Open letter to Sir Andrew Cook

Dear Sir Andrew

I wish you and your business every success. I was pleased to read on your website that the initials of William Cook also stand for “World Class”. You are right to be proud of your family company’s achievements and to be concerned for the welfare and future of your workforce.
As a donor to the Remain campaign and to the Conservative party you will know that donations do not buy influence or change of policy. Donations are made to support causes and parties the donor wants to support. I am glad you have in the past chosen to support the Conservative party, and hope that when we approach the next election you will once again see that the Conservatives offer the best policy proposals that can work for everyone, including successful family business owners. It would never be right for the Conservative party to change policy just because someone who granted it money wanted it to do so. It would be especially wrong to do so in defiance of a large vote by the UK electorate to leave the EU following a long and thorough campaign where all the arguments were fully exposed by both sides and poured over by experts.
Listening to you this morning, your main worry appeared to be a possible loss of exports orders to customer companies on the continent when we leave the EU and its internal market. You will recall that both the Remain and the Leave campaign were clear during the referendum that a country cannot stay in the so called single or internal market if it is no longer a member of the EU. You will also recall that other member states and the Commission have explained endlessly that if a country is in the single market it has to accept freedom of movement, budget contributions and ECJ control over our laws which the UK electors expressly rejected. Inside the EEA the UK would not be allowed to negotiate free trade agreements with non EU countries, one of the bonuses of our departure.
The good news is we have reason to suppose we will retain good access to the markets of the continent when we leave the EU. 160 other countries around the world trade with the EU, some of them very successfully, without being members of the single market. Many individuals and companies in the rest of the EU are keen to retain open tariff free access to our market, as they sell us so much more than we sell them. If we all unite to offer the rest of the EU a friendly continuation of current tariff free trade they might, after some huffing and puffing, conclude that they should accept as it is strongly in their interest.
If by any chance our former partners are swayed by mean spirits to seek revenge at their own expense for our departure, then we can trade well with their companies and people nonetheless under WTO rules. The average tariff is only 3.5%. Half of all goods will remain tariff free. You were worried that such a tariff would prevent your sales. The pound has fallen 18% from its peak in July 2015 til today against the Euro. Most of the fall occurred well before the vote, but it is down 4% since its low in April 2016. Even this modest fall since the vote exceeds the amount of the tariff, so UK products will still be cheaper than in April and considerably cheaper than in July 2015. I am sure given your world class products and the greater pricing flexibility you now enjoy you will continue to sell to your customers on the continent, whatever the eventual outcome on the basis for our trade with them.
As someone who has in the past led industrial companies selling onto the continent as well as worldwide,I can see no great problems in leaving the EU and its internal market whilst retaining decent access to it under a special agreement or under WTO rules. I was used to dealing with long supply chain issues ranging across EU member states and non member states from a UK base. We were always able to use companies for supply from outside the EU without special problems and often did so where they had good quality, technology and were price competitive.
I do wish you and your employees every success in exploiting the more competitive level of our currency, and adding to your capacity to sell worldwide in these conditions.

Yours sincerely

John Redwood

(I am publishing tomorrow’s blog early as it seems to be topical with the media)

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140 Comments

  1. Denis Cooper
    Posted January 7, 2017 at 12:51 pm | Permalink

    Well said.

    I would add that rather than trying to put pressure on the UK government Sir Andrew and others should be pointing out to the world at large that any EU decision to deliberately and unnecessarily disrupt the existing easy two-way trade between the UK and the other countries would run directly contrary to several provisions in the EU’s own treaties, and to its supposed support for greater trade facilitation through the WTO, and to its supposed support for the UN which has a prohibition on the misuse of economic sanctions by one member state for the political coercion of another member state.

    The fact that leading EU figures have had no compunction about uttering public threats against the UK if it should choose to reclaim control of its immigration policy is just another proof that ultimately they cannot be trusted to act in good faith on anything, they are hypocritical and untrustworthy, and the last thing we should do is to allow them to play any role in the government of our country or the determination of our laws.

    • turboterrier
      Posted January 8, 2017 at 10:16 am | Permalink

      @ Denis Cooper

      The fact that leading EU figures have had no compunction about uttering public threats against the UK if it should choose to reclaim control of its immigration policy is just another proof that ultimately they cannot be trusted to act in good faith on anything, they are hypocritical and untrustworthy,

      The same applies to Empress Nick of La La Land. No matter what she has been given , there is always the Independence threat for more. Slowly the tide is turning in Scotland as the ineptness of her party and their policies and particularly her leadership (or lack of it) in the major areas of NHS, education, energy and police are having a draconian effect on the country. At the end of the day she is leader of a devolved parliament and has proved time and time again that the powers given are not being applied as the constant drive for Independence consumes her and her party’s every waking hour

      • Know-dice
        Posted January 10, 2017 at 9:46 am | Permalink

        As we all know, she doesn’t have the powers to call a referendum in any case. I ‘m surprised that in the many Sturgeon loving interviews on main stream television that no one has pointed this out to her…

    • Tad Davison
      Posted January 8, 2017 at 12:11 pm | Permalink

      Denis,

      I have been arguing these points ’til I’m blue in the face!

      Yet no matter how powerful or irrefutable the argument, there are those who refuse to accept them, and that brings me back to the conclusion that there must be something else at play – some ulterior motive. And I freely confess, I jut don’t get it. I cannot see what could be more important to the British people than their right to self-determination, and the prosperity we could gain from leaving the EU.

      It troubles me that captains of industry are hobbled by the idea that to succeed, they must cling to their EU comfort blanket, and not be able to see the massive opportunities we can create for ourselves outside this ridiculous institution that is doomed to failure and decay.

      Tad

    • Hope
      Posted January 8, 2017 at 1:20 pm | Permalink

      We read today Cameron had dinner with Sir pro EU Ivan before Christmas, was this to seek an assurance that Cameron would not be humiliated over his failure to negotiate anything of substance from the EU through Sir Ivan or to ask him to remain silent because it would be ever so embarrassing for Cameron that Sir Ivan was not meant to achieve anything? Why would Cameron want dinner with him rather than all the rest, the Queen holds dinner for all of them?

    • getahead
      Posted January 8, 2017 at 7:41 pm | Permalink

      Well said yourself Denis.

    • hans chr iversen
      Posted January 11, 2017 at 9:24 am | Permalink

      John,

      It is rather sad that you as a former business man forget to talk about technical and standard barriers which are much more important than local tariffs and are therefore a much larger barrier to trade then customs tariffs.

      However, having followed you for a while we all know that you are usually slightly superficial with the facts that really matter.

      So, once again yo argue without the necessary facts and figures from your point of view.

      Reply As a former business man I do not believe there are or will be technical and standard barriers that will cause problems. Name them and explain how and why it will be difficult once we are out.

      Why John?

      • libertarian
        Posted January 11, 2017 at 8:06 pm | Permalink

        I take it Hans that you’ve never run a business or exported goods?

        Anyway to answer your question.

        The technical and standards regulations have been met for the last 40 years as members of the EU. We also comply with USA , China, Russia etc etc technical and standards regulations when we trade in those countries. Complying with local regulations is what we do when we export goods its part of the everyday business of exporting…..

  2. Ian Wragg
    Posted January 7, 2017 at 1:04 pm | Permalink

    I assume this is William Cook Engineer’s.
    I have looked at the company profile and if it’s as good as it says then I see no advantage of the single market.
    The fact a donor wishes to overturn the result of the referendum for the sake of a middle ranking company is disgraceful.

  3. Mark Watson
    Posted January 7, 2017 at 1:13 pm | Permalink

    Someone also needs to point out to this chap that the single market has boosted the UK economy by less than 2% of GDP over the last 20+ years.And this doesn’t include lost opportunities due to our not being able to conclude fta’s outside the EU. I think Dennis Cooper posted a recent study which showed only a 1% boost-if you read this Dennis could you repost that link please?

  4. Lifelogic
    Posted January 7, 2017 at 1:35 pm | Permalink

    Indeed. I too am confident it will be better for businesses such as his (and indeed mine) outside the EU, albeit perhaps after a short period of adjustment. Indeed new oportunities will open up as well when we get out of the common import tariffs. Certainly it would be rather worse under the tax borrow and waste, greencrap, interventionist, politics of envy dopes of Labour or the Libdims. Though it is true that with Cameron and Osborne (the IHT ratter, sugar tax pusher, landlord and pension pot mugger and central national wage controller) there was really not that much difference. They were just socialists light just not quite so dire but rather dire never the less.

    If T May and P Hammond can be persuaded to actually turn into real conservatives, to go for cheaper energy, to have fewer market interventions, bring in easy hire and fire, a quick clean Brexit, a bonfire of red tape, fewer daft vanity projects, lower simpler taxes, get competition in banking and have far less government waste then things will be far better still.

    This currently look like rather a big “if”, given the dire way she has started off. Hopefully on Monday Mrs May will finally say (and perhaps even start to do) something sensible and pro business.

    D Trump is not yet in office but he is already having a very positive effect on the US confidence. In nearly six months the May government has done nothing much at all. What little is has done (or said) HS2, Hinkley, workers on boards, gender pay reporting, the Autumn Statement, the sugar tax, the continued ratting on HS2, the continued increases in taxes, rates and regulation …… has all been bonkers and nearly all negative.

    • Lifelogic
      Posted January 8, 2017 at 7:04 am | Permalink

      The Sunday Telegraph suggest that T May is moving to the Shared Society rather than Cameron’s Big Society. She sounds more like Ed Miliband than a proper Tory. At least she has not said she want to “Make Britain Whole again” as yet!

      Why is she totally unable to address the real issues? The bloated incompetence and endless waste of the state sector, the urgent need for cheaper energy, the need to get out of the EU cleanly and as soon as possible, the need for a bonfire of red tape, the need to scrap the pointless vanity projects like HS2, lower simpler taxes and easy hire and fire.

      Surely it is clear now that she too is just another dire broken compass lefty just like Cameron and Osborne. Indeed almost closer to Ed Miliband even. Why oh why did Gove knife Boris?

