March 24, 2017

Leave sceptics wrong on tariffs

It is time for politicians and corporations to be realistic, accept Brexit is happening, and accept the UK is leaving the Single Market and the Customs Union, argues Matthew Ellery.

Having enjoyed a brief hiatus, the leave sceptics are back with vengeance. Project Fear is gone, replaced by Project Doubt. The optimism of Dyson, Boeing, Amazon and pro-Brexit companies is now being ignored in favour of the pessimism of the confectionery-maker, Mars Incorporated. They are spinning the truth, misrepresenting the situation, and projecting doom and gloom without apparent reference to reality.

Mars’ President, Fiona Dawson, recently addressed the American Chamber of Commerce to the EU, delivering a Project Fear speech worthy of Nick Clegg. She claimed the price of chocolate would increase due to higher tariffs once the UK leaves the EU – resulting in tariffs of 30 per cent on confectionery, 20 per cent for animal products and over 15 per cent for cereals.

Significantly, however, the facts supporting this negative prediction are thread bear. A hard Brexit does not preclude the UK’s ability to strike a trade deal with the EU; it simply means leaving the Single Market. These are two distinct concepts. The latter sees the restitution of the UK’s sovereign powers, while remaining in the Single Market does not. Outside the EU and its Customs Union, the UK will be at liberty to sign free-trade deals across the globe – including with the EU.

The signing of a free-trade deal with the EU would include the elimination of tariffs. It doesn’t require an increase in them, and therefore Ms Dawson’s claims rely on a false premise. Neither the UK nor the EU wish to see this, as our economies are interdependent.

But, even if the UK doesn’t sign a free-trade deal with the EU, Ms Dawson prediction is still unlikely to be realised. The tariffs which she quotes are not UK tariffs but, ironically, EU ones. She incorrectly assumes a UK outside the EU would continue with the EU’s protectionist tariffs. But why would Britain wish to keep these? They inflate the cost of imports which is bad for the British consumer.

Theresa May frequently says she wants to see an outward-facing ‘Global Britain’. We can therefore reasonably assume UK tariffs would fall post-Brexit, not remain the same, thereby undermining another pillar to Dawson’s claims. We predict, with a reasonable degree of confidence, that the price of chocolate is not set to increase by 30 per cent as she predicts.

So, why is Mars making these claims? Cynics would argue it’s down to Mars’ considerable influence inside the European Union’s machinery. They have long taken advantage of the EU’s one-stop lobby shop; some estimates put Mars’ annual EU lobbying budget at a formidable 400,000 Euros.

Some large companies have an inherent predisposition towards our continued membership of the EU. It affords corporate interests the ability to lobby legislators – who are relatively impervious to the fickle nature of public opinion – on a mass scale. Consequently, a sizeable body of legislation and complex rules have been made, which themselves help to restrict new competitors from gaining access to the market. As a result, only multinational companies with large compliance departments can have the resources to conform with all these rules. This destroys competition and damages consumer choice. This benefits large corporations, but not the public at large.

Twinned with Mars’ pessimism are spurious comments from other about the Commonwealth. They argue the Commonwealth will lose out from Brexit. But this conclusion is slightly baffling, considering over 30 Commonwealth ministers came to London last week to discuss trade agreements. There is also a further Commonwealth summit due to be hosted in London next April.

Many Commonwealth countries, including Australia, South Africa, New Zealand, Canada, India, Kenya, Malaysia, Pakistan, Singapore and Sri Lanka, have already expressed their intentions to sign trade deals with the United Kingdom, contrary to pessimists’ claims.

At Get Britain Out we’re optimistic about the future. Project Fear was defeated repeatedly during the EU Referendum campaign. Its successor, Project Doubt, will be defeated too. Unsubstantiated claims about high tariffs after Brexit will be ignored. The laser-focussed obsession on the worst-case scenario will be scoffed at.

It is time for politicians and corporations to be realistic, accept Brexit is happening, and accept the UK is leaving the Single Market and the Customs Union. Focus ought to be paid to adapting in a global world, instead of the constrictions Britain endures within the EU. If companies adapt to Brexit Britain, they won’t just survive, they’ll thrive.

4.43 avg. rating (88% score) - 7 votes
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Matthew Ellery
Matthew Ellery is a Research Executive at Eurosceptic campaign group Get Britain Out. He joined the campaign in early 2016 after training as a barrister at Cardiff University.
  • Shadow Warrior

    Hammond is continuity Brown. He is a hand-wringing lefty looking for clever wheezes to raise more tax in ways that people don’t immediately notice.

  • captainslugwash

    I predict the Budget will attempt to show the Left how caring the Tories are, and it will be funded by screwing over the working man.
    If Corp Tax comes down, I bet Divi tax will be going up.
    I would love to be wrong.

