Why we will leave the single market and the customs union

I am surprised how long it is taking some in the media and politics to grasp that the UK will leave the single market and customs union. It should not be news. Both the official Leave and Remain campaigns made this clear in the referendum. It was one of the few things they agreed about. Staying in the single market whilst leaving the EU is not offer. There is no legal structure that allows that.

Nor should the UK apply to join the European Economic Area, a body we belong to only by virtue of being an EU member. Again, the official Leave campaign made clear we did not want to apply to belong, and Remain explained it could be difficult and would come with budget contributions and freedom of movement attached.

I came to the conclusion a long time ago that we needed to leave the single market. I did so because I saw the single market close up. As a senior businessman working in a large industrial group I saw how it did not work for the UK or for innovative companies. As the UK’s single market Minister helping construct it I saw how anti innovation and enterprise the whole structure was designed to be.

In the 1980s I was chairman of a large international industrial group. We had successful businesses in the UK, USA, Australia, Malaysia, South Africa and various other Asian countries. The only European country where we had a business was Greece. We found it difficult to sell into the EEC’s single market. During the Conservative opposition years this century again I was involved international business. Again it was difficult to do business on the continent despite putting in effort to do so with local people working in the relevant languages. We flourished outside the EU as well as in the UK.

As single market Minister the whole scheme seemed to me to be wrongly constructed. It was a con. It was not about free trade or free access. It was all about piling more and more laws and rules onto business and citizens in the name of the single market. It ended up favouring large companies already dominant in a market, and the status quo. The danger was it could make exciting innovation illegal. The definition of a single market measure could range from employment and welfare policy through environmental policy to transport and taxation.


  1. Prigger
    January 16, 2017

    “I am surprised how long it is taking some in the media and politics to grasp that the UK will leave the single market and customs union. It should not be news.”

    Mrs May has been asked straight up, at every opportunity, to say: “We will leave the single market and customs union” She did not. Still not.

    1. rose
      January 16, 2017

      It is called “constructive ambiguity” or what we used to call a poker face.

      It isn’t a good idea for someone in Mrs May’s position to get into arguments with broadcasters and reporters about details; and details would surely follow if broad outlines were given.

      This doesn’t mean the media and, I am sorry to say, the markets, have to be thick.

      We are leaving the EU. That means we are leaving the internal market and the customs union to make our own independent arrangements. Why else have Liam Fox and his whole department? Why talk to countries outside the EU?

    2. Chris
      January 16, 2017

      Agreed. Theresa May has apparently said that she wants us to be in the Single Market (D Express audioclip today) and she refuses to say that we will be having the Brexit that we voted for – called by some a hard Brexit. Instead she ducks the terms and really seems to be playing games with the interviewer and the general public. It really is not acceptable. If Theresa May states tomorrow that we will be asking to stay in the Single Market and that we will be willing to continue payments into the EU budget, and that we will be willing to accept freedom of movement to a degree, then we will not be leaving the EU properly. That will, I believe, represent a fundamental betrayal of those majority Leave voters, and she will not be honouring the result of the referendum. In short she will be breaking the Government’s promise to the people.

  2. Lifelogic
    January 16, 2017

    Well we shall see. Theresa May does not inspire any confidence at all in me, but I very much hope you are right.

    Perhaps with Trump now encouraging her (and saying be loves free trade and wants a quick (not a back of the queue) agreement with the UK, then she will finally come round to this sensible approach. Perhaps she will also move to a sensible energy and fiscal policy eventually. Though at her age one might have expected her to work out how the world worked already.

    1. Lifelogic
      January 16, 2017

      On fiscal policy I see that Hammond has said: “The UK may be forced to change its “economic model” if it is locked out of the single market after Brexit”. But he seems to have ruled out the Singapore economic model.

      Why and why would we need to be forced it makes sense so just do it? What is not to like after all? Hammond’s autumn statement just more and more tax borrow and waste in the Osborne mode. A change of direction here is desperately needed. At least he seems to be aware of the Singapore Economic Model I suppose!

      From WIKI – Singapore has a highly developed trade-oriented market economy. Singapore’s economy has been ranked as the most open in the world, the 7th least corrupt, the most pro-business, with low tax rates (14.2% of Gross Domestic Product, GDP) and has the third highest per-capita GDP in the world in terms of Purchasing Power Parity (PPP).

      Sounds just fine to me.

      1. Lifelogic
        January 16, 2017

        Philip Hammond also oddly seems to believe the UK is in the middle of the range in terms of the levels of government expenditure as a % of GDP (on the range from USA low to France high). Well the UK is perhaps not quite as bonkers as France or Cuba but we are certainly very well up there with them and this needs to be addressed urgently.

        Only about three significant economies are any higher than the UK and not that much higher either. The UK also has the problem that despite spending so very much we still have dreadful public services, a dire NHS, a lack of roads, expensive by design energy, poor education, expensive houses, expensive public transport ……


        As Reagan put it: “Government is not the solution to our problem government IS the problem” and this was when the government in the US was only spending about 21% of GDP. Not (largely wasting) nearly 50% as in the current UK.

      2. StevenL
        January 16, 2017

        The tories will never adopt the Singapore model as it means having higher land value taxes and lower transaction taxes, wealth taxes and VAT / sales taxes.

        The tories seem to exist to lower land value taxes and raise transaction taxes, wealth taxes and VAT. The proof is in what they do, not what they say.