      • Lifelogic
        Posted January 8, 2017 at 7:17 am | Permalink

        I assume T May will also say nothing about the dire NHS crisis either. It can never work as currently run, it is killing thousands and treating other appallingly. As the Red Cross puts it a humanitarian crisis. More like mass death and suffering through gross negligence and incompetence.

        Her policy seems to be distraction from the real issues, to push lefty drivel and make vacuous statements of the obvious. The state is the problem dear not the answer.

  5. fedupsoutherner
    Posted January 7, 2017 at 1:54 pm | Permalink

    Fantastic letter John. Oh, please, why aren’t you our PM?

    • Village Circle
      Posted January 8, 2017 at 1:54 pm | Permalink

      fedupsoutherner : Coz he’s ours – “Hands Orf””

  6. Dr Andrew James
    Posted January 7, 2017 at 1:55 pm | Permalink

    Your excellent post makes one consider why the main stream media rarely if ever mention these points or that the ‘Economists for Brexit’ forecasts have proven correct.

  7. Prigger
    Posted January 7, 2017 at 2:00 pm | Permalink

    “I was pleased to read on your website that the initials of William Cook also stand for “World Class”.”

    Clicking “News” on the website opens up a page, second item down, no date ( Actually it was 1st December 2016 when our ex-Chancellor Mr Osborne visited the factory of Sir Andrew Cook accompanied by another ex-minister Lord O’Neill who resigned from Mrs May’s Cabinet around 23rd September 2016. The foundry/factory in Leeds is far across the country from Osborne’s constituency and far away from Manchester where Lord O’Neill takes his title Lord Gatley. It is anyone’s guess why ex- Chancellor Mr Osborne and an EX-Northern Power House Minster would be in Leeds, really.
    Anyway they met Sir Andrew Cook and doubtlessly he explained to them what a train rail is.
    Less than four months after Lord O’Neill’s resignation, and less than one month after the meeting of Osborne and Lord O’Neill with Sir Andrew , Sir Andrew is in the news.

    Mr Osborne should build on his new knowledge of what a rail is and learn that we voted Leave!

    • Mark B
      Posted January 8, 2017 at 12:28 pm | Permalink

      Great post !

      And someone should explain to them all what a train wreck the EU is.

  8. Antisthenes
    Posted January 7, 2017 at 2:05 pm | Permalink

    We have tendency to make judgements and assumptions based on little, anecdotal or no evidence. This is never more apparent than in the debates surrounding Brexit. Worse even is the most knowledgeable of those who have gained that knowledge by detailed and empirical research congregate they find they have differing interpretations of their findings and still be bereft of sound judgement. It is therefore a mystery why any of us ever make a sound judgement especially as evidence suggests that we rarely do when it comes to matters that are important. The saying “more by luck than judgement” is a truism more often than not. We survive this handicap because their are a few not many but obviously enough or we would not still be here who exercise a clarity of thought and are therefore capable of sound judgement that mitigate the worst effects of our bad judgements.

    A clarity that can instinctively see the debilitating consequences of pursuing a particular objective or in one that has already been pursued. Usually their clarity is ignored as it was with many things appertaining to our membership of the EU and it still is on our energy policies, the role of the state and many more. Clearer thinking emerges from time to time. The vote to leave the EU and the rise of populist parties are examples. Clarity of thought did not achieve it that in fact was muddled thinking but it did clear the way. As it is closed thinking that is trying to hold them back. Leaving the EU will lead to much needed improvements. The rise of populist parties will not lead to much material improvements if any but will at least shake the progressive and left establishments out of their cosy lethargy and perhaps make them consider their constituents more than themselves for a change. Perhaps that is a forlorn hope and we will be saddled with the likes of Corbyn and Le Pen(I was going to add Trump but at least he is not Clinton and he is yet to be judged). Even if that is so it would be transitory and the prospect does not appear likely.

  9. forthurst
    Posted January 7, 2017 at 2:08 pm | Permalink

    “I do wish you and your employees every success in exploiting the more competitive level of our currency, and adding to your capacity to sell worldwide in these conditions.”

    According to the latest published accounts (15 months) in which “any impediments to access to the Single European Market” is given as one of five business risks, of group turnover of 64.8m, UK was 38.7m, Europe 21.3m, N. America 3.4m, RotW 1.3m ( loss of China trade noted).

    William Cook website displays a multitude of high precision castings for different industries and it is doubtful that they could not be extremely successful in exporting to all countries with an engineering industry.

  10. Ian Jones
    Posted January 7, 2017 at 2:12 pm | Permalink

    Well said Mr Redwood. That was a world class dressing down, I’m sure Sir Andrew is feeling well and truly chastised.

    • Richard1
      Posted January 7, 2017 at 7:01 pm | Permalink

      Sir Andrew owns 100% of his business so it’s up to him if he thinks it’s best to withdraw funding from the Conservatives. (Would Corbyn and his neo-Marxist henchpersons – the alternative – be better for business??). There is a similar current appeal by The CEO of Innocent and other business leaders in the FT to remain in the single market. Labour, Liberal, and pro-remain Conservative politicians also argue that we should accept the result of the referendum but remain in the single market and the customs union. What is frustrating from the point of view of useful public debate is BBC interviewers never then seem to ask such people whether they are therefore in favour of: 1) continued £10bn overseas aid to EU countries, 1/2 of it on subsidies to farmers to keep food prices high; 2) continued uncontrolled and unlimited immigration from EU countries; 3) continued suzerainty of EU institutions over the UK Parliament, courts & laws; and 4) abjuring any freedom for the UK to negotiate free trade deals with non-EU countries. Maybe the answer is yes in all cases – but politicians like Labour’s Alan Johnson and the Conservatives’ Anna Soubry should be required to be clear about it.

      • Tad Davison
        Posted January 8, 2017 at 12:33 pm | Permalink

        But Richard, this is the BBC we’re talking about. As I see it, they have but one interviewer worth their salt – Andrew Neil – and it wouldn’t surprise me to learn that the neo-liberals were out to remove him too.

        Tad

  11. Madame
    Posted January 7, 2017 at 2:28 pm | Permalink

    I see The Rt Hon George Osborne follows the money judging by his Tweet. I’m not sure I would prefer him to Mrs May as Prime Minister. He suffers the same malady as the Bank of England in not comprehending basic economics. Affable smile though and the Twittersphere would be far less amusing without the many references to him and satirical cartoons about his alleged predilections 🙂

    “George Osborne ‏@George_Osborne 1 Dec 2016
    Train parts made here at William Cook foundry nr Leeds are exported to Europe.Advanced manufacturing = a key strength of #NorthernPowerhouse”

    • Lifelogic
      Posted January 7, 2017 at 5:08 pm | Permalink

      Osborne is even more dire than the dithering T May. I am still just about giving T May the benefit of the doubt, she might just become a real Conservative I suppose but show no sign yet.

      Osborne however was dishonest, economically illiterate, IHT ratting, pension pot mugging, landlord mugging, tax increasing, debt doubling, central wage controlling, sugar tax introducing, lefty interventionist, incompetent. He even backed HS2, greencrap subsidies and Hinkley. He wanted to prevent any EU referendum too. He should resign and vanish from the stage.

      His budget threats and house price fall prediction designed to deceive the electorate were a total outrage.

      We will almost certainly be far better of economically out, if he were competent he would have been able to see that.

      • Lifelogic
        Posted January 8, 2017 at 7:40 am | Permalink

        http://www.telegraph.co.uk/news/2017/01/07/determined-build-shared-society-everyone/

        Is this lefty drivel really the best Theresa and her team can come up with, at this pivotal moment in the UK’s history? She is becoming a complete joke.

        She sounds even worse than lefty, green crap, tax borrow and waste Cast iron Cameron. She is almost an Ed Miliband in drag or even a dire, dim lefty Vicar or a C of E Bishop.

        • Mitchel
          Posted January 9, 2017 at 10:40 am | Permalink

          We’ve had ,in succession,the Messiah,the son of the manse,I’d like to be the Messiah too and now the Vicar’s daughter.How long before,in the interests of diversity,we get the mate of the mullah or the cousin of the Caliph to guide us?

      • Lifelogic
        Posted January 8, 2017 at 7:49 am | Permalink

        I have just finished the excellent though long “All out War”, detailing the great referendum victory to win back U.K. democracy. If we ever do under May that is.

        It is excellent detailing as it does all the very many ways that the dire Cameron government tried and often succeeded in sloping the pitch and deceiving the voters. Also the many battles in the leave side.

        It was a very close thing indeed. Without the appalling deal that Cameron came back with, without Cameron’s arrogance, with a yes no question, without the purdah period, without Dominique Cummings who knows?

      • Lifelogic
        Posted January 8, 2017 at 8:05 am | Permalink

        http://www.telegraph.co.uk/news/2017/01/07/facts-bbc-leaves-climate-change-important/

        Surely it is time for the BBC’s climate alarmist in chief Harabin to be fired, he is a (words left out ed) Catz, Camb. English Graduate. Could they not at least find a sensible scientist or engineer to do the job. Someone with at least some actual understanding of the real issues.

        This rather than just a believer and pusher of the climate alarmist exaggeration religion? Do the BBC not have some duty to be balanced? Not that they ever are on any issue at all in my lifetime.

      • Richard1
        Posted January 8, 2017 at 9:46 am | Permalink

        I think T May should have the benefit of doubt. She has a majority of 12 and the main issue facing her is article 50. Remember Mrs Thatcher was v cautious at first, apart from the abolition of exchange controls the first real radical move of the 1979 govt was the 1981 budget.

        • Lifelogic
          Posted January 9, 2017 at 10:36 am | Permalink

          But the things does actually say or do such as HS2, Hinkley, gender pay drivel, the greencrap, the sharing society, the dire autumn statement, forced workers on company boards ……. is all so very wrong headed. She might as will be Ed Miliband.

