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The good folks at Lawyers for Britain (all donations appreciated) have cut to the chase with Martin Howe QC’s assessment of the situation as it appears to him.
The European Union’s proposals for the UK’s transition period make grim reading. They are the sort of terms which might be imposed by a victorious power in war on a defeated enemy. They are not terms which any self-respecting independent and sovereign country could possibly agree to, even for an allegedly limited period.
Apparently, we must agree to implement every new EU law while having no say or vote; and we shall not be allowed to conclude trade agreements, even to roll over existing agreements which the EU has with other countries so that they continue to apply to us, without the EU’s permission. We must abide by the rulings of a foreign court on which there will no longer be any British representation.
Apparently, an outrageous and demeaning proposal by the Commission that the UK should be subject to extra-judicial sanctions under which the EU could suspend market access rights is now to be “re-worded”. But that would still leave the UK extremely vulnerable to damaging new rules being imposed on us during the transition period by processed in which we would have no vote and no voice. As reported in the Telegraph last week, the EU has plans to use these powers in order to launch regulatory “raids” on financial institutions on British territory and to make rules which will damage the competitiveness of the UK’s financial services industry
Do not think that this is just a lamentation, there is a perfectly sensible alternative.
What is the alternative? One alternative if the EU persist in offering these unacceptable terms is to walk away from a deal with the EU altogether. That is possible; but there is another way. That is to walk away from the transition arrangement, but still to pursue a longer term trade agreement with the EU.
The post goes on to make a lot of valid points about a way forward, and has an excellent analysis. (Although he is wrong about there being no orange production in the UK, I have just finished a pot of marmalade made commercially from English-grown oranges, albeit on a microscopic scale).
But let it sink it, what we are facing is Finlandisation, a modern-day ‘Treaty of Versailles’ with us as the Central Powers, when it should be a re-run of 1776 and its aftermath.
I just wanted to share this chance-found five year old Observer editorial because it is so gloriously apocalyptic: “If Britain leaves Europe, we will become a renegade without economic power”
Conservative Eurosceptics will be delighted. For them, membership of the EU has contributed to Britain’s protracted depression. Echoing the defeated Tea Party in the United States, they offer Britain a prospectus of becoming like Hong Kong. Minimal protections in the workplace; the chance to develop ourselves as a tax haven;
Sounds great! Alas, not all my countrymen share this inspiring vision of our post-Brexit future, but at least we’re out.
to become Europe’s economic and political renegade, imagining that the EU will be perfectly happy to accept unfair and unregulated competition. To believe this as the route to economic salvation is fanciful indeed.
Instead, it will be a disaster at every level. Britain’s mass car industry will head to low-cost countries that have remained in the EU. Much other manufacturing will follow; Airbus production will migrate to Germany and France. Already, there is massive damage. It was partly because Germany now anticipates Britain leaving the EU that Berlin vetoed BAe’s deal with the defence giant EADS. It did not want Europe’s defence industry to be concentrated in a non-EU member. The financial services industry will be regulated on terms set in Brussels and be powerless to resist. British farmers, who have prospered under the Common Agricultural Policy, will find they become dependent on whatever mean-spirited British system of farm support that replaces it. Farms will survive by industrial farming, devastating the beloved English countryside.
Tax avoidance and evasion will reach crippling levels as our economy becomes increasingly wholly owned by foreign multinationals that make tax avoidance in Britain central to their business strategy. No Eurosceptic ever complains about the selling of Britain to foreigners, a much greater constraint on our sovereignty than Brussels. Our fiscal and monetary policy will shadow that of the European authorities for fear of an attack on sterling if we do not.
We will be become subcontractor to the world with zero economic sovereignty, a bits-and-pieces economy offering low-paid, transient work to a public unprotected by any kind of social contract because of the disappearance of our tax base.
The best in Britain know this – most in the leadership teams of our main political parties including the Tory party, directors in our top companies, our cultural leaders, our trade union leaders, our universities and some of our public intellectuals. Yet collectively they are silent, bullied and cowed by the overwhelming media might of the Eurosceptics and losing heart because of the single currency crisis. Yet the EU is putting in place mechanisms for the euro’s survival and even its prospering – a rescue and bail-out mechanism, a banking union, closer fiscal co-ordination and more political collaboration. The EU, the euro and the single currency will be here in a decade’s time – our continent’s instruments for managing globalisation and the challenges of the 21st century. We can be the renegade at the margins or playing our part in one of the great projects of our time. Those who believe in Europe need to start speaking out – and urgently.
From Forbes magazine’s website:
Wells Fargo and Apple both made substantial moves within London since the Brexit vote. Wells Fargo spent $400 million to buy a new European headquarters in London’s financial district. Apple announced plans to open a new London campus in 2021 that covers nearly 500,000 square feet of space. Facebook is also in the market for 700,000 square feet to accommodate 9,000 employees.
