July 15, 2016

Good Europeans want an early Brexit

Good Europeans want an early Brexit

John Redwood MP argues a quick Brexit is in both Britain’s interest, and the interest of our European neighbours.

As I expected, the rhetoric on the continent is changing. Yesterday the President of the European Parliament challenged the pre vote rhetoric of the Commission by saying “The UK should not be treated as a deserter but as a family member who is still loved but has decided to go in another direction”. The EU leaders are urging Mrs May to speed up the UK’s plans for exit, and saying they want to get on with it.

I agree with them. It is in the EU’s interest to sort this out quickly, and definitely in the UK’s interests.  It need not be a difficult negotiation. We have no wish to negotiate over our borders, our money or our laws with 27 other countries. We just need to take back control. They want to integrate their economies and political systems more, to sort out their banking troubles and tackle slow growth in the Eurozone.

There remains one prime outstanding issue. Will the rest of the EU want to carry on exporting to us tariff free, or do they wish to go over to the relatively low average tariffs under WTO rules? The UK will be quite happy not to impose new tariffs, and to continue to accept the rules and regulations over products and services for our trade with the rest of the EU, so we are not seeking any changes to all that despite being in substantial deficit with them.

There is a good case for early exit, early legislation on borders, and early cancellation of our subscription to spend at home. Any changes the other states want to their trade arrangements with us could be debated after we have retaken control of all these other important matters. The UK could live with MFN status as the USA and China do in their very successful trade with the EU, though of course we think it is in their interest even more than in ours if we continue with current tariff free arrangements.

The EU naturally would like us to carry on paying money in and accepting free movement. Once they realise this is not on offer, they then have a simple decision to make. How many barriers do they want to trade, up to WTO permitted levels. The sooner they decide that the sooner we can decide whether to accept their proposals or simply walk away. We do not want the Foreign Office telling us the negotiation is difficult, will take time, and requires us to give in over free movement.

Long delay is costly. At £10bn a year net contribution (probably rising) that would amount to a massive £38bn over the balance of this Parliament which we could spend to good effect at home. Delay in placing sensible controls and a fair system of work permits globally could also lead to substantial additional UK costs to provide the level of housing, transport, health care and education we would want to offer to recently arrived workers on low incomes.

A successful negotiation should be a simple and quick one concentrating on the only area where the EU has a role in future policy, over trade terms.

4.90 avg. rating (97% score) - 39 votes
John Redwood MP
John Redwood MP
John Redwood is the Member of Parliament for Wokingham in Berkshire. He was formerly Secretary of State for Wales in Prime Minister John Major's Cabinet. He is currently Co-Chairman of the Conservative Party's Policy Review Group on Economic Competitiveness.
  • Davidsb

    …a price well worth paying to have few less dusky faces on the streets….

    These would be the “dusky faces” flooding in from Poland, Hungary, Bulgaria, Romania, Latvia etc., would they? I have to confess that my clearly ignorant assumption was that immigrants from these (and other EU) countries would have been mostly white/Caucasian – perhaps you can post the accurate numbers for the racial split of EU immigrants over the past few years?

    Thanks in advance….

    ;¬)

  • ScaryBiscuits

    The convention around the world is that money and securities can be traded anywhere. This is not a concession but because it is virtually impossible to stop. We trade Roubles for Yuan in London because we can, not because of the kind permission of Moscow and Beijing. The same applies to Euro transactions. Whilst in the EU, France and Germany attempted to stop London doing its historic business and forcibly move it to the Eurozone (as punishment for our refusal to join the Euro). The failed because the EJC ruled against them although nobody believed that was the end of the argument. The ECJ is capricious and prone to political pressure: it would eventually have capitulated and in the EU we would have had no come-back. Outside the EU, the City is safe and we can trade any securities we like. If the EU tries to enforce anti-competitive and protectionist measures, particularly over financial services which don’t need physical permission to cross borders, then they will almost certainly fail. Their best hope is to gull our politicians into some concessions, that we almost certainly don’t need to give. Hence the bluster.

  • ScaryBiscuits

    You call other people ‘ill-informed’ but don’t seem to have many facts of your own. German car production amounts to almost 2.7% of their GDP. UK financial services amounts to 3.3% of UK GDP, so hardly ‘far more significant’ and indeed UK financial service exports are a much less dependent on trade with the EU than the EU auto industry is on trade with the UK. That’s because the city is genuinely global rather than a predominantly European business like the auto industry. Redwood is right: the pressure is on the EU to do a deal with the UK as failure to agree something better than WTO rules it will hurt them far more than us.

    BTW British people can go almost anywhere in the word to work and always have been able to. (You’re making up that stuff about millions of people being repatriated in the 14th century- it never happened.) It is not and never has been the EU that allows our free movement but our own traditions as a free country. As you say, the referendum is over: you therefore need to stop the Remain scaremongering and smears. Voters didn’t buy it. Try being polite to Mr Redwood for a start 😉

  • Terry Howard

    The referendum is over and the result declared. Still we have half-baked, ill-informed discussions about the consequences of Brexit. WTO rules do indeed provide a backstop for manufactured goods (though not a great one) but we live in a service economy. Moreover WTO rules only determine tariffs, not non-tariff barriers. We cannot leave the EU and immediately replace trade with the EU with trade from the Commonwealth and a hodge-podge of other nations – we need to agree a deal with the EU which allows for trade in both goods and services, which allows for Brits who want to live and/or work in Europe and for Europeans doing the same here (unless we are to suddenly have bilateral repatriation of millions of people and go back to the 14th century). The terms of this deal will not be determined by the German motor industry. It could quite possibly be determined by the City of London, whose earnings are a far more significant component of the UK’s economy than BMW’s are of Germany’s. The real argument is about what the terms of this deal might be and it is to gain traction in that argument that Mr. Redwood keeps writing these silly articles full of half-truths, wishing that his viewpoint was credible enough to have David Davis’ job – it isn’t..