      • Lifelogic
        Posted January 8, 2017 at 9:59 am | Permalink

        Ken Clark this morning seems to think there is a zealot crusade to leave the Continent of Europe (not just the EU so we will need quite a few JCBs) and he also refers to the EU referendum as an opinion pole!

        Thank goodness he is finally retiring and let’s hope he does not end up frustrating UK democracy from the Lords after he has. Basically he want to stay in the customs union and the single market, so essentially he want to ignore the referendum and just stay in the EU. Under May I suspect that is the, rather slow, direction of travel.

        • getahead
          Posted January 8, 2017 at 7:57 pm | Permalink

          If we stayed in the single market that would be the same as remaining in the EU which the majority of voters voted against. If May gave in to the undemocratic elitists that would be utter treachery. The Tory party would not survive it.

    • Roy Grainger
      Posted January 7, 2017 at 6:30 pm | Permalink

      Northern Powerhouse ? What’s that ? He’s like a 1970s pop group touring with its greatest hit.

      • Mitchel
        Posted January 9, 2017 at 10:43 am | Permalink

        “The final countdown”*

        which,I believe,was by a band called “Europe”

        * let’s hope!

  12. turboterrier
    Posted January 7, 2017 at 2:37 pm | Permalink

    Well said John.

    People like him do this country and himself and his workers no real favours when they show their darker side of using veiled threats and possibly blackmail.

    Who the hell wants to do business with a man like this?

    Makes one think about what really happens on the shop floor.

    He cannot complain his donations got him to kneel before the Queen for the tap on the shoulder.

  13. Timaction
    Posted January 7, 2017 at 2:43 pm | Permalink

    Sir Andrew should look up and study the words sovereignty, democracy, patrician!

  14. Timaction
    Posted January 7, 2017 at 2:44 pm | Permalink

    Patriotism!

  15. S Duckett
    Posted January 7, 2017 at 3:00 pm | Permalink

    How true
    Shows how a company is driven by greed

    • libertarian
      Posted January 7, 2017 at 4:54 pm | Permalink

      Its got nothing to do with greed

      His company would actually be better off outside, its driven by politics, its the same with other Remain corporate leaders. Staying or going isn’t about business, trade or revenues its about power and influence

      • turboterrier
        Posted January 8, 2017 at 10:25 am | Permalink

        @ libertarian

        Absolutely right.

    • Lifelogic
      Posted January 7, 2017 at 5:22 pm | Permalink

      No a company is not usually driven by greed. But clearly you do have to compete and make a profit to expand and to avoid going bust (unlike the state who can be totally useless for years on end.

      Also you need to spot changes in the market and react to them. It is more of a competitive game than greed that drives them.

      Many owners have all they need personally already anyway, other than perhaps the money to buy the next business or expand the existing one.

      • Lifelogic
        Posted January 8, 2017 at 12:15 pm | Permalink

        Many owners could easily retire comfortable but often prefer to work long hours to expand their businesses and protect their workers jobs.

  16. DaveM
    Posted January 7, 2017 at 3:04 pm | Permalink

    It certainly is topical with the media. Particularly the BBC which appears to have reverted to its June 16 status, ie, broadcasting the Guardian and embarking on a new project fear regarding the Single Market.

    They gave excessive coverage to Ivan Rogers, Jamie Oliver, and of course Sturgeon’s bribery attempts, yet no coverage of Cable’s uncharacteristically eurosceptic New Statesman article. When is the D of Culture going to do something about this unashamed bias?

    • Lifelogic
      Posted January 8, 2017 at 12:32 pm | Permalink

      Under the ex(?) remainer and lefty May I doubt it will be addressed, but we shall see. When Cameron appointed Lord Patton to the BBC it was finally very clear he was working with a broken compass.

      It is fairly clear that May is heading (slowly) in the wrong direction already as well, but perhaps she can be made to see sense.

      Getting the BBC to be more balanced, less lefty, less climate alarmist, less pro more tax & more red tape, less pro the dire NHS, less pro EU and less pro an ever bigger state is vital for a sensible UK democracy.

  17. Denis Cooper
    Posted January 7, 2017 at 4:03 pm | Permalink

    Here’s a 2012 EU report issued in the name of Michel Barnier, photo included, who has now been nominated as the EU Commission’s lead for the Brexit negotiations and may in due course become the EU’s overall chief negotiator:

    http://ec.europa.eu/internal_market/publications/docs/20years/achievements-web_en.pdf

    “20 years of the European Single Market”

    The most interesting claims are on page 13, under

    “Main Macroeconomic achievements and impact”:

    The collective GDP of the EU member states in 2008 was 2.13% higher than it would have been if the Single Market had not been launched in 1992.

    Over the same period, the Single Market helped to create 2.77 million new jobs, a 1.3% increase in employment across the EU.

    Interestingly those meagre improvements in GDP and employment correspond to a much larger increase, as a fraction of GDP more or less a doubling, in the volume of intra-EU trade in goods – in other words, a lot more stuff is being shipped around within the EU but that has not actually made the inhabitants significantly more prosperous.

    This report does not try to gauge how the benefit has been distributed across individual member states, it is another source which suggests that for the UK the gain had been below the average, more like 1%.

    But whether it is 1% or 2% of GDP this is a very small mess of pottage*; some may be dipping into it more than others, but overall we are not getting much out of it.

  18. Duyfken
    Posted January 7, 2017 at 4:11 pm | Permalink

    I like the implied “WC” side-swipe!

    • Mark B
      Posted January 8, 2017 at 1:05 pm | Permalink

      I am sure our kind host will be ‘flushed’ to read that 😉

  19. E.S Tablishment
    Posted January 7, 2017 at 4:21 pm | Permalink

    Sir Andrew has not planned ahead.

    Even if, even if ( my repetition is sounding like a politician ) even if there had never been a referendum and Tweedledum and Tweedledee Cameron and Osborne had remained, the EU would still be unlikely to survive in its present form.

    Why do people, well I know…we are so arrogant and self-centred we British.Yes we are! Let’s admit it. We think only WE in the EU have major problems with the EU.

    It doesn’t matter for some of the nation-states about having their own referendum. They will fight their corner to the destruction from within the EU and get as many benefits from it as they stand on the upturned EU ship’s hull. They are recipients of welfare. They will continue to the end.
    But there would not have been much work for William Cook. It is over! The gravy train is over! The parrot is dead! We’re leaving!
    Interesting seeing UKIP unashamedly going the way of a financial doner. But few will vote for them . Watch the next by-election in Copeland.

  20. G Mair
    Posted January 7, 2017 at 4:33 pm | Permalink

    Well said John. When will people like Sir Andrew start looking at the positive elements of Brexit and stop knocking the resilience of this country.

  21. Bulldozer
    Posted January 7, 2017 at 4:40 pm | Permalink

    The Americans, of course, are not in the EU. Their companies self-admittedly piggy-back as they call it on our companies to gain access to the EU and world markets without announcing their Americaness for they feel their American brand is disliked in some quarters in Europe and in the world. So why has not the William Cook company acted similarly, in advance, to protect itself from adversarial activities by the EU?
    Perhaps some companies lacking creativeness should in fact go to the wall. A government cannot spoon-feed mature enterprises.

    • Sir Joe Soap
      Posted January 7, 2017 at 10:31 pm | Permalink

      Unfortunately some governments in Europe and elsewhere do spoon-feed their enterprises in some heavy engineering sectors. This company is slightly unfortunate in its history and being tied to these sectors, where there was great potential in the days of Watt and Stephenson, but the world has moved on. The UK is spending hugely on rail and nuclear but frankly, if W Cook can’t grab a piece of this action because HMG is buying elsewhere and there is no offset programme, then they just have to migrate to other sectors as a business. The days of lobbying politicians for a part of the cake for your UK business are, we hope, over.

  22. Sir Andrew
    Posted January 7, 2017 at 5:01 pm | Permalink

    Thank you for your concern, Mr Redwood. Tariffs are of no concern to me. Non tariff barriers are of huge concern to me. Since you seem ignorant of the costs they impose on businesses, hugely increased if we leave the single market, I think your advice is not helpful to me. I respectfully add that the single market was not on the ballot paper last June so you should cease your false claims about the UK having decided to leave it. But I do appreciate your concern.

    Reply Thank you for your respnse. What non tariff barriers do you anticipate? Do you experience these on yoyr non EU trade at the moment?

    • Sir Joe Soap
      Posted January 7, 2017 at 9:58 pm | Permalink

      First, the single market was on the ballot paper. It was carefully and rationally explained by both sides of the referendum campaign that membership of the single market involved free movement of people. The two were and are inseparable.

      Second, I am unclear as to exactly which “non-tariff” barriers you are talking about. None of my Swiss suppliers or business colleagues in the engineering industry talk of non-tariff barriers in exporting to Germany or other EU countries. You seem to be supplying primarily the automotive and rail industries. The former of these is very international in outlook, and very cost-conscious. I doubt you’ll face any barriers here; indeed your European colleagues must currently be envious of your ability to cost in £ sterling but sell in Euros. I suspect the rail business is a different kettle of fish, where political decisions have influenced the course of the UK industry over the past decades, and frankly you might have been better off out, as they say, of that business. Why not re-focus your business on the growing areas of additive manufacturing, advanced automotive work etc.? We have some great creative engineers in the UK now, (see Dyson) and perhaps castings for railstock isn’t the cleverest place to rely on profits here for the long term?

      • Denis Cooper
        Posted January 8, 2017 at 11:58 am | Permalink

        The leaders of the Remain side deliberately emphasised that leaving the EU would mean also leaving the EU single market, with catastrophic economic consequences so they claimed. While leaders of the Leave side also made it clear that (very probably or certainly) we would be leaving the single market, but without any serious economic consequences so they claimed. Of course some people who voted to leave the EU will not have got that message, and likewise some of those who voted to stay in, but it cannot be claimed that it was never mentioned before they voted. Of course if we had voted to stay in the EU then we would not now have people saying “We only voted to stay in the EU, not necessarily to stay in its single market which was not mentioned on the ballot paper”.

