Recent UK gross domestic forecast predictions, issued this week via the glum figure of UK finance minister Philip Hammond, have encouraged some of my friends who are EU Remainers to shout about how Brexit is damaging Britain, we are going to lose tens of thousands of jobs to the continent, or wherever, etc, etc. The rage is not dying, in fact. Some of the language (Brexit supporters are “retarded” being a recent one) is not becoming milder. We haven’t yet reached the acceptance phase after the initial shock and anger.
Apart from the devaluation of sterling after June last year, there hasn’t been all that much of a shift on the economics front. The underlying performance of the UK economy does not appear to have altered that much. Some American banks such as Goldman Sachs and JP Morgan talk of shifting some business to the continent to create subsidiaries in anticipation of any EU access shenanigans, as I would expect, but it hardly fits with a Biblical level of terror to justify some of the vehement language I see on forums such as Facebook.
Assume we must take seriously the risk of life outside the joyous embrace of the EU Single Market, this is worth considering, from Tory MP and former minister, Peter Lilley:
The Single Market is talked about as if it were some inner sanctum accessible to a privileged few. In fact, every country has access to the Single Market – with or without tariffs. The Single Market programme, which I implemented, involved harmonising product rules – sensible, since businesses can now make one product range for the European market, not 28. But that benefits American and Japanese exporters as much as German or British firms. Although often invoked as particularly benefiting UK service companies, in fact UK service exports to the EU have grown less rapidly since the Single Market reforms than any member state except Greece and Italy
He also responds to the point that apparently, by being outside the EU, the UK will now submit to EU rules without being able to influence them:
People assume Britain benefits from participating in setting these rules. But rules provide a framework within which all companies operate – not an advantage to any individual country. Britain set the rules of tennis but rarely wins Wimbledon! British exports to the EU have grown less rapidly since the Single Market than they did before 1993, less than our partners’ and much less than non-EU countries’ exports! Maybe that is partly because we suffer EU regulations on 100% of our companies (costing our economy billions of £s) whereas non-EU firms need only comply with EU regulations on activities carried out within the EU.
And on the “passporting” issue that comes up:
How important is the right to passport services to the EU? Passporting lets financial institutions operate throughout the EU via branches supervised by their home country regulator without seeking authorisation from local regulators. Having introduced the Single Market measures, I decided to make a speech extolling how they had removed barriers to trade, not least through passporting. Unfortunately, my officials could not find a single company doing business it previously could not do! Banks were almost invariably operating, not through branches, but via subsidiaries which still needed local authorisation and regulation. (Emphasis mine.)
And on the terror that outside the EU, the UK will be hurt, Mr Lilley looks at EU-regulated mutual funds and alternative investment funds regulation (private equity, real estate, private equity, etc):
Since then the UCITS, MiFID and AIFM directives have extended passporting rights to other financial service providers who do take advantage of it. However, most UCITS funds choose to operate via subsidiaries in Luxembourg and Dublin without causing an exodus of jobs from London. Also the AIFM directive provides for recognition of equivalent standards of regulation by non-EU providers which is intended to be granted to Hong Kong and Singapore, so could scarcely be refused to the UK post Brexit.
In other words, you don’t have to be in the EU to manage investments sold within its borders. And yet if you take some of the Remainer arguments at face value, you would think that the UK is to be cast into a dark, lonely place.
A final thought. One of my Remainer co-jousters talks of the folly of the UK “going it alone”, as he claimed we had done after 1945. That, however, not only ignores our membership of NATO but also the UK’s web of trade with not just the continent of Europe, but also the old Commonwealth nations and places such as Argentina, and of course the US. The UK was hardly living under a rock during the period before EEC membership began in 1973, and further, that membership involved slapping tariffs on many of those countries. As Mr Lilley says, it has taken ages for the EU to hammer out free trade deals with nations such as India, China, etc, and to improve on what we have with the US. (I have even seen some of my Remainer friends dismiss this range of countries as “minor”, or “colonial outposts”). So let me get this straight: the US, Canada, Australia, New Zealand, India, South Africa, parts of Latin America, the Pacific-Rim, etc, are “minor”, but the European Union is a powerhouse. Great, got it.
Have a good weekend everyone.
Almost everybody who voted for Brexit gave their reason as sovereignty. The remainers just won’t shut up about money. Now I’m for capitalism as much as the next guy, but your liberty should be the one thing that is never for sale. Those who would sell their liberty and that of their neighbor for EU gold are deserving of contempt.