The whole article is worth a read. And it reminded me that there are now dozens of stories, tracked by the likes of Guido Fawkes, going on about how This or That splendid thing has taken place “despite Brexit”. The joke here, of course, is that the Remain-leaning folks who write for the likes of the Financial Times and others have a hardwired assumption that Brexit is bad, will damage the UK economy, and that anything that appears to be positive is therefore in some sort of defiance of said presumption, to be dismissed, or cast aside. (This is not all one way, of course, there can be over-inflation of optimism about what the UK departure will mean, but my impression is that the volume of “despite Brexit” stories and the bias they reveal is much greater than the other sort.)
The point is soon being reached when an entire volume of news stories could be gathered into one place and the title of the book could be called “Despite Brexit”. Maybe those folk at Guido Fawkes or the Spectator, etc might bring out one in time for next year’s Christmas. I suspect the book will run to several hundred pages. (OK, I demand copyright on the idea, now!)
Brexit: ‘Breakthrough’ deal paves way for future trade talks
In the spirit of 1066 And All That, is this a Good Thing or a Bad Thing?
N.B. Do not attempt to answer more than one question at a time. (An exception may be made for the Irish Question.)
It has been quite a grim century for Mongolia, many decades under the Soviet yoke after the ‘Mad Baron’ von Ungern-Sternberg managed to take over in the chaos after WW1, and write his own grim chapter, and still its capital is called ‘Red Hero’, but despite that name, Mongolia has got itself into the EU’s bad books, not by human rights abuses, but by a lack of them as a tax haven.
To determine whether a country is a “non-cooperative jurisdiction” the EU index measures the transparency of its tax regime, tax rates and whether the tax system encourages multinationals to unfairly shift profits to low tax regimes to avoid higher duties in other states. In particular these include tax systems that offer incentives such as 0% corporate tax to foreign companies.
The scoundrels, the shame of it, not taxing someone!
EU members have been left to decide what action to take against the offenders. Ministers ruled out imposing a withholding tax on transactions to tax havens as well as other financial sanctions.
OK, how about undercutting or matching them for starters? That would, actually, hurt them.
For some reason, the ‘charity’ Oxfam thinks it is entitled to chip in.
The UK-based charity Oxfam last week published its own list of 35 countries that it said should be blacklisted.
Are Oxfam’s shops taxed (or business-rated) in the same way as their commercial neighbours? Can they explain how sanctions (so useful against South Africa under Apartheid) improve the lot of the poor? Since sanctions harm, the corollary is that free trade doesn’t, and yet… But I digress.
Let’s hope that Mongolia shows the same defiance before its accusers as the Baron von Ungern-Sternberg did when facing a People’s Court, from ‘Setting the East Ablaze’ by Peter Hopkirk.
‘Showing no signs of fear at the fate awaiting him, the baron challenged the right of a ‘people’s court’ to try him. He told his Bolshevik accusers: ‘For a thousand years Ungerns have given other people orders. We have never taken orders from anyone. I refuse to accept the authority of the working class’.
Then they shot him.
The full blacklist is:
The 17 blacklisted territories are:
American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, The Marshall Islands,Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, United Arab Emirates.
and conceding the point that taxes create poverty:
The EU made exceptions for countries faced with natural disasters such as hurricanes, and put the process temporarily on hold.
The BBC, along with most of the Remain establishment, is presenting this as if it’s only the DUP which is standing in the way of an agreement between the EU and UK in advance of trade talks. In reality, I suspect a great many Tory MPs, more than a few old-school Labour MPs, and a large percentage of the British population would also object vehemently to Theresa May deciding for herself that Northern Ireland should remain under the jurisdiction of the EU at the behest of the Irish government and their masters in Brussels. Anyone who thinks this is a minor detail being blocked by a gaggle of DUP hardliners really doesn’t understand the issue at all. Or they do, but are spinning it differently for political gain.
– Tim Newman
However, even if £40bn were enough for the EU, many would ask why the UK should stump up anything at all. This is a political judgement that can perhaps only be made by the people in the room. In favour, £40bn (or more) might be a small price to pay in return for a ‘good deal’ with economic benefits potentially lasting many decades. Looked at this way, £40bn could be thought of a one-off payment equivalent to only a few billion each year (and much better value than HS2!). What’s more, since the ‘divorce bill’ is money that the UK would have to pay anyway if it had remained a member, it would be wrong to regard it as an additional cost of Brexit.
Against this, what would the British taxpayer be getting in return, especially if the default position is that the UK could walk away without paying a penny and ‘no deal’ would not be the disaster many fear? ‘Goodwill’ alone is surely not enough, and should in any event be shown by both sides.
At the very least it seems reasonable to expect the EU to agree to fast-track talks on a comprehensive free trade deal, including an explicit agreement on a time-limited transition period where trade remains as frictionless as possible. The UK could then make some of the money conditional on the success of these talks – perhaps anything more than the €30bn (£27bn) or so required to cover the period until the end of 2020 and something for pensions.
This might just about be acceptable to the British public too. But I don’t envy the job of those trying to sell it.
– Julian Jessop
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.