      • Mark B
        Posted January 8, 2017 at 1:17 pm | Permalink

        Plus the fact that the EU energy directives and the Climate Change Act make energy intensive manufacturing more expensive and less competitive.

    • Anonymous
      Posted January 7, 2017 at 10:32 pm | Permalink

      Sir Andrew

      It was quite clear that leaving the EU meant leaving the Single Market. We were warned of dire economic consequences with none more vociferous than the Remain side, including the PM and notable politicians – and the US President !

      I don’t think anyone I know who voted Leave did so without trepidation. For a normal person the loss of industry if we leave vs continued mass immigration if we remain amount to similar things:

      – poverty without overcrowding (leave)

      – poverty with overcrowding (remain)

      Many are feeling the crush with mass freedom of movement already and JAMs are a manifestation of it.

      A Brexit boost would be a bonus on leaving but is by no means expected. The majority have realised that a system which runs on ‘cheap’ imported labour subsidised at root level by welfare is a false economy.

      Faithfully

      Anon.

    • Sir Andrew
      Posted January 8, 2017 at 7:37 am | Permalink

      Thank you for your reply, Mr Redwood. The non tariff barriers concern product specifications. They are a real problem in my trade with non-EU countries. They are not a problem when I trade in the single market. They will be a real problem if the UK leaves the single market.

      Thank you for your reply, Mr Soap. The single market was not on the ballot paper. This is what is known as a ‘fact’. And Mr Boris Johnson promised throughout the referendum campaign that my access to it would not be harmed at all.

      Reply When we leave there will still be a standard product specification for the EU which we will benefit from when exporting to that market.

      • Sir Joe Soap
        Posted January 9, 2017 at 6:23 pm | Permalink

        So you’re calling Messrs Osborne and Cameron liars, Mr Cook? After enobling you too? How ungracious!

      • Know-dice
        Posted January 10, 2017 at 9:53 am | Permalink

        Sir Andrew,

        You will already be making products that meet any EU requirements, so leaving doesn’t change that.

        The only other “non-tariff” barriers that I can see are an unwillingness of the EU countries to take your products, this must be a problem that you already have with the “not made here” syndrome in some of the more advanced EU countries. You should already have marketing and sales strategies to overcome that “virtual” barrier.

        There will be extra paper work but is that really a problem?

    • Richard1
      Posted January 8, 2017 at 9:52 am | Permalink

      Dear Sir Andrew,

      Are you therefore in favour of: 1) continuing to pay a net £10bn to the EU? 2) continuing to accept uncontrolled and unlimited immigration from EU countries? & 3) continuing to accept the suzerainty of EU institutions such as the ECJ over the UK Parliament courts and laws? You don’t mention the customs union, but if we remain in that I assume you would also accept the UK would have to forego any right to negotiate new trade deals?

      It could be that you say Yes to all 3 which is fine, but aren’t those the 4 main points which were debated during the referendum?

    • Denis Cooper
      Posted January 8, 2017 at 12:19 pm | Permalink

      Why should there be any new barriers, tariff or non-tariff, to the well-organised and easy two-way trade which exists at present? The UK government will not be seeking to disrupt the existing trade, and will be keen to make any practical steps not only to protect the present freedom to trade but also to further facilitate it. It is not trade with the other EU countries which the UK government wishes to restrict, but immigration from them, and there is no rational reason why that should make it more difficult for you to export your goods to them. So there is no need to fear new impediments to your trade unless you believe that the EU and the other EU member states will behave in a stupid, irresponsible and arguably illegal way, in which how tightly do you wish to be entangled with such people?

    • Mark B
      Posted January 8, 2017 at 1:20 pm | Permalink

      Further sir, the decision to leave the EU was, well at least for me, one of governance and not of economics or immigration. Therefore, business has no business in discussing how and by whom I wish to be governed. If the EU does not want to change to rules regarding the Four Freedoms, and let’s be honest they do rather tend to bend and break them when ‘they’ want, then leaving the Single Market might be the only choice.

    • James Matthews
      Posted January 8, 2017 at 6:48 pm | Permalink

      Nationalisation was not on the ballot paper when Attlee was elected, or privatisation when Mrs Thatcher was elected. Nevertheless people new what they were voting for. The referendum, being focussed on a much more narrow issue than a general election brought its inevitable consequences into much sharper focus than any such election. Senor members of both the remain and leave campaigns made it quite clear that ending membership of the EU meant ending membership of the single market and the electorate voted to leave on that basis.

      To suggest that there is no mandate to leave the single market because “it was not on the ballot paper” is shameless sophistry. No vote with a universal franchise in our electoral history has ever been so clear as to what it authorised..

  23. Colin Hart
    Posted January 7, 2017 at 5:13 pm | Permalink

    From the company website:

    “Since 2006 the group has been debt-free and cash rich, with its activities concentrated on its four main plants in Sheffield, Leeds and Weardale and its market focus on high specification, high-value added components and assemblies where engineering innovation, quality control and efficient, professional manufacturing are more important than mere price.”

    So a small tariff shouldn’t be such a problem.

    • bratwurst
      Posted January 8, 2017 at 12:52 pm | Permalink

      @Colin Hart

      “So a small tariff shouldn’t be such a problem.”

      As Sir Colin says “Tariffs are of no concern to me. Non tariff barriers are of huge concern to me. Since you seem ignorant of the costs they impose on businesses, hugely increased if we leave the single market”.

      He is spot on. Most people still do not understand these issues and potential impact and how they must be addressed to ensure brexit is a success.

  24. Sir Joe Soap
    Posted January 7, 2017 at 5:16 pm | Permalink

    This man needs reminding that he lives in a democracy, and that that leads the economy and economic policy, not the other way round. Also that funding shouldn’t buy influence – it’s too late to deny him his honour, I guess – for whatever that’s worth when so many were conferred by Cameron…

    He told The Times: “It seems to me the political tail is wagging the economic dog. There appears to be a willingness to consider the sacrifice of withdrawal from the single market, which I believe will be a catastrophe.”

    The vote was to withdraw from the single market. From his Wiki entry, he appears to be clever enough to understand that. If his business can’t adapt to that reality, he needs to adapt and grow one that does.

    • Denis Cooper
      Posted January 8, 2017 at 12:21 pm | Permalink

      Where are his grounds for saying “which I believe will be a catastrophe”?

  25. Mark B
    Posted January 7, 2017 at 5:29 pm | Permalink

    Good evening.

    Donations to the Conservative Party may not buy you influence regarding policy, but it might just get you a gong !

    One thing I would like to correct our kind on. Being members of the EEA, but bot the EU, does not prevent you from getting trade deals.

    • Denis Cooper
      Posted January 8, 2017 at 12:24 pm | Permalink

      As I understand the restriction comes from the connection to the EU customs union and common commercial policy, and it applies to Turkey but not to Norway.

  26. Gosh!
    Posted January 7, 2017 at 5:35 pm | Permalink

    Sir Andrew Cook should sell his company for the sake of his workforce, as we are still in the EU, to an EU-nation state company. As such, naturally, they will have no problem whatsoever in marketing the goods of his company within the EU now and after Brexit.
    It is obviously pointless trying to explain to Sir Andrew anything at all about business.

    • Lifelogic
      Posted January 8, 2017 at 8:31 am | Permalink

      He does not even need to do that. All sorts of alternatives are possible, he would probably be better off moving the actual heavy manufacturing to Eastern Europe or another lower cost country anyway regardless of Brexit. Especially with the increases in rates, the daft employment laws, the over high taxes and government’s very silly expensive energy agenda in the UK.

      Anyway under T May it looks unlikely that we will actually manage to leave properly. She still seems keep to present herself as a lefty, distraction ditherer who says little on Brexit or indeed anything substantive at all.

  27. Denis Cooper
    Posted January 7, 2017 at 5:51 pm | Permalink

    Here’s an interesting article by the europhile Wolfgang Munchau in the July 2015 edition of Prospect magazine, and it’s a great pity that this realistic view did not achieve much circulation during the referendum campaign:

    http://www.prospectmagazine.co.uk/magazine/would-it-actually-matter-if-we-left-the-eu

    “Would it actually matter if we left the EU?”

    “There is a case for Britain remaining a member of the European Union, but it has little to do with economics”

    Note in particular:

    “… if you look at the trend of EU-wide productivity, the single market leaves no trace … You could, of course, argue that without the single market, the situation might have been worse, but that assertion is impossible to prove. My point is that the single market is not visible in the macro statistics. What you are hearing are extrapolations from a micro perspective. Advocates of the single market might benefit from it personally, and so might their shareholders and employees. But the data are telling us a different story – that the single market is a giant economic non-event, for both the EU and the UK.”

    • Newmania
      Posted January 7, 2017 at 9:57 pm | Permalink

      This article argues that a train crash could be avoided by a transition deal and that the location of companies manufacturing in Britain was caused by the single market. It does not make any sort of case for against the single market it merely says that it has not demonstrably increased productivity .Free Trade has many huge benefits as even John Redwood seems to grasp but an effect on productivity is not one of them
      It has certainly been argued that by moving investment into trade and away from capital it prevents increased productivity .( This argument is often made in the context of slavery supporting the industrial revolution or not )

      One of the arguments of the Illiberal Elite is that cheap Labour has skewed the economy away from productivity . There is no doubt it has increased wealth however As does any resource provided better by competitively sourced supply

      Appearing in Prospect , a publication I am frankly surprised to discover that you read , this is tweak at its unanimously pre EU readership , you are too impressed .

      • Denis Cooper
        Posted January 8, 2017 at 12:40 pm | Permalink

        I’ve given the link to the article and so anybody can read it and see that it says nothing at all about a “train crash”, that is your invention.

        As far as the obvious need for transitional arrangements is concerned this is all that the article says:

        “The next privilege of EU membership is joint trade agreements with third parties, of which there are several, with a number of important negotiations still in the pipeline, notably with Canada and the US. It is technically true that, were it to leave the EU, the UK would have to renegotiate all these agreements. But “Brexit” would be subject to a detailed technical agreement that would foresee transition times and rules and privileges that continue after departure, either permanently or temporarily.”

