The EU’s menacing henchmen are proving that Britain has a battle ahead on Brexit
In the run up to the election, we are already seeing that the “Great British Break Off” from the EU is going to be a bunfight. Frau Merkel is already flaunting her pre-election credentials as the strict and parsimonious Swabian hausfrau. Meanwhile her Brussels henchmen – Verhofstadt and Juncker – are openly insulting the Prime Minister. Today, Michele Barnier, has waded into the escalating fight with threats of “political and legal problems” if Britain refuses to pay a Brexit divorce bill.
The uncompromising stance on negotiations adopted by EU leaders makes it clear that there is a real battle ahead.
The most important ingredient in the Prime Minister’s recipe for Britain’s future must be that, regardless of what the EU threaten, we are not going to enter the discussions with the EU half-baked. And one of the most important tests of this is that the government recognises what is, and what is not, important.
Much has been made of the negotiation of a free trade arrangement (FTA) with the EU, but, in fact, a FTA is merely the cherry on the icing on the cake. It is vitally important that there is a clarity of vision that the UK can have a better economic future outside the EU than it would otherwise have had by staying in.
But this solid result can only be achieved if the government does the right things and, in particular, does not give away any of the real economic benefits of Brexit in exchange for a FTA. We must have our cake and eat it and not exchange it for a shiny cherry. For if we do that, we will merely have a poorer version of what we had before.
There are, of course, many siren voices calling on the Prime Minister to do exactly that – voices who secretly hope that in so doing we will suffer economically and the British people will then call for a reversal of the decision to leave the EU.
Others, in the trade associations for example, merely want what they perceive as a damage limitation exercise, preserving as much of what we have as possible. But there are many enterprising business people up and down the country who are embracing the future, looking for opportunities and exhibiting the vision to see beyond the stale and crumbling protectionism of the single market.
All of the industrial tariffs that the EU could apply to UK goods add up to less than half of our net contribution to Brussels ; the average tariff is 3.5 per cent – already far outstripped by the revaluation of the pound. The real economic benefits are entirely in the gift of our government and independent of the exit negotiations, but can only be applied if we leave the Single Market and the Customs Union, which is why it is right that Mrs May has said that is what we will do.
We should be preparing for the real benefits now and should put a time limit of the end of the first quarter in 2018 for the signing of “heads of agreement”. With EU leaders demanding the Brexit bill be settled ahead of any trade deal and threatening to use citizens rights as a bargaining chip, the need for a time limit has never been more important.
The EU are notoriously dreadful at negotiating trade deals. It looks highly likely that we will not negotiate a trade deal, or even if we do, Britain will fall into the trap of transitional arrangements and have no time and resources to deliver the real benefits, which far outweigh a FTA.
The economic benefits to be had from quitting the EU include: reinvestment of our net contribution in infrastructure, digital connectivity, R&D, education and training; FTAs with other countries around the world and the removal of tariffs; reform of the CAP; repatriation of fisheries; and some deregulation. These add up to a huge boost to UK growth and can be applied from day onwards, drip fed into the mix to give a “self-raising” economy, but we must start to prepare now.
They are all in our own hands and we cannot allow the EU to impede or distract from them. We must recognise that the mission of the EU Commission is to ensure that we are as equally uncompetitive as the EU and that we are dragged down to the soggy bottom of European growth.
Undoubtedly it is everyone’s interests to deal with the technical and administrative details of exit: open skies, customs arrangements, visas, residency, a level playing field for trading in financial services across Europe, and these should be the focus of any ongoing discussions beyond the end of March 2018.
Clarity on all of this, by quarter one 2018, would give certainty to business and allow enough time not to require transitional measures.
What we do not want is some sugar-coated, fudged and half-baked deal emerging from the final summit, in typical EU fashion, when we can have a crisp exit on our terms.
In the Prime Minister’s own words, “No deal is better than a bad deal”. To put it another way, with the obstructive position EU leaders are taking, “No deal may well prove the best deal”. And this should be written in the icing on our Brexit cake.
John Longworth, Co-Chairman of Leave Means Leave and former Director-General of the British Chambers of Commerce
May 3rd, 2017: Telegraph