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Negotiating Brexit

[Ed: the following text has been excerpted from a speech given last year by Howard Gleave, Richmond/Twickenham/Teddington UKIP branch, and is published with his permission.]

The government has said it will not give a running commentary on its Brexit strategy, but we are now six months on from the referendum, with still no detail about what Brexit will mean. This hiatus is ceding the initiative to diehard Remainers, who are mounting a full-blown counteroffensive against the referendum result.

If the government’s Brexit strategy is not clear, the same cannot be said of the EU, whose strategy is only too clear.

Firstly, it’s to play hard ball.

Secondly, it’s to mobilise Britain’s EU fifth column, politicians and journalists, to act as the mouthpiece of Brussels, claiming that punitive tariffs will be imposed and many British jobs lost, and seeking to overturn the referendum verdict.

In short, it is Project Fear Mk 2.

This requires a robust response. We must start with a positive and unrelenting vision of a Britain freed from the shackles of the EU. Brexit must therefore be used as a catalyst to focus our national energies and skills.

The EU is not a free trade area. It is a customs union. While 70% of imports into the EU are at no or low tariffs, it maintains a Common External Tariff that is designed to afford protection in areas traditionally important to the EU, such as the automotive sector, agriculture and footwear. Protection acts against competition and drives up prices. Indeed, the Single Market could also be referred to as the Common Protectionist Area!

Outside, British consumers could see prices fall. Average WTO tariffs are 3.5%. The EU’s so-called tariff peaks are typically three times higher. The EU, however, is constrained by WTO rules regarding the tariffs it can impose on Britain, i.e. they have to offer us the same level of tariffs as to the EU’s most favoured trading partner outside of the EU.

Brussels is also constrained by our large trade deficit with the EU: a record of £23.8 billion for the first quarter of 2016, approaching an annualised total of £100 billion. It is estimated that Britain would be required to pay £6 billion a year if the European Economic Area States imposed tariffs. But we would earn £12 billion in return, leaving us £6 billion to the good.

Tariffs are taxes ultimately borne by the consumer but which accrue to the government. They make imports less attractive and substitutes more attractive. For the German motor industry, whose largest global market is Britain, this should give pause for thought.

We should not initiate tariffs, but reciprocate. This money could be directed towards purposes that boost our competitiveness. The WTO precludes direct subsidy of industries, such as paying their tariffs for them, but this money could be used to reduce corporation tax, or to fund tax breaks on capital investment. France, threatening to woo British businesses, has a corporation tax rate of 33%. From  2017, the UK rate will be 19%. Driving that rate lower still, financed by tariff revenues, is unlikely to do the French economy, and others, any favours.

What if the government were to bring forward a bill ring-fencing the proceeds of any tariffs that we might introduce? What if it tied those proceeds to measures to support British industry, to protect British jobs? What might be the electoral consequences for Labour, the SNP and the Lib Dems if they voted against such a bill?

And what if there were a bill dedicating the proceeds of our contributions to the EU budget to spending areas such as the NHS, housebuilding, and scientific research? Which MP would like to go into an election having voted against such a bill?

Such legislation would also send a clear signal to our EU negotiating partners that we mean business and are prepared for the worst. As such, it would surely influence the negotiating process.

On the subject of negotiation, cue Frank Field. He advocates negotiation at all levels and on all fronts. The European Commission is contesting Britain’s right to begin negotiation of Free Trade agreements in anticipation of Brexit, but legal analysis by ‘Lawyers for Britain’ suggests there is nothing in the EU treaties to stop Britain from negotiating such agreements, provided they come into force only once we leave the EU.

Field also advocates negotiating, or at least communicating very clearly, with key EU countries and their  industry associations. I am thinking of Ireland, for whom we are such a vital market, and the German BDI, their equivalent of our CBI. Hundreds of thousands of German jobs depend on trade with Britain. We should not let them forget it.

And what of integrated EU supply chains? Will the EU Commission and Parliament be allowed to damage vital EU interests? Think of Air Bus, one of Europe’s largest and most lucrative industrial ventures. Airbus UK is responsible for the design and manufacture of the high-technology wings for all Airbus models, as well as the overall design and supply of the fuel system. For most Airbus models the company is responsible for the overall design and supply of landing gear. Imposing tariffs on vital subassemblies will only make the finished product more expensive and less competitive than Boeing. Is this a credible threat?

Ultimately, Britain’s negotiating position is stronger than many think. The Brexit negotiations have been placed in the hands of ultra-federalists, such as Michel Barnier for the European Commission and Guy Verhofstadt for the European Parliament. But they must be careful not to overplay their hand. Real jobs and livelihoods are on the line throughout the EU. The EU cannot afford to depress its economic prospects yet further.

Finally, deregulation. Only 6% of British companies deal with the Single Market. Yet 100% of British companies are subject to its regulation. The Single Market could be renamed the Common Regulatory Area!

The government has elected to incorporate the entire body of EU law into British legislation to ensure legal certainty following our departure. Some people have advocated a so-called sunset clause to create a presumption that those regulations which are most damaging and expensive, especially for small and medium enterprises, will automatically be removed from the statute book unless their benefit can be demonstrated. Brexit creates an opportunity, while safeguarding essential rights and standards, to create a slimmer, less onerous regulatory regime here in Britain. Identifying priority areas for repeal could create clear political dividing lines in time for the next election, whenever that might be.