        Of course whatever agreement is made with the EU could, should, and almost inevitably would include transitional provisions. Under the original Treaty of Rome the six countries agreed a twelve-year schedule for the gradual establishment of their Common Market. When the UK joined the EEC the accession treaty included transitional provisions running for various numbers of years, and likewise all other accession treaties.

        It would be plain stupid not to have TRANSITIONAL PROVISIONS in the UK’s withdrawal arrangements, but that is not the same as having an agreement which only takes us to an unsatisfactory TRANSITIONAL STATE state and leaves us stuck there – that is, the “permanently” case in Munchau’s “either permanently or temporarily”.

      • Denis Cooper
        Posted January 8, 2017 at 12:51 pm | Permalink

        “It does not make any sort of case for against the single market it merely says that it has not demonstrably increased productivity.”

        It says what I have repeatedly said, that the economic importance of the EU single market is so marginal that it should hardly be a consideration.

        “There is a case for Britain remaining a member of the European Union, but it has little to do with economics”

        “Then consider this: how much is the single market actually worth? Supporters usually point towards studies showing that it has had a big impact on the economy. It has certainly affected location decisions by companies, and may even have driven up trade between countries. Any goods licensed for trade in any member state can be sold without further bureaucratic hindrances elsewhere in the EU. What can possibly be bad about that?

        To understand its true impact, however, it is not enough to point out who has gained from it. One should also look at those who have not. If the single market had produced an increase in efficiency across the economy, you would have seen the effect in aggregate productivity data across the EU.

        But if you look at the trend of EU-wide productivity, the single market leaves no trace. In fact, productivity growth in the EU was in the order of 1-2 per cent a year in the late 1980s. Between 1990 and 2000 it fluctuated around 1 per cent. The average between 2001 and 2007 was 0.7 per cent, and it has averaged around zero since. It has been downhill ever since the official start date of the single market in 1992.”

        “Not only do I find it hard to make a compelling case for British membership of the EU on the grounds of the single market, I go further and reject all utilitarian arguments. Utility is hard to define, whereas “ever-closer union,” which is enshrined in the Treaty of Rome, is a matter of principle. There are, of course, very good reasons for supporting membership of the EU. But I am incapable of justifying my answer in terms of the amount of utility I might derive from it. My justification is as sophisticated as that of a three-year-old: I want it because I want it. Those who truly favour the EU do not need a reason for doing so. They just know.”

  28. formula57
    Posted January 7, 2017 at 5:58 pm | Permalink

    A commendable way of responding to Sir Cook – and much more mature and sensible than mine which as been to remove (effective before tomorrow) William Cook (a world class company) from my list of approved suppliers.

  29. Steven Smith
    Posted January 7, 2017 at 5:59 pm | Permalink

    @ John Redwood, Well said.

    I thought people might have started to grow up by now but it looks like it is going to take them a little more time.

  30. formula57
    Posted January 7, 2017 at 6:07 pm | Permalink

    Reviewing the website of my ex-approved potential supplier William Cook I see that: –

    “Persistence and determination alone are omnipotent.” – The Cook guiding principles.

    Soon to be updated to include reference to alone but with necessary help from the single market I assume.

    http://www.william-cook.co.uk/ – see foot of Home page.

  31. JR Rocks
    Posted January 7, 2017 at 6:31 pm | Permalink

    We English are too polite. This is the endgame.
    We must all take individual responsibility now.
    We are lucky, we can do it without violence.
    Don’t leave it to “them”, to “JR”, to “Corbyn”
    Use your brains, do what you can according to your own ability.
    Spread of information is key.
    Spread it beyond this blog
    Beyond Order Order
    Beyond Housepricecrashforum off topic
    Beyond Arrse
    Beyond Breitbart
    Beyond Drudge
    Beyond Vice
    Beyond DI Latest news
    Most of the above have been neutered over the last few years
    so do what you personally can.
    Start a twitter.Link it. Spread it
    Or draw the curtains, check your bank balance and turn the telly on.

  32. Newmania
    Posted January 7, 2017 at 6:55 pm | Permalink

    An important and experienced man like Sir Andrew should be taken seriously with or without contributions and if he can no longer support an anti-business anti-City fiscally irresponsible Party he deserves no unpleasant insinuations .
    John is wrong on at least two points , ( doubtless a real business man could correct him on many more.)
    Firstly he has assumed that the loss of confidence in the pound ( on each day Brexit has loomed larger) will offset the increased tariffs delays , compliance issues and loss of staff.
    This is not the case, manufacturing in this country is high end and imports materials it processes for onward export .The inflation faced by consumers will also be faced by manufacturers and in this kind of business I suspect it may well be an overall loss.
    Globally, in any case , this tiresome rhetoric hangs from sky hooks .The drop in the pound is only due to other elements in the economy doing badly. It can never be a good thing other than temporarily and locally.
    Secondly the tariffs to which Mr Redwood airily refers are not the true cost. With country of origin checks delays far more is at stake, 15% is more like the increased cost.

    Sir Andrew `s magisterial remarks are not the only time this week that knowledge of the real world and Brexit have collided and where his brief but deadly impatience with nonsense really rang true with me was when he reminded Public Sector that he has competitors .
    Sent out onto the pitch in shackles he will lose customers and as he will know, you can only hold out against structural weakness for so long . Once a switch is made you lose everything . Most companies are only a very few key events like this from going down.

    In feel very sorry for his staff and everyone up and down the country fearful for their job their home and their family . Remoaners as we are called .

    • Martyn G
      Posted January 7, 2017 at 9:49 pm | Permalink

      And are you also very sorry for the unemployed youth generation across the EU who have been wasted as a direct result of the incompetent and careless Commissioners who alone dictate as to what laws, directives et al are to be obeyed by the puppet governments of hitherto sovereign nations?
      I imagine that you must also be quite content with the UK being governed by a Parliament that is factually equivalent to a county council in terms of having no other duty than rubber-stamping all that issues from the EU? Whether or not it is appropriate or event relevant or good for our nation?

      • Newmania
        Posted January 8, 2017 at 9:40 am | Permalink

        If you would enlighten me as to how the European Union has been responisble for unemployment in parts of Europe I would be highyl interested

        • Anonymous
          Posted January 8, 2017 at 11:51 am | Permalink

          Newmania – Leaving stricken economies unable to reset their own interest rates has caused poverty and unemployment. In fact the one thing that gives the UK its economic strength is what it does *not* have in common with the EU rather than what it does.

          Hence the economic ‘refugee’ crises from the EZ which – ironically – has been the catalyst for Brexit.

          No matter how sensibly the average UK citizen votes, so long as he is a member of the EU, he cannot reap the fruits of his choices because he has to share them with those from nations who make bad choices.

          • Newmania
            Posted January 8, 2017 at 10:16 pm | Permalink

            It has always been entirely open to Greece ( let us say ) to leave the Euro or indeed the EU. It does not want to because then it would have to face the real consequences of its own economic mismanagement fiscal clown show and absurd politics Corbynite politics
            It cannot set its own interest rates and share a currency but that is its choice

            As usual you are using words you do not understand- thi si what comes of education at the University of google

        • Denis Cooper
          Posted January 8, 2017 at 12:57 pm | Permalink

          Why should Martyn G spoon feed you with information which you could have picked up for yourself if you’d paid attention?

        • libertarian
          Posted January 8, 2017 at 1:08 pm | Permalink

          Newmania

          ( A report from Economics Institute)

          In the Eurozone, there is little relief available to boost demand. Countries are unable to devalue. Monetary policy set by the ECB has been unflinching in targeting low inflation and offering little monetary easing – despite the prolonged recession. Also, depressed demand throughout the region is making it difficult to grow through increasing exports. Even northern Europe, which has had large current account surpluses are engaging in modest austerity. The result is that demand has remained depressed across Europe.

          Structural unemployment

          As well as the current demand deficit (cyclical) unemployment, EU has struggled with persistent structural unemployment for the past two decades. High natural rates of unemployment have been blamed on:

          The Euro
          Inflexible labour markets
          Generous unemployment benefits which encourage frictional unemployment.
          Geographical immobilities
          Strong labour market regulations which discourages firms from investing and taking on new workers.

          I would add to that , that 80% of economic activity is now in service based business and the EU has failed to provide a single market in services which means that the major engine of job creation ( the service sector) is not enabling the creators of those businesses to set up easily in EU regions. In fact since the Brexit vote Facebook, Google, Apple and Amazon ( the biggest non finance service businesses on the planet) have ALL announced they are moving their European HQ’s to London.

        • Mark B
          Posted January 8, 2017 at 2:07 pm | Permalink

          The Euro.

        • Martyn G
          Posted January 8, 2017 at 5:45 pm | Permalink

          Take a look at Italy, Greece and Spain (although Spain appears to be in recovery) where almost a generation of unemployed youths have fallen victim to the EU Euro mad currency scheme and ECB policies. Imagine, if you can, being a Greek shareholder or one with money in a bank having much of your money taken from you as a part of yet another bailout attempt. Cyprus citizens too, if it comes to that, so many effectively robbed of their money by those EU schemes with the effect of dragging down their national economy.

    • Peter VAN LEEUWEN
      Posted January 7, 2017 at 10:29 pm | Permalink

      @Newmania: I do agree with your comments and feel sorry for Sir Andrew Cook’s employees:
      The so-called ‘God-given’ chance to steal business from Britain is not only there for the USA but also for competitors on the European continent and not only in the financial sector.
      Does being freed from EU regulation shackles help, e.g. for UK trading with third countries? If that were the case, how come that “shackled” Germany still exports about 3.5 times more to China than the Greatest Britain now emerging after the referendum?

