, in favour of the EU, in which we will have no say, in perpetuity – will prevent good trade deals, meaning we have no control of our laws in respect of goods, agrifoods, the environment, social policy and employment – and the canon European Court decisions will hold sway over any arbitration process. It will damage the domestic and global export economy and oppress our people.
Preference given to EU migrants who have access to a job will perpetuate mass migration. The unlimited supply of cheap labour flowing from this will result in a low-wage, low-productivity economy, with little incentive for businesses to train people or invest in innovation. Surrounded by the EU anti-competition, protectionist wall, it is hardly surprising that the multi nationals of the CBI love it.
We will continue to have over 800,000 unemployed under 25s. Every migrant entering the UK into a low-skill job costs British tax payers a net £3,500 per annum in benefits and public service costs.
The alternative to the Prime Minister’s proposal, a World Trade Organisation (WTO) Deal, would cover aviation, visas, residency, passports, customs admin and all of the practical stuff but would enable the UK to have complete freedom to make our own laws, do trade deals and control who comes into Britain.
Because we would be able to remove tariffs, it would reduce the cost of living – especially for the poorest – boosting disposable income and the economy in the process. Trade deals would include non-tariff barriers, further boosting the economy and reducing living costs.
Whether tariffs are erected between the UK and the EU or not, Britain will be the winner. Tariffs on food and consumer goods are relatively high, typically 20% to 50%; by contrast, most industrial tariffs are insignificant at an average of just three percent. Cars are an exception, where tariffs are ten percent.
In respect of many food and consumer goods which the UK does not produce, tariffs can be removed unilaterally. This would damage continental producers but boost the UK and reduce the cost of living.
For cars, the imposition of tariffs by each side would simply mean that German and French cars are more expensive and consumers would buy more British manufactured cars, a fillip to UK jobs.
Tariffs levied would go to the UK instead of the EU, the extra money to the Treasury enabling tax cuts elsewhere or an increase in public spending. Tariffs removed unilaterally or through trade deals would boost consumer spending power and improve living standards. For the poor this may be by as much as 15%.
A WTO deal would lead to some short term disruption as things adjust, but quickly the benefits would flow.
In addition, we would be able to offer the EU a Canada++ style Free trade arrangement, something which the EU have consistently said they would be disposed towards but which the Prime Minister has persistently turned her face against. It is a proposal that Leave Means Leave put forward eighteen months ago.
The only alternative to Chequers that the Prime Minister has put forward is WTO Global Trade with no deal. This would still be better than Chequers, better than a bad deal, but would be more disruptive.
So, how is this going to end? Well, I foresee three likely scenarios. Of course there are many, but this is my best shot for now.
The first is that the Chequers deal, watered down by the EU – a Chequers minus – is agreed by the EU and that Parliament endorses it. The 40 or so Brexit Conservatives fighting this are outvoted by Blairite Labour MPs who vote with the Government. This would be a very bad deal for Britain and a betrayal of the electorate.
The second scenario is that the EU rejects the Chequers proposal in any form and that the Prime Minister does not carry through WTO global trade with no deal. Instead she seeks an open ended extension of Article 50. Parliament votes for this with Blairite Labour MPs outvoting the now 60 Conservatives who vote against it. The Conservatives fail to seek a leadership challenge or fail to oust her.
Both the above keep us close to the EU and therefore will no doubt be a relief to Remainers, but the latter goes further and effectively keeps us in the EU and would no doubt be a joy to Olly Robbins, Philip Hammond and other Remainers at the heart of government.
The third scenario has it that even the sheep in the Parliamentary Conservative Party recognise that the above scenarios are on the cards, decide that enough is enough and that there needs to be a leadership challenge, that the Prime Minister is replaced by an inspirational leader who is for Brexit and that a WTO deal is pursued. This is the only outcome faithful to Brexit.
The lessons of the above likely outcomes are stark.
July 25th, 2018: BrexitCentral