In the long run I suspect Britain will be more prosperous out, but that’s not why I voted for Brexit. That said, I imagine many remainers will not be better off in Brexit Britain.
This is a link to bookmark, both because Lilley can be quoted as a former minister deeply involved in these matters, and because he has an accessible and friendly writing style. I liked this point:
“Having introduced the Single Market measures, I decided to make a speech extolling how they had removed barriers to trade, not least through passporting. Unfortunately, my officials could not find a single company doing business it previously could not do!”
Agreed JadeLibertarian – but contrary to the “Remainers”, the European Union also COSTS (not gains) us money. Although Mrs May seems to determined to throw money at the European Union even though we are supposed to be leaving it.
J.P. is correct – the idea that membership of the European Union has been wonderful for British service industries is an illusion.
Still I am not a forms person (and the European Union is all about form filling) – for example I have never even filled in a tax “rebate” form in my 52 years on this Earth. If I have to fill in a form to get something – I would rather do without (as I do not relate to forms – I have no idea what I am supposed to write, the questions never make any sense), so I am going to be a bit biased against something that is based on bureaucracy – as the European Union is.
I observed during the indyref that both campaigns talked much about money even though both flavours of Scot were a lot about nationality. Money gives a superficial appearance of being objective, countable, comparable – and so discussable. It needs some capacity for judgement to talk meaningfully about sovereignty or nationality, and in Scotland in 2014, where (for reasons that seem amusing now) the SNP’s enemies let the labour party guide their campaign, while the SNP knew it already had all actual Scottish nationalists, the campaigns’ spent most of their time talking about money.
The Remoaners are in an even worse fix. Occasionally, the wildest will reveal their true loyalties but most understand that getting us to wave the EU flag, to sing the EU anthem (whatever it is) and to feel as much co-citizens of French, German and Greek people as of British is incredibly unable to fly here. So of course they talk about money.
In truth, the money wasted on EU membership fees, while not trivial was the least of my concerns as a hard-line BRExitier, the greater cost of being in the EU being primarily about the regulatory burden.
Sovereignty is a more nebulous aspect, harder to put your finger on (or attribute a value to), but at the same time more important.
The Remoaners bitch about “the loss of EU trade” as they are struggling on every other front and they imagine that to be their strong point, whereas in reality it will be their undoing as we will discover when the trade track of BRExit “negotiations” / Kibuki theatre get underway in the coming months.
If we’re being asked to pay €60 billion (or whatever this weeks fantasy figure is) for the same trade deal as Canada (who paid nothing), I suspect the eponymous Man on the Clapham Omnibus would say
So let David Davis continue to feed Michel Barnier and his EU cronies with the rope they need to hang themselves, because all that I am seeing is the EU demonstrating their contempt for Britain and that will be their undoing.
The British will put up with a lot of bullshit, but European haughtiness sticks in most peoples throats like grandma’s fruit cake.
Niall,
I couldn’t help notice that during Scotland’s Indyref, there was no mention (to my eyes and ears) at all of citizenship, and what would happen to UK passport holders resident in Scotland, or those born on or after Day 0. Surely all ‘True Scots’ would have lost UK citizenship on Indy day, wherever resident?
We do hear a bit about Remoaners seeking EU passports, I’ve even heard talk of such on the streets of Cambridge, but still that’s more than I heard of the matter in respect of Scotland.
I read the linked article in The New European by Grayling, and even as an uninformed and mostly disinterested foreigner I had to laugh. Do people read this and take it seriously? There were so many untruths (I’m being polite) and mischaracterizations that I had to add the author to my internal “never ever believe anything this person says ever again” list.
Seriously, once you realize that your primary argument begins with “we’re ignoring the critical 16 and 17 year old vote”, you ought to drop your pen and take a deep breath.
A number of relevant issues were little discussed during the indyref.
– Neither side were keen to question the legitimacy of the referendum: 16 and 17 year-old’s voted, along with everyone else inside Scotland’s borders, whether or not they were Scottish by any definition, and no-one resident outside Scotland voted, whether they regarded themselves as Scots or not (my sister, then resident in England, had no vote). So while all ‘True Scots’ might have applied for citizenship in the new entity on (IIRC) 24th March 2016, I doubt anyone resident outside Scotland would have been obliged to do so. Much more of a question was what would happen in those areas (probably the bulk of Scotland’s land area in any but an overwhelming vote) where the majority of residents would have wished to retain British citizenship.