    • Peter Gardner
      Posted January 8, 2017 at 1:38 am | Permalink

      There are ways of avoiding the problems you mention without retaining membership of the single market (EEA or Customs Union). Our problem at the moment is not knowing what the government intends to do to address them, nor even if the government is aware of possible solutions. There is much the UK can do independently of negotiations with the EU. Some, such as migration, are not EU competences unless tied to the single market, so what is the problem with saying simply that the rules we have now for non-EU nationals will be extended to the EU member states and adjustments made by bi-lateral discussion with those states, as they are routinely and continually with every other country in the world. Personally I would have thought that the more independent policy and decision making the UK does the stronger would be its hand in negotiations so let’s make it public knowledge and get the support of Parliament, businesses and individuals.
      As for the single market itself, the EU has made at least 40 different types of deal for access to it. Everything is negotiable. Extreme loss of access is hypothetical and likely to remain so.

    • eeyore
      Posted January 8, 2017 at 7:40 am | Permalink

      Important and experienced as Sir Andrew may be, he has entered the public debate and must expect to see his views tested.

      He asserts that “non-tariff barriers” are his great concern. Because of them he wishes effectively to override the referendum result. He has been asked to explain, to assist those of us who genuinely wish to understand. So far, it appears, he has declined.

      Another comment to this post is not ashamed to argue that a man who has made a lot of money, as Sir Andrew apparently has, is ipso facto a figure of commanding authority to whose opinion we should defer. How did Thackeray define snobbery? Ah yes: “Mean admiration of mean things.” The commenter is entitled to his point of view; even so, I doubt he will find much authority worship here.

    • Richard1
      Posted January 8, 2017 at 10:02 am | Permalink

      I wonder how prosperity is maintained and increased in the 160+ Countries which are not in the EU?! There are business people on both sides of this argument as we recall from the referendum.

      • hefner
        Posted January 8, 2017 at 12:31 pm | Permalink

        Well, according to the CIA’s World Book, the number of countries outside the EU where “prosperity is maintained and increased” is much smaller than your quoted 160+ countries.
        What bout refining your argument?

        • Newmania
          Posted January 8, 2017 at 10:20 pm | Permalink

          Sudan…Yemen Trinidad Thailand all countries with whom we will share the same access to the worlds largest market of which we were formerly an important part

          Honestly I wonder if you people are on drugs or something

          • Richard1
            Posted January 9, 2017 at 12:56 pm | Permalink

            your comments are absurd. The point is there are numerous countries which are prosperous – and which trade with the EU – which are not in the EU. you have advanced no reasons as to why the UK should not be one of them.

  33. alan jutson
    Posted January 7, 2017 at 7:15 pm | Permalink

    “…you will know the donations do not buy influence or change policy…..”

    Ah but John they do !

    This man and many like him have been given knighthoods, and thus they have a very real position and ability to influence almost anything in the House of Lords.

    Such positions are usually given to the peers knowing they will support a particular political Party, thus a vote has been purchased by the Party leader.

    Your letter is excellent in all other regards.

    • alan jutson
      Posted January 8, 2017 at 12:18 am | Permalink

      Oops should have read, and eventually many seem to get lordships and enter the house of lords.

      In the meantime many get asked to help out Government by acting in an advisory role at first.

      Sir Philip Greene, Sir Alan Suger. etc.

    • Lifelogic
      Posted January 8, 2017 at 6:47 am | Permalink

      Indeed they certainly do often buy some influence. Even if only to be able to put you views to the Cabinet, or to win a place in the Lords.

  34. Mike Stallard
    Posted January 7, 2017 at 7:21 pm | Permalink

    “You will recall that both the Remain and the Leave campaign were clear during the referendum that a country cannot stay in the so called single or internal market if it is no longer a member of the EU… Inside the EEA the UK would not be allowed to negotiate free trade agreements with non EU countries, one of the bonuses of our departure.”

    This is simply not true.
    There are two pillars which support the EEA. One is, of course, the EU; the other is EFTA.
    Countries inside EFTA are certainly allowed to negotiate free trade deals with other countries and they also gain a seat at the standards organisations which are at present usurped by the EU.

    • Peter Gardner
      Posted January 8, 2017 at 1:49 am | Permalink

      You are right that membership of EFTA would give access to (not membership of) the EEA and does not preclude trade deals elsewhere. It is the EU customs union tat prevents such deals. However, the EU still legislates for the EEA and although EFTA has its own ‘court’ that is by concession of the ECJ’s recognition of its competence, ie. following EU policy, and you can bet the trend, especially if Britain were to join EFTA, the EU would designate more and more of its own legislation as applicable to the EEA. Also EFTA requires free movement although there are minor variations from full membership of the EU.

      UK needs a clean break and to take its time about future relationships, not jump straight into another that is ill-suited to UK.

      • Peter Gardner
        Posted January 8, 2017 at 2:01 am | Permalink

        oops. EFTA does give membership of the EEA.

    • Denis Cooper
      Posted January 8, 2017 at 1:15 pm | Permalink

      I see that your mentor and his mouthpiece are repeating the false claim that EFTA states are not bound by judgments of the EFTA court.

      They should look at Article 33 of the Agreement between the EFTA states on the establishment of a Surveillance Authority and a Court of Justice:

      http://www.efta.int/sites/default/files/documents/legal-texts/the-surveillance-and-court-agreement/agreement-annexes-and-protocols/Surveillance-and-Court-Agreement-consolidated.pdf

      “The EFTA States concerned shall take the necessary measures to comply with the judgments of the EFTA Court.”

    • Denis Cooper
      Posted January 8, 2017 at 1:32 pm | Permalink

      By the way, Mike, I think you should recognise that EFTA under the 2001 Vaduz Convention is not quite the same beast that it was originally when the UK helped to set it up through the 1960 Stockholm Convention.

      http://www.efta.int/legal-texts/efta-convention/detailed-overview-of-the-efta-convention

      “The European Free Trade Association (EFTA) was established by a Convention signed in Stockholm on 4 January 1960. The main objective of the Association was to liberalise trade among its Member States, and the Convention thus contained basic rules regarding free trade in goods and related disciplines.”

      “The updated EFTA Convention, the Vaduz Convention, was signed on 21 June 2001 and entered into force on 1 June 2002, in parallel with the EU-Swiss Bilateral Agreements. It included several significant changes, of which the most important was the integration of the principles and rules established between the EU and the EEA EFTA States in the EEA Agreement, and between the EU and Switzerland in the EU-Swiss Bilateral Agreements. Important new provisions included the free movement of persons, trade in services, movement of capital and protection of intellectual property.”

      http://www.efta.int/sites/default/files/documents/legal-texts/efta-convention/Vaduz%20Convention%20Agreement.pdf

      “Resolved to deepen the co-operation instituted within the European Free Trade
      Association, further facilitating the free movement of goods, aiming at the progressive attainment of free movement of persons … ”

      “ARTICLE 2

      Objectives

      The objectives of the Association shall be …

      … (c) to progressively liberalise the free movement of persons … ”

      I don’t see how the UK government could conscientiously sign up to that when its stated policy objective is exactly the opposite, namely to reimpose restrictions on the free movement of persons.

    • Mark B
      Posted January 8, 2017 at 2:09 pm | Permalink

      Mike

      I agree with you. Sadly, he isn’t listening.

  35. Jagman84
    Posted January 7, 2017 at 7:37 pm | Permalink

    “As a donor to the Remain campaign and to the Conservative party you will know that donations do not buy influence or change of policy”. Unfortunately many of us think that it does and has done so for a long time.

  36. Aatif Ahmad
    Posted January 7, 2017 at 8:22 pm | Permalink

    Do not even compare yourself to him. He is a proppa businessman. He’s built a company with a £60 million turnover. He’s so astute that the company sold assets in 2007 and paid him a £40 million dividend in 2007.

    Being chairman of some industrial company by virtue of your fund management work doesn’t even compare with this man who had skin in the game – a true entrepreneur and businessman, not a tie-wearing politician.

    Reply He inherited a family company

  37. Bert Young
    Posted January 7, 2017 at 9:03 pm | Permalink

    If the products are good and designed for specific outlets , there is little difference in switching , if necessary , to clients outside of the EU . Personally I agree with John , a 3-5% penalty , if imposed ,is peanuts and is unlikely to harm Cook’s business .

    In any event labour rates in this country are very competitive – certainly below most of the other EU countries . Steel exports are more susceptible to Chinese competition ; Cook should focus on this issue much more . I suspect he is another remain campaigner who is still smarting from the will of the people . A good businessman faces hurdles of one sort or another every day ; if Cook is confident and outward looking he will not suffer .

  38. Simple Soul
    Posted January 7, 2017 at 9:58 pm | Permalink

    Sir,

    Can anyone help with a genuine request for enlightenment on the matter of possible WTO tariffs if we ever get that far? My problem is this. On the one hand there is a consensus which I deeply respect, which includes you, Mr Redwood, that under WTO rules average tariffs on UK exports would be around 3.5% or a little higher, that is to most onlookers, something fairly bearable, or at least part of the rough and tumble of business life in any period. However, equally confident voices tell us repeatedly that the tariff on UK car exports would become 10%, which sounds more painful. How does one attempt to reconcile these contradictions?

    Reply 3.5 is the average. Cars attract a higher tariff.

    • Denis Cooper
      Posted January 8, 2017 at 1:48 pm | Permalink

      If the tariff on UK car exports to the EU became 10% then so would the tariff on the threefold greater volume of car imports into the UK from the EU, while the tariff on car imports into the UK from the rest of the world would remain as it is now, the same tariff as under the EU’s common external tariff, in the absence of any special trade agreement; which would not actually assist the UK car manufacturers to export more cars to the rest of the world, and so increase the present surplus that they run on that trade with the rest of the world, which more or less cancels out the massive trade deficit they run with the EU, but nor would it make harder.

  39. Original Richard
    Posted January 7, 2017 at 10:04 pm | Permalink

    I do not think Mr. Cook is worried about EU access or tariffs for his products for reasons already given by Mr. Redwood.

    He is likely to be more worried that he may have to train UK staff for his factories rather than employ already trained people from the eastern countries of the EU.

    I can understand that this will cause his profits to suffer but it will be better for the country as a whole in the long term to have more trained UK engineers and also better for the countries from whom he is stealing the very people needed to improve their economies.