In conclusion, summarising what should be Britain’s Brexit strategy:

  • Communicate: communicate a positive vision of an outward-looking Britain determined to be a nimble and successful global player.
  • Terminate: trigger Article 50 at the earliest opportunity so that the two-year negotiation period expires before the next general election, at least as far as is foreseeable under the Fixed Term Parliaments Act.
  • Reciprocate: we should not initiate tariffs but should be prepared to levy equal and opposite tariffs should the EU go that route.
  • Legislate to mitigate: table legislation to create certainty, and mitigate the effects of a “clean Brexit”, while putting pro-EU parties and MPs on the spot to choose sides between the UK and EU.
  • Negotiate: negotiate trade agreements with future trading partners, and the best possible departure terms with the EU, having demonstrated our determination to cope with the worst they can throw at us.
  • Deregulate: quickly identify inappropriate and burdensome EU regulation, and repeal it.

If Britain dedicates herself fully to the task of wresting back control, rediscovers its self-belief as a sovereign country, and makes a success of it we shall, in the words of William Pitt the Younger:

“not just have saved ourselves by our exertions; but will have saved Europe by our example.”

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12 Comments on Negotiating Brexit

  1. Howard Gleave must be a very sad man with lots of time on his side.
    I would suggest that he lives a spoilt life probably from an inherited income or perhaps a gigolo to an older uglier woman who cooks for him whilst he cuts the grass (shaves his balls)on a Sunday.
    If Steven Fry and his homosexual ‘son’ should walk into the same room a single hand grenate would see the lot in hell.

    All ukip seekers will be culled .. one by 1

    It is a happening

  2. What a complete and utter load of rubbish.
    This fear of being in the European Union must stop.
    Mitigated by old timers born to xenophobic parents who did little or nothing but complain. Finger suckers of babies that they hope to train to become losers like themselves.

    Pathetic.

  3. So the author wants to,

    “◾Terminate: trigger Article 50 at the earliest opportunity so that the two-year negotiation period expires before the next general election, at least as far as is foreseeable under the Fixed Term Parliaments Act.”

    And waste effort by…

    “◾Legislate to mitigate: table legislation to create certainty, and mitigate the effects of a “clean Brexit”, while putting pro-EU parties and MPs on the spot to choose sides between the UK and EU.”

    Or we could perhaps decide that Brexit is a process, not an event and carefully decouple from the EU in a process that does as little damage as possible to the UK.

    For those that are interested,

    http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7793#fullreport

  4. Thank you for a clear exposition of the issues. Every nation wants to prosper (and we see how the countries of Africa are damaged by the EU’s protectionism and emphasis on technologies the Africans cannot obtain – and are now becoming dependent on China to provide in return for concomitant losses in sovereign control); through the option of free trade with Britain, many nations, suffering under the EU or because of it, will change their views about globalism – and “EU -style projects” will hopefully become increasingly irrelevant.

  5. I understood that if we incorporate EU Law into British Law it will mean until Government gets round to repealing it, we will still be subject the EU regulation regarding our fishing grounds. If this is so, it is imperative that repatriation of our fishing grounds is brought into the sunset clause proposal.

  6. Off topic, I hear Ray Finch has resigned as a councillor from Hampshire Council today, citing that he’s too busy with the eu work doing things like ‘visiting Auschwitz’ & voting in the eu parliament.

    This seems a slightly odd way to behave – to put eu publicity jaunts and votes in a parliament that UKIP has never taken seriously and is soon to quit altogether before governance in England; and to quit now seems strange too considering that the Council elections for the ward he represents are only 3 months off, when he could have stood down quietly without all the bad publicity that this early resignation will entail for the UKIP operation in Hampshire?

    • Ajax,

      He may feel guilty about not attending the last two meetings in the last six months, and feel it is not fair to the other council members and most importantly the constituents.

      My opinion differs to yours in so much I think our MEP’s should concentrate on one job alone, thus allowing them to do a good job. This is why I find it difficult to understand how Nigel and now Paul can apply much needed time to be leader of the party.

  7. Lots of stuff about this and that trade agreement and whether its beneficial. Almost forgotten is the fact that the standard of living is only affected to a very small degree by all this. The overwhelming determinant is how good we are at producing stuff. It used to be called The Industrial Revolution. You can’t compensate for a rubbish economy with trade deals.

    • Pharmaceuticals, Aerospace, Specialist Engineering, Hydraulic Engineering, Specialist Manmade Fibres, Auto Components, It Products, Food Processing & Distribution, Quality Furniture, Beef Cattle, Biscuits, Mustard etc, Tools, Pottery & Ceramics, Quality Cutlery & Sheffield Plate, Specialist Steel, Boat Construction, Nuclear Submarines, IT Games, Quality Hosiery, Sanitary Ware, Office Fixtures & Fittings, Stationary, Jams & Spreads, Suitings & Interlinings are a sample of good things made in the UK. There are many more examples and yes there are many more that need to be brought back plus opportunities for growth of new ideas,
      Please stop knocking everybody as of we are all on the dole or are pushing paper.

      • I was making a general point not judging the workers! But it is convenient for politicians to make out that prosperity is thanks them and their trade deals and sweeps under the carpet say allowing a bank catastrophe which turns the economy rotten for years.

      • Hmm….I wonder what HMGs reaction would be if BAES announced to much fanfare it was going to built an Astute class vessel for another country or allow it’s experts to do so in that country…

        If jobs are to come back – really good well paid jobs – then that either means massive, huge import tariffs to protect expensive UK workers…or jobs only coming back into niche industries….

  8. Another excellent article on Daily UKIP putting into the shade such MSM as the evil bbc, the Times, and that ‘get on with it and die you marxist nutters’ publication the Guardian.

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