This EU Won't Work

Philip Hammond

Spreadsheet Phil has been in Berlin, attempting to persuade Germany to offer fair terms to The City following Brexit. He has given an interview with the newspaper Welt am Sonntag in which he told European leaders that rather than being afraid that a good deal for Britain would encourage others to leave the bloc they should stop “threatening members who decide to leave” and do more to keep existing members. It’s a message we’ve often stated; has he been following our blog? The bloc ought to be able to retain its “integrity” if members trust they too are getting a good deal.

Phil also told them of the enthusiasm of other countries around the world for making new trade deals with Britain, “But we don’t hear that from Europe.” Most surprisingly he accused them of only looking backwards and said, “Those of us who campaigned against Brexit before the referendum have moved on. We are now entirely focused on trying to get the best future partnership with the EU. That’s where the future lies.” Is the Conservative Government starting to pull together at last? If not we’re heading for a bad deal, or no deal.

Penny Mordant

The new Secretary of State for the Department for International Development has announced a change to Britain’s foreign aid policy. Rather than spend money on mid-wealth countries who aren’t doing enough themselves (China, Brazil, India) DfID will focus on the poorest countries, helping them develop their own industries and boosting trade with them. This is the right approach to aid, helping countries to become richer rather than sending cash that is often badly spent or stolen. It also shows a commitment to free trade rather than continuing the EU’s tariff barriers (see Access to the Single Market or Virtue is its own reward). Currently we spend lots of our aid budget via the EU’s aid agencies; we should be spending our money better. So, another Cabinet member is planning ahead for an independent policy for her Department.

Patrick Minford

Professor Minford has calculated that the UK will gain £433 billion in tariffs from the EU if there is no Brexit deal and trade falls back on WTO rules. Add the effect on UK growth and on the EU’s trade surplus with Britain, plus the fact that the UK Government has not agreed to pay a ‘divorce bill’ in these circumstances – altogether he estimates it will cost the EU over £500 billion. We know that Minford is a passionate advocate of leaving the EU in favour of free trade and we view all economic statistics with scepticism, especially in such a contentious area as Brexit, so we await the dissection of these numbers by the BBC, Financial Times and others with interest. But we could wait in vain to hear anything.

Guy Verhofstadt, (Daily Telegraph article, 13 Jan 18):

“The adherence to democratic governance is rightly one of the key criteria for EU membership and I hope it will remain a priority for the UK too.” The parliament that he represents (in fact leads) is the epitome of undemocratic non-governance: it doesn’t govern anything because it cannot introduce legislation nor dismiss the executive, the EU Commission. It could sometimes block things, like agreements with departing nations. The EU Parliament resembles the form of a democratic legislature but has little of the substance, it is a hollow chamber for debates on motions, mainly of little consequence. “it is a tale/ Told by an idiot, full of sound and fury,/ Signifying nothing” (Macbeth). The biggest vote for anything in the history of British democracy was the decision to leave this sham.

Barnier to Fox

Of course, while there is good news (the first three above) the EU continues to pursue its punishing course to protect the “integrity” of the single market, as they describe their actions. However, the truth is that they are battling to defend their market, and the whole of their project, against competition. The latest evidence, reported by the Independent, is that the new negotiating guidelines being prepared for Michel Barnier include a red line that the UK may not implement new trade deals with third countries for two years after Brexit, unless “authorised to do so by the Union”. This comes from a leaked copy of the Directives, which also has this, “The United Kingdom should continue to comply with the Union trade policy”. Last October Liam Fox, Secretary of State for International Trade, claimed that he would have many international free trade deals ready to sign “one second after midnight” on the last day of March 2019, when the UK is scheduled to leave the EU. If the Government caves in on the EU requirement to follow its rules for two years after that date then it will be very difficult for Fox to keep his promise.

Suella Fernandes (also in the Independent on 12 January)

Recently it was announced that Suella Fernandes has been appointed to a junior Brexit minister post to manage things in the event that there is no deal with the UK. Last year she said, “In the event of ‘no deal’ that’s great as well for us. The ideal is a free trade agreement but in the event of that not working, ‘no deal’ is something we will capitalise on using our strengths and the opportunities that brings.” She will join David Davis’s team and is expected to stiffen softening sinews, as may well be needed in forthcoming ‘negotiations’ with the EU, if leaked extracts (see above) are consistent with a continuing hard line from Barnier. It is possible that the EU will overreach and achieve the opposite of what it intends, by alerting other member states to the narrow, undemocratic nature of the Project; a possibility that we would welcome as it is the purpose of this blog.