    As well as reducing the social consequences of mass migration in one direction for both the recipient and donor countries involved.

    • David Price
      Posted January 8, 2017 at 7:35 am | Permalink

      I suspect you might be right, the William Cook website says nothing about recruitment or careers. Where Sheffield Forgemasters, for example, proudly desiribes its investment in apprenticeships the WC website offers nothing.

    • Mark B
      Posted January 8, 2017 at 2:12 pm | Permalink

      +1

      And believe me, I am in a position to know.

    • Chris S
      Posted January 8, 2017 at 2:21 pm | Permalink

      Most of the companies employing Eastern European skilled workers are doing so because they are either too lazy or too mean to fund a proper apprenticeship scheme and develop their own skilled workers.

      The key to German success in engineering is simply : engineering is a highly regarded profession there and there are numerous degree courses and apprenticeship schemes funded by employers.

      Unfortunately with the exception of places like Imperial College, engineering is looked down on by the elitist academics in charge of our education system. These people have been spectacularly failing our children for decades.

  40. rose
    Posted January 7, 2017 at 10:29 pm | Permalink

    How can any remainiac complain about a 3.5 % or higher tariff when they support 20% VAT?

    • Know-dice
      Posted January 10, 2017 at 10:07 am | Permalink

      VAT is like a drug to the Government, don’t expect it to change in any big way soon.

      Except for certain products that never should have attracted it in the first place.

      • rose
        Posted January 10, 2017 at 12:13 pm | Permalink

        I agree. It is like expecting HMG to update the threshold on IHT etc.

  41. The White Knight
    Posted January 7, 2017 at 11:36 pm | Permalink

    JR I believe you have humoured the “damsel in distress” quite enough.

    This is a big people’s world. Even the embargo of Cuba did not stop American companies accessing Cuba. CNBC, on which Lord O’Neill was a frequent guest, did a whole reportage on it.
    In any case the EU is not about to set up insurmountable obstacles/barriers to British companies. There would be tit for tat and that would not suit EU nation-state interests.

    What we are witnessing, in my view, is a mardy clique of the Conservative Party deliberately disrupting. If it well-organised we can expect a whole string of damsels in distress featuring on a regular basis in the media. Their aim may be just naughtiness. Surely Mr Osborne knows he will never be in a position to form a Cabinet including Anna Soubry, Nicky Morgan, and an assortment of Tory Remoaner MPs and erminites. There is silly and just plain daft!

  42. Trumpeter
    Posted January 8, 2017 at 6:38 am | Permalink

    Not the back of the queue. Donald’s Tweet
    “Donald J. Trump ‏@realDonaldTrump 4h hours ago
    I look very much forward to meeting Prime Minister Theresa May in Washington in the Spring. Britain, a longtime U.S. ally, is very special!
    5,685 replies 7,453 retweets 34,833 likes
    Reply 5.7K Retweet 7.5K
    Like 35K
    More”

  43. Chris S
    Posted January 8, 2017 at 10:36 am | Permalink

    I have always thought that the benefits of the single market have been grossly overstated.

    Up until the 2008 recession, we were the importers of a range of superb American-built leisure boats. The import process was simple. The boats were CE marked by the factory, a simple paper process following well established principles. Importing the boats was equally simple. They arrived by ship at Southampton and we paid the 20% VAT and duty, which was only 1.7%, prior to collection. We then claimed back the VAT but not, of course, the duty.

    The only part of the process I would criticise would be the nonsense of having to find 20% of the value on these expensive items only to claim it back a month later ! Whether or not it is in the power of the U.K. Government to waive this requirement while in the EU I don’t know but there can be no sensible reason for small businesses giving the Treasury an interest free loan for a short period with all the admin that this entailed. I would expect this requirement to be dropped as soon as we leave the EU.

    Interestingly, we could have brought the outboard-powered models of our range into the country with US-supplied Japanese engines but the duty on the power units would have been 10%. However, such is the competitiveness of the US pricing, they would still have been up to 10% cheaper even after duty had been paid ! ( We fitted the engines here only because the US warranty was 3 rather than the European 5 years ).

    I explain all this in detail because it’s the perfect example as to why being outside the single market should not be a problem for UK exporters any more than it currently is for US ones. After all, even without a deal, the rules will be exactly the same as they currently are for our friendly American manufacturer who, incidentally, successfully supplied boats direct to most major EU countries with a similar lack of difficulty.

    Of course it suited Remainers to reinforce their exaggerated view of the value of the single market throughout the campaign and losers such as Sturgeon and Clegg seem to have gone into overdrive since last June to purpetuate this myth.

    It is nothing more than Project Fear V.2.1 and will prove to be just as baseless as V.1.0 has proved to be.

    Once we are outside Fortress Europe we will be free to import goods such as our Japanese outboard motors for UK consumption at world prices rather than the much higher prices reserved for the EU. This is but one example of why we will be better off out. There are many others and, for example, I expect there will be reduction in the import of European cars in favour of more of those from outside the EU which will be available at lower world prices and without a 10% tariff barrier once we have some trade deals in place.

  44. graham1946
    Posted January 8, 2017 at 10:53 am | Permalink

    Donations do not buy influence? Seriously?

    Maybe it’s about time political donations of this sort were outlawed from rich chums and unions etc. then we could be sure about it.

    Parties should be run as businesses – if they can’t get the members, the finance and cannot hack it they don’t deserve to survive. Why is politics so very different from the rest of the world, especially when politicians claim to be business experts and lecture those running businesses on how to do it?

  45. Prigger
    Posted January 8, 2017 at 11:17 am | Permalink

    Sky News Sophy Ridge interview with Theresa May

    Sometimes you wonder which very very nice schools and extremely nice workplaces with smashingly nice people journalists and some politicians were fortunate enough to attend. Except when you read about them when their star falls and the awful decadent lifestyles hit the tabloids. Suddenly you find they are just like Jack and Jill you had to work with, had to have some form of conversation with, had to get along with or “die”. Life makes you get along, somehow, with all kinds of people .
    So Mr Trump is recorded making as best conversation he could with a young man on a boring journey. Sophy Ridge asks if that ad lib chat with a young man is important. Dumb question. But I’m sure the TV audience loved the words repeated as we are not usually privy to free-speech uncontained by hypocrisy and pc. In our society with its restrictions of free speech even a breath of foul air is life-saving as we have been drowning.

  46. E.S. Tablishment
    Posted January 8, 2017 at 12:11 pm | Permalink

    I watched Ms Sophie Ridge on my Sunday television programme. She interviewed, eventually, Mrs Theresa May.
    I must say I have absolutely no idea what they were talking about in one part of it regarding Mr Trump and what he said about women. My friend Edna phoned her sister Ethel who has a cousin who used to be in the Army and my word has he seen a thing or two I can tell you . Well, he says they were saying things quite close to the bone.
    Well they should stop it if they were. I know what girls can be like when they get together. I’ve played netball. Things which were said and demonstrated in the showers still confuse me.

  47. Little Englander
    Posted January 8, 2017 at 2:28 pm | Permalink

    Some Business Leaders FEAR moving out of their comfort zones and dread the thought of seeking opportunities outside the EEA and that shows a REAL weakness in character and lack of initiative . Given the opportunity I would think that many, many Sales Directors/Sales Managers would jump at the chance of exploring, developing and securing worldwide contracts thereby driving the business forward which would not only excite, encourage, motivate and energize them but also all the Employees within the Company. Negativity in the Board Room will one day take its toll. Good luck Cookie.
    PS: spot on Original Richard.

  48. rose
    Posted January 8, 2017 at 7:04 pm | Permalink

    The Shared Society is woollier than the Big Society, and both are woollier than this:

    “They are casting their problems at society. And, you know, there’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours.”” – Mrs Thatcher in an interview in Women’s Own in 1987.

    The PM has three very important tasks to carry out:
    1 To effect a complete Brexit
    2 To reduce non EU immigration to pre Blair levels
    3 To reduce the debt

    Why is she – or her pilot fish – casting about for extra tasks?

    • Posted January 9, 2017 at 6:43 pm | Permalink

      The last thing you want to do is reduce the debt.

      After all we have left the gold standard.

      Learn to look left on a balance sheet it is where all the assets are.

      If you want to reduce the debt. Can we start with your savings and pension first please ?

  49. Yossarion
    Posted January 8, 2017 at 7:25 pm | Permalink

    The Northern Power House was to be Funded By who?, the EUSSR Regional development Fund?, If the PM does not proceed with this project as some have indicated, it makes you wonder what companies would not have the Flat Hat filled.

  50. rose
    Posted January 8, 2017 at 7:34 pm | Permalink

    The error both this PM and the last made was to let the media convince them they must “occupy the centre ground”, “park their tanks on Labour’s lawn”, etc. This is not leadership and does not win support or respect. Face up to what is the right thing to do, and lead the public in doing that in an inspiring way. Move the centre ground if necesssary. That is what Mrs T did and she was never defeated at the ballot box, despite having the media dead against her throughout her time in government.

    • James Morgan
      Posted January 10, 2017 at 12:09 pm | Permalink

      Thats very good.

  51. Gandalf the White
    Posted January 8, 2017 at 9:01 pm | Permalink

    Not altogether sure, well,….. no idea really, why the media is on a roll with programme after Brexit extravaganza. Some last one hour. Strange! Just what is the media trying to do?
    Few, in reality, are prepared to talk about Brexit. The issue is closed amongst normal folk. My evidence? My neighbours are a great bellwether in this rock-solid Labour area. Weirdly, at the time of the Referendum and even more remarkably when Trump was up for election, they expressed defiant and strident views..pro-Leave, ( 100%, yes really, we’re like that here, not 65% ) and of Trump..much less expressed views but all were for him!
    I cannot account for the 65% Leave vote in my region. It seems far less than it should be. But no-one is bothered about a continuation of the Brexit debate. We are not divided here.

    So are we being nurtured to accept another vote? Perhaps on the terms? The powers that be should forget it. When you close a sale, never,.never go back and discuss the deal! It’s over!Pippin and the Libdafts are only tolerated because they appear not to present a threat..appear like hobbits. They should stay small.