      3. acorn
        January 16, 2017

        Singapore has close on a million migrant workers in a population of 5.5 million. There are no “workers rights” for migrant labour. They live in “dormitories” of a thousand plus; and they are strictly segregated from the indigenous population.

        “Sounds just fine to me” says lifelogic, a Brexiteers dream scenario.

    2. Richard1
      January 16, 2017

      Not sure about the sensible energy policy. Hinkley Point is going ahead. There is an excellent take down of the absurd Swansea logoon project in Wales by Jonathan Ford in today’s FT which I can recommend. The short summary is this nonsensical folly will generate 0.2% of the UK’s electricity – and the planned follow on projects have a total capital cost of £53bn to produce the same output as Hinkley Point – 7-8% of UK output. A consultant has estimated the required guaranteed price will be £168 /MWh, 4x the current market price. Amazingly a Conservative MP, Charles Hendry, is the cheerleader for this latest great dollop of green crap.

      1. Lifelogic
        January 17, 2017

        Hinkley C is bonkers but the “Lagoons” are even more so. Why exactly did T May do her delay but then the rapid U turn on the Hinkley? It does not inspire confidence. Can no one in government do simple arithmetic?

  3. Gandalf Jnr
    January 16, 2017

    Heaven knows why JR you have not been sent to speak with Trump. But one could also be equally amazed why you are not in the Cabinet or received some title or other, “Sir”.

    Few if any look right beside him.
    Michael Gove for all his genuine remarkable intelligence and accomplishments looked like a hobbit visiting a giant and seemed somewhat in awe.

    I doubt politicians actually stand in awe of other politicians. They appear rather like baby sharks in the womb and if food doesn’t turn up they will feast on one another and sleep soundly in the night.

    But I feel Donald Trump is a one off. The odds against him becoming Republican nominee were 100-1 at the start of the battle. Even before then , quite remarkably, the SNP could not stop themselves hitting him personally and politically with everything in their gutless repertoire.
    On the surface it seemed wholly illogical to attack anyone who could not possibly even become a a Senator, let alone a Presidential candidate. But their war on him as a non-elected individual was ferocious, nasty, illogical and daily. Anyone would think he was British and standing in a Glasgow constituency.

    In my view. They sensed as if by telepathy and mystery one of their very own, grown wings.

    1. APL
      January 16, 2017

      JR: “Both the official Leave and Remain campaigns made this clear in the referendum.”

      Is that like the pledge to spend £350m of EU subscription money on the Health service?

      Everyone should be aware the ‘official’ campaigns were set up to win the referendum, nothing else.

      That’s why Boris Johnson could be a prominent member and no one actually expected to take anything he said seriously.

    2. Tad Davison
      January 16, 2017


      You wrote this of our host ‘………one could also be equally amazed why you are not in the Cabinet…’

      I’ll let you into a little secret. They don’t want free-thinkers. They prefer yes-men.

      There’s a distinct lack these days of politicians with any real sense of direction and conviction. Happily, given all that he has written over the years, JR has proven himself to be one of life’s true signposts, and is more than prepared to take on all-comers and successfully argue his (and our) case in the place that matters the most – the public arena.

      It might seem as though JR has been overlooked, and I for one regret that. Were it within my gift to select the cabinet, I would certainly have him in my team, despite him having once worked for Goldman Sachs. His skills are too valuable to exclude, and those who do so put themselves at an automatic disadvantage. But he hasn’t been overlooked by the thinking public who regard him as one of the leading political authorities of our age. I am sure history will record him favourably.


      Reply I have never worked for Goldman Sachs

      1. stred
        January 17, 2017

        to Reply.I have never worked for Goldman Sachs – And you certainly won’t be after writing this blog.

      2. Tad Davison
        January 17, 2017

        Sorry, just looked to the right, it was the other one.

  4. Caterpillar
    January 16, 2017

    I guess some will argue to look at Turkey, Isle of Man, Andorra on the one hand and Norway, Lichtenstein, Iceland on the other but, for me, leaving the EU meant leaving both the customs unio and single market – though this shouldn’t stop a trade agreement nor easy transit of goods / services.

    (I do prefer the branding/narrative of “clean” Brexit to “hard” and much prefer a clean transparent Brexit to a dirty/grey/unclear Brexit.)

  5. Mark B
    January 16, 2017

    Good morning.

    . . . . I saw how it did not work for the UK or for innovative companies.

    That is because it is not a market in the way you, I and others see it. The Single Market was a power grab by the the EEC, just like the European Coal and Steel Community was.

    But we have been in this entanglement so long that extracting ourselves would be very damaging. And it was designed that way so to dissuade others from doing the same thing. The only blessing we have is that, Donald Trump is a ardent supporter of the UK. Politically the planets for our leaving the Stupid Club have aligned ! We will never see a better chance than this in our lifetime.

    The problem though, is that we can still muck things up if we see and think in narrow and dogmatic terms. Chairman May may be right to want a ‘phased withdrawal’ (my term) from the EU.

    We can but hope.

  6. Waiting for Godot
    January 16, 2017

    Where’s the beef? Not one signature to leave!

  7. Sir Joe Soap
    January 16, 2017

    It’s politicians in your own party who haven’t cottoned on and are finding it difficult to get their heads around this. The media and markets are just followers. If the government had been straight from the outset everybody would’ve known where they stood 6 months ago.

  8. Popeye
    January 16, 2017

    So far, the only mark on British history Mrs May has made, is that left by her browny dull trousers on where she sat for that famous photo much commented upon by Ms Education with an eye for detail, or two.

  9. Ex-expat Colin
    January