– Neither the natz nor the campaign against them (labour-led, but on this issue the establishments of the other parties were predictably like them) were eager to engage with the question of whether our overall EU citizenship would or would not solve all such problems. The whole natz project was devised with the idea that EU membership was a fact of life, restraining either side’s ability to do much about people within its borders who were not its citizens. The natz hated being questioned about whether Scotland would even have to apply to rejoin the EU, despite the most explicit statements from EU leaders that they would.
I could go on – but perhaps I’ve already gone on enough on this side topic. 🙂
To me, sovereignty combines all of the issues mentioned here and elsewhere (such as financial and regulatory), as well as several others – some “tangible”, some less so.
A couple of points:
1. State sovereignty and individual freedom are not the same thing.
2. I am quite happy to believe that this is a case of short-term pain; long-term gain.
Indeed.
If played correctly (and David Davis is playing the “negotiating in good faith” mode quite well) then not only may the UK be free in a short while, but it might yet bring about the collapse of the EU in total, freeing the rest of Europe from Franco-German hegemony.
I’ve always believed that it wasn’t the first EU exit that would do it. A successful BRExit (even if after a few years of uncertainty), will pave the way for others to follow our lead, probably the Visegrád Group of Czech Republic, Hungary, Poland and Slovakia.
As we’ve seen before, freedom can be infectious, especially when it is seen as being successful elsewhere as the Arab Spring illustrated.
We might yet get the Iron Curtain lifted…
“That, however, not only ignores our membership of NATO but also the UK’s web of trade with not just the continent of Europe, but also the old Commonwealth nations and places such as Argentina, and of course the US.”
It ignores EFTA, of which the UK was a founding member, and prime mover. Indeed, what the EU fanatics often forget (or, probably more accurately, deliberately refuse to acknowledge) is that EFTA was a direct reaction to the political ambitions of the nascent “Project”, right from its founding moment. We’re often told that the UK “walked out” of the Messina conference, as if it were a fit of jingoistic pique at being asked to work with those awful continentals. In fact, as it became clear over the course of that meeting that the idea was, in the infamous words of the subsequent Treaty, “ever closer union”, many delegations recognised that this was something they shouldn’t be party to.
The UK went on to co-operate with the nordic states (except Finland, which joined in 1986), Austria, Portugal, and Switerland in founding the European Free Trade Association in 1960. Hardly the “splendid isolation” of the Remaniacs’ imagination.
“Much more of a question was what would happen in those areas (probably the bulk of Scotland’s land area in any but an overwhelming vote) where the majority of residents would have wished to retain British citizenship.”
Indeed, Niall. Fortunately we never had to find out. Although the Scottish vote was vastly more legitimate than the Catalan (it could hardly be less), when I look over there I can’t help thinking we dodged a bullet. I’ve said before that I, for one, was perfectly prepared to actively refuse Scottish citizenship and live as a foreigner in my home town if necessary.
I was not even aware that the British were formally represented at Messina (despite British involvement in the project being discussed there).
If Britain does lose jobs to the EU, it can balance out the problem by deporting all the foreigners that are overrunning your cities.
Fair enough, John. I knew it was a bit more complex than I made out, but didn’t know the details. However the point is that the political aspect of the Project was apparent from the very start, and this was what bothered the British government. Bretherton’s sympathetic attidude actually highlights this: they knew fine what was going on (despite insisting as late as the 1975 referendum – and afterwards – that it was only a “common market”), and could have taken full part. As I say, its enthusiastic embrace of, and leading role in, both NATO and EFTA show that its reluctance to do so had absolutely nothing to do with isolationism.
“harmonise social polices” – that, translated into normal language, means that taxes and government benefits and “public services” are to be much the same all over the “United Europe”, as are regulations.
In short, for example, the Parliament at Westminster would be reduced to a pointless talking shop – with taxes, government benefits, public services, and regulations much-the-same (“harmonised”) all over the “united Europe”.
And that was the Messina Conference some 60 years ago.
Now I am no uncritical admirer of Parliament (far from it) – but to “harmonise social policies” is obviously unacceptable, it would reduce Parliament to a nullity. Indeed a demand to do so could only, logically, be considered a de facto Declaration of War.
So hardly “much ado about nothing” – the British government seems incapable of seeing plain enemies even when they announce their intentions so plainly.
“They do not really mean it”.
Yes they do mean it – they have been saying it for more than 60 years.
From the name-calling cited, it sounds like the UK’s self-professed ‘elite’ deal with frustration no better than America’s do. You might want to consider importing a term I’ve come up with for their American counterparts, the innocent-sounding “SPF community” – SPF standing for ‘Shrieking and Poo-Flinging’. 😛