  • skynine

    We really need to look at tax credits, in particular in work tax credits that encourage people to work part time to preserve the benefits. 45% of women work part time and I would hazard a guess that tax credits are the main cause. This leads to low pay, low skill work in supermarkets and the retail sector including coffee shops. The government needs to get back to the employer paying people to do a job for economic reasons rather than to get onto the tax credit ladder. Like all government benefits it distorts the market and diverts government expenditure into non productive areas.
    The refrain that the government has cut expenditure is not true, it increases every year as more and more goes into welfare.

  • MrVeryAngry

    fat chance

  • MrSauce

    So, when wouldn’t we want a ‘budget for growth’?

  • Rob

    I note that the UK Government has just slapped on a 25% tax charge for anyone moving abroad and wishing to move out their private pension from the UK.

  • SonofBoudica

    The Remoaners will do their utmost to sabotage the Government’s negotiating position. They do not want a successful outcome; they want a failure. They want to be able to scream “Told you so!” from the rooftops.

  • EnglandLaments

    Thank goodness for Andrew Neil, the one media hack who scares the pants off the established politicians. He was spot on with Heidi Allen!

  • joshuafalken

    I had a very long, hard, studied and considered look at the hope, care and aspirations of all Europeans, before I voted to get the UK out of the toxic grasp of Brussels.

    The European Union and it’s charge of “ever closer union” has borrowed and spent its way to oblivion, whilst enslaving the working and middle classes in debt.

    The central control mantra of the unaccountable Brussels ruling elite, delivered through a mixture of socialism, globalism and corporatism is entirely responsible for the populist revolt by the millions of “Just About Managings” across Europe.

    We must remember the ultimate goal of socialists, globalists and corporatists is control, not prosperity. see https://mises.org/blog/goal-socialists-socialism-—-not-prosperity.

    Social equality and economic growth always fail under central control and fighting against the Brussels doctrine on behalf of all Europeans is why I voted for Brexit.

    Britain has a long history of helping Europeans depose tyrants and Brussels is just the latest incarnation.

    Britain is the most racially advanced and accepting society on the planet. We welcome those in need and those that can help us with open arms and a smile; that will not change.

    We are also one of the most innovative, talented and open societies in the world, which why everyone wants to live here. However, we cannot fit everyone in, so we have to have clear, balanced and fair immigration policy which is where the arguments start between the monetarists and humanists will never be reconciled.

    I thought long and hard before coming to the conclusion that leaving the EU was in the best interest of all Europeans, as Brussels is toxic and cannot be reformed from within.

    Also, I find it insulting that people who voted Remain have insufficient faith in British ingenuity, compassion and skill to get a good deal for us and see the Europe that we love get a better deal from Brussels and the reform that European people deserve. https://mishtalk.com/2017/03/29/bad-brexit-deal-better-than-no-deal-mathematical-idiocy-odds-of-no-deal/ and https://www.worldheadlines.info/2017/03/after-brexit-9-reasons-to-be-bullish-on-great-britain/

    The politics of left verses right are dead because neither have delivered the promised economic growth and social mobility for anyone, but themselves. The populists are not selfish per-se, they just want to take back control of their own destiny that left/right politicians have freely given away and/or exploited for their own ends. In my constituency, the local residents group are taking over the councils as politicians ignore voters, so Westminster should beware of the well-organised, local resident independents at the next election. This is a peoples revolution which should be shouted from the rooftops, but liberals remained deafened by the socialist, globalist and corporatist “vested interests” that have spectacularly failed us and are obediently crying foul and fake.

    There will be an initial unpalatable inflationary cost to fighting globalism and rolling back central control that few appear to have factored in, but dismantling failed left/right vested interests should eventually free libertarian socially-conservative capitalism from the shackles of TBTF corporatism to feed economic growth and social mobility.

  • agdpa

    The EU usually makes the wrong decision – on immigration, on freedom of movement, on the euro, on the Ukraine, etc. etc. Little hope it will get Brexit right.

  • brownowl

    Eh? Reference please!

  • Neil2

    Sod caring. Screw the spongers and breeders. Kill HS2. Stop all “green” subsidies. Slash “foreign aid” and walk away from the EUSSR with immediate effect.

  • Rob
  • John C

    What a confused article. It conflates surveillance by the security services with poor defences against fraud.

  • John C

    Err, it’s the UK that’s leaving the EU, not vice versa.

  • John C

    Me, now. ‘Growth’ is a manic obsession.

  • La Face Nord

    Mr Redwood – are you aware of the Biased BBC website? It’s been exposing their agenda for a long time, but I imagine you’ve been well aware of the BBC’s agenda for quite some time…

  • Contact Rvtech

    The post is great

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