  52. John
    Posted January 8, 2017 at 9:42 pm | Permalink

    Nice one Red!

    Did the Remainers shed a tear and lament at the loss of world trading partners when we were forced to sit in the tariff wall that surrounds the EU when we gave up our right to strike trade deals?

    Why would a ‘business person’ lament their country being given the right once again to strike trade deals around the world?

  53. fedupsoutherner
    Posted January 8, 2017 at 10:34 pm | Permalink

    Sophie Ridge on Sunday. Bring it on Mrs May. The clearest she has ever been over Brexit. I can’t wait. Is an early election not only necessary but on the cards?

  54. fedupsoutherner
    Posted January 8, 2017 at 10:36 pm | Permalink

    Off Topic

    Country File tonight. If they didn’t mention the uncertainty of agricultural subsidies after Brexit once, they mentioned it four times. Are they ever going to stop giving out negative comments?

  55. End to elected mayor
    Posted January 9, 2017 at 9:54 am | Permalink

    My TV is just now showing Mr Khan. He looks distraught, actually. He is saying how his record is better than the last Mayor in terms of days lost through striking and better than even the one before. He says he should not be complacent with his better performance. No.

    OK.I have a theory which admittedly may be incorrect or undesirable. In point of fact I have only just come up with it since watching the disgraceful grandstanding of Mayor Khan.
    Politically here must be an authoritarian commander of things such as transport in London. Politics is the art of the possible..yes, it is also the art of the necessary. We can’t have Mr Khan playing politics with millions of lives. Each one of those stranded travellers , without stretching a point, does need to buy sufficient food to feed themselves and pay their debts. Honestly we cannot have politics..Khan,Corbyn ,Benn, Blair, Eagle, mucking about with people’s lives. People lose their homes; get divorces; have domestic disputes, neighbour and landlord issues, crime issues based on WORK. We can’t have these messers with peoples lives throwing a spanner in the works because they have missed some internal party gravy train.
    Alternatively we need a non-elected mayor of London based on his expertise. Boris and Khan may get votes but honestly both are intelligent, very smart, but what on earth do they , could they know, about transport?

  56. Posted January 9, 2017 at 6:38 pm | Permalink

    Look, here’s an economic paper written by the Bank Of England.

    A 2015 Bank of England paper – Much ado about something important: How do exchange rate movements affect inflation? – provided three broad conclusions:

    First, contrary to common belief, exchange rate movements don’t seem to consistently have larger effects on prices in sectors with a higher share of imported content. Second, exchange rates don’t seem to consistently have larger effects on prices in the most tradable and internationally-competitive sectors. Third, the effects of exchange rates on inflation – and even just on import prices – do not seem to be consistent across time. Most of what I learned in grad school on this topic no longer seems to apply.

    They no longer apply because we use floating exchange rates now not fixed ones.

    Or do you want another one ?

    The Bank of Canada study also argues that: Has Exchange Rate Pass-Through
    Really Declined?

    the expenditure-switching effect helps to redirect consumption and investment in a country with a trade deficit away from imports, as the exchange rate depreciates, making the country’s exports more attractive to foreigners … [thus] … The benefits of a flexible exchange rate may also be larger than they appear …

    Or another one ?

    A 2014 New Zealand central bank study – Exchange rate movements and consumer prices: some perspectives – found that:

    Petrol prices adjust substantially and quickly. But a significant share of New Zealand’s imports appear to be priced for the local market and, however they are priced, there is a large domestic distribution component for most tradable goods. That means prices for traded goods in New Zealand will adjust by a smaller percentage than any given percentage movement in the exchange rate, and may diverge from those in the rest of the world for protracted periods.

    Every central bank and the International bank of settlements that overlooks all of the central banks have done similar studies. With all the same results.

    With floating exchange rates pass through inflation is minimal.

    So the Bank Of England lied before the vote it was project fear !

    Not only that there is a real life example all you have to do is look. See Japan for details.

    The Yen dropped more than twice as far as the £ has dropped. So what happened to Japanese inflation ?

    Nothing it barely moved because floating exchange rates adjust.

  57. Posted January 9, 2017 at 6:49 pm | Permalink

    ” sterling savings” is our greatest export.

    There isn’t really such a thing as a balance of payments crisis in a floating rate exchange system. For those excess imports to exist at all, the saving of the local currency must occur at the same time. Otherwise the financing of the deal would have failed and the transaction would never have happened. And there would be no excess imports. The floating rate balances out the successes and failures automatically. That’s its job.

    Very simply imports cannot ‘surge’ unless the equivalent local currency savings by foreigners ‘surges’ at the same time. And if the savings don’t surge then the exporter loses a sale and their economy shrinks as well – because there is nowhere else to export to in aggregate. Mars isn’t open for business as yet.

    Generally this entire misconception comes about by failing to analyse a transaction end to end, and by failing to separate the transaction into a real and financial component. (Every transaction requires the real part and the financial part to be in place before they will complete). And in particular failing to model the transaction(s) coming in the opposite direction that allows the FX swap to happen in the first place.

    Imagine a system where nobody in the world wants your tally sticks. You want a larger standing army which means freeing up some people from land work. So you impose a tax on the land and issue tally sticks to those who sign up to your army and those that make pointy sticks. Productivity is improved by division of labour and the army gets the spare manpower and goods – which they then use to improve the water drainage and irrigation systems further boosting output.

    Everybody is more fully employed by using the state’s power to create money, but there is no ‘surge’ in imports because nobody wants your tally sticks outside your border. But inside the border there is a demand due to the taxation system.

    Only when you have that ‘reductio’ clear in your mind can you get a grip on the dynamics within a floating system. Where you have drawn the border is an artificial device based on political boundaries. If you just have a dynamic border that encompasses everybody holding a denomination then it becomes much clearer to see what is actually happening.

    But it boils down to this. The end buyer always gets to use the type of money they want and the end supplier always gets the type of money they want. Otherwise there will be no deal. It doesn’t matter what the invoice is priced in. It doesn’t matter what the currencies are. It doesn’t matter where people are physically located in the world. The finance system has to make the finance channel tie up or it all stops and the deal chain collapses.

    Statistics showing excess of imports or excess of exports are thus the result of successful end to end deals on both the real and financial sides. They can’t be anything else in a floating rate system.

    Excess imports, if you can get them, increase the standard of living of the population. But primarily you have to maintain your domestic economy at maximum output. And that will require anti-dumping policies, equality policies and other policies along those lines to ensure that the development of your economy proceeds in a sensible manner. That would include sourcing imports from multiple competing nations to ensure diversity of supply.

  58. Posted January 9, 2017 at 6:53 pm | Permalink

    All tariffs do is favour internal production over external production and if you take your tariffs and use them to subsidise exports, then the point becomes moot.

    A larger trade deficit just means that foreigners desire to accumulate financial (or other) assets denominated in the currency of issue of the country with the trade deficit. In our case £’s.

    A trade deficit for the UK means that increasing quantities of £’s are being accumulated by non-UK residents. In return, the non-UK residents have supplied goods and services (imports) to UK residents.

    Clearly, the foreigners have allowed the UK to run a trade deficit because they preferred to accumulate financial assets denominated in £’s. The alternative would have been to spend the £’s they acquired through their exports to buy UK goods and services (that is, to buy UK imports).

    Had the foreigners used their export income, which is denominated in £’s to purchase other goods and services from the UK, then there would have been a trade balance.

    A trade deficit thus means that the foreigners are increasing their nominal savings (which in this case manifests as UK denominated financial assets).

    We leave. They do their worst and we reciprocate. Then we take what we get from the EU and give it as subsidy to our exporters. Something the Eurozone would struggle to replicate

    Or they do their worse and we leave our import tariffs at zero leaving the currency exchange rate to sort out the differential.

    And that’s because if the EU doesn’t take British goods and services, then they will have to take Sterling savings (which are essentially costless to produce) if they want to excess export to the UK. Then the EU becomes essentially our production servant – endlessly producing goods and services to ship to the UK because otherwise their economy collapses – and in return for essentially nothing.

    In both cases their restrictive treaty stops them responding in kind. They can’t move taxes between the countries efficiently to offset tariffs and they can’t stop their export drive because that’s how their monetarist economy is set up.

    Once you start thinking in currency area terms trade surplus and trade deficit disappears.

    In a deficit situation people in Birmingham, Alabama and Birmingham England save in Sterling denominated assets.

    In a surplus situation people in Birmingham, Alabama and Birmingham, England save in something other than Sterling (probably US dollars).

    A trade deficit for the UK means that increasing quantities of £’s are being accumulated by non-UK residents. In return, the non-UK residents have supplied goods and services (imports) to UK residents.

    The accounting reality at the BOE is we can define three trade balance outcomes as follows:

    1. The trade balance is in deficit if the local currency value of its exports is less than the local currency value of its import spending.

    2. The trade balance is in surplus if the local currency value of its exports is greater than the local currency value of its import spending.

    3. The trade balance is in balance if the local currency value of its exports is equal to the local currency value of its import spending.

    Tarrifs are just a game of pass the parcel and if the EU put tarrifs on our exports we take them and move them directly onto their imports.

  59. Lindsay McDougall
    Posted January 10, 2017 at 3:21 am | Permalink

    What you haven’t mentioned is the effect on sterling of the Bank of England’s ultra loose monetary policy, which is already causing inflation and which, if unchanged, will generate rip roaring inflation by the end of 2018. Interest rates would have to rise and repossessions would rocket. Would Mark Carney admit responsibility? I don’t think so. Voters would blame the Government.

    Sack Carney and restore Treasury control of monetary policy via inflation targetting, using an inflation index that includes asset prices – particulary house prices.

  60. James Morgan
    Posted January 10, 2017 at 12:05 pm | Permalink

    Well said.

  61. Posted January 10, 2017 at 4:15 pm | Permalink

    Excellent letter. Thank you for allowing it to be open to the public

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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