In writing this post I do not attempt to draw any particular moral, merely to share an episode of history I found out about by chance which has some incongruous parallels with the present day.
Quoting the Wikipedia article on the West Indies Federation:
Three member states were proposed as hosts for the capital city of the federation: Jamaica, Barbados and Trinidad and Tobago. Earlier in the federal negotiations the general opinion had been that the capital should be one of the smaller islands so that the capital would be in a neutral position to the larger territories and it would be able to inject some buoyancy into one of the (then) poorer economies.
…
The West Indies Federation had an unusually weak federal structure. For instance, its provinces were not contained in a single customs union. Thus, each province functioned as a separate economy, complete with tariffs, largely because the smaller provinces were afraid of being overwhelmed by the large islands’ economies. Also, complete freedom of movement within the Federation was not implemented, as the larger provinces were worried about mass migration from the smaller islands. In this sense, the current European Union can be said to have implemented a more unified economic space than the West Indian attempt.
Nor could the federal government take its component states to task. The initial federal budget was quite small, limiting the federal government’s ability to use its financial largesse as a carrot. It was dependent upon grants from the United Kingdom and from its member states. The provincial budgets of Jamaica and Trinidad and Tobago were both larger than the federal budget. This led to repeated requests for those states to provide greater financing to the federal government. These requests were not well received, as Jamaica and Trinidad and Tobago together already contributed 85 percent of the federal revenue, in roughly equal portions.
…
For many Jamaicans it appeared that the Federation would then just hamper their development and movement towards independence.
As a result, the Bustamante-led Jamaica Labour Party (the local component of the West Indian DLP) successfully forced Manley to hold a referendum in September 1961 on political secession from the Federation. It passed, with 54% of the vote, despite the opposition of Manley, the province’s Chief Minister at the time.
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On January 14, 1962, the People’s National Movement (the Williams-led Trinidad component of the WIFLP) passed a resolution rejecting any further involvement with the Federation. Williams himself stated that “one from ten leaves nought”—in other words, without Jamaica, no Federation was possible. Trinidad and Tobago became independent on August 31, 1962.
Without Trinidad and Jamaica, the remaining “Little Eight” attempted to salvage some form of a West Indian Federation, this time centred on Barbados. However, these negotiations ultimately proved fruitless. Without its two largest states, the Federation was doomed to financial insolvency.
Via Andy Silvester and Guido Fawkes, I have discovered the hottest new thing. From the people who gave you EURODAME, HELP! comes…
Taxlandia!
Does tax build YOUR future? Try it and see!
No, it is not a wind-up. Although from the time it takes to load, you might think it was powered by clockwork.
Later: I set the age level to 9-12 and gave it a trial commensurate with my attention span. Honestly, compared to Eurodame, it ain’t bad. They acknowledge the existence of the Laffer curve, how’s that? Peaks at 50%. Maybe the rampaging kaiju came after I got bored and left.
The Times tells us that a moment of decision approaches. “EU nations will block Brexit deal if Britain ditches Brussels regulations, warns Michel Barnier”:
National parliaments or regional assemblies across the European Union will block a future trade deal if Britain tears up Brussels regulations on competition, food safety, social standards or environmental protection, Michel Barnier warned today.
The EU was alarmed a fortnight ago when Liam Fox, the secretary of state for trade, hinted that after Brexit Britain would ditch regulations on health and the environment to secure new trading deals with countries such as the United States.
In a stark warning to Conservatives and Brexit supporters, Mr Barnier, the European chief negotiator on Brexit, warned that Britain’s choice between Donald Trump’s vision of a deregulated laissez-faire economy
Are we talking about the same Donald Trump here? Swanky hotels, reality TV, funny hair, President of the United States of America? ‘Cos that guy’s a protectionist. Like you.
or the “European model” of social and environmental protection will determine the shape of a final Brexit deal.
“The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it?” he said at the Centre for European Reform in Brussels.
Any preference?
All the while, parallel negotiations have been ongoing between the EU and our more militant Remainers: Blair, Clegg, Clarke, Adonis, Corbyn and more have all been along for meetings with Barnier and Juncker. Calls for a second referendum from senior Remain politicians are now regular. It’s not rocket science to see what is afoot: a co-ordinated effort to offer Britain the most punitive terms imaginable, with which the British will then be presented in a second referendum – crawl back to the EU or face a financially ruinous bill to trade.
Calls to ‘rule out no deal’ must be understood in this context – it is simply begging the EU to give us the worst possible deal, and everyone knows it. The EU’s apparent concessions in October are simply theatre to keep Theresa May in place – they have no desire to reach a reasonable deal.
We cannot continue walking into this trap. Instead, we propose the Government starts immediate preparations for reverting to standard global trade, the basis on which both the US and China trade with the EU, and create a ‘WTO transition fund’ with the money the EU is demanding: likely to be around £60 billion or more. Britain does, after all, do more trade with the rest of the world than it does with the EU under the cherished Single Market.
– Brendan Chilton
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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