  • Mr TaxPayer

    Would that were so. Take a close and critical look at Germany’s military and you’ll see a husk of a once great body. Robbed of the requirement to face down a Soviet threat there Bundeswehr is hollowed out token force that rarely left camp in Afghanistan, the Luftwaffe struggles for serviceable combat aircraft and the Kriegmarine daily thanks Neptune that it does not share a sea border with anyone remotely threatening.

    The German defence industry is in a good state – Rheinmettal, Kraus Maffei, H&K – but the forces are not there.

  • Allyup

    I’m not convinced the EU can ever move on from dysfunctional economic policies based on perennial surpluses for Germany whilst the rest are driven into poverty see

    The only way to save the EU is for the UK to leave it http://qz.com/721089/the-case-for-brexit/

  • Inoff the Red

    But free trade means free trade for goods AND services, the deal includes retaining the financial services passport. If they refuse then the German car industry better get ready for the effects of tariffs on their prices and competing against cars from Japan that will not be handicapped by such tariffs if/when a free trade deal is agreed. It is for Audi/VW/Mercedes/Porsche to discuss the long term effects of this with A Merkel.

    Before the City gets too misty eyed and regretful about Brexit, they should consider what life would be like within the EU after the imposition of a financial transaction tax which would have been inevitable.
    Also, if the EU goes for mutually assured destruction, the City may be disadvantaged but the larger and more dynamic economies of the world lie outside the EU and must surely offer greater potential for growth, especially without the shackles of the EU bureaucracy.

  • Johnnydub

    My god – you are so desperate for Brexit to fail aren’t you…

  • Ayayay

    Another article which refers only to tariffs – nothing about the financial services passport. It’s quite clear that hardline Brexiteers believe sacrificing the UK’s only successful industry is a price well worth paying to have few less dusky faces on the streets.

    My prediction is the EU will be perfectly happy to have tariff free trade in goods – after all, as the Brexiteers point out, we buy lots of cars and wine from them. We will of course have to ensure that any goods we export conform to EU regulations. In return we will of course ensure that our own regulations mirror EU regulations (over which we will no longer have no control) – so that UK industry is not lumbered with having to produce goods to two differing standards. Nevertheless this will be promoted as being a great triumph.

    However the EU won’t allow us to retain the financial services passport. There will be some sort of sub-standard piecemeal access granted (equivalent to that granted to Bermuda for insurance for example) which the Brexiteers will trumpet as a triumph but which the bankers dismiss as not up to the job as they upsticks to Dublin or Frankfurt.

    Meanwhile we will rush to do some sub-standard trade deal with India and China which after 5 minutes of entering into we realise we have been stitched up.

  • Ken

    No John, we want a good Brexit. Sin in haste, repent at leisure …

  • Dodgy Geezer

    …As I expected, the rhetoric on the continent is changing. Yesterday the President of the European Parliament challenged the pre vote rhetoric of the Commission..

    This is where the battle royal is going to be, and this is where the delay and timelines are going to be decided. The Brits need to keep their powder dry, watch the battle, and play Article 50 at just the right point in the EU Commission vs Countries argument…

  • EppingBlogger

    The EU attitude seems more realistic and productive than from the Remainians.

    I wonder if the EU realises how condescending their remarks sound. We are the irresponsible teenager who decided to take a gap year and the family is really sorry we will be so lonely without them.

    I do hope David Davis will assemble a team who can advise him. I suggest he needs an informal advisory group so he can be ahead of the civil service and certain of his cabiunet colleagues who will try to kill Brexit.

  • Volneas

    The argument that Mr. Redwood makes is based on logic, it therefore falls short.
    The European project is not about adapting to the real world but an ideological meme developed from the European commitment to Enlightened Despotism, an oxymoronic a belief system. The push for the Common Foreign and Defence Policy to become more than just policy, as evidenced by the increasing ambition of German and EU military plans and capacities, underlines that the EU is about power, control and totalitarianism.
    The prospect of German military dominance of Western Europe should serve as a warning to the UK. Trade normally should be an important issue for policy makers, but it pails into insignificance as a priority when compared with the danger posed by European military capacity led and controlled by Germany. As Lady Thatcher saw, a united and powerful Germany, dominating the EU’s foreign and military policy is potentially as dangerous today as it was twice during the last centaury.
    As the EU destroys Europe’s security architecture, with its expansionist foreign policy, as evidenced in Ukraine, and Germany’s flooding of Syria and Iraq with small arms in parallel with a self-created migrant crisis, trade and tariffs will become increasingly irrelevant.

  • gelert

    Leaving the EU will allow us to escape the ECJ and the EU rule that members must accept decisions of the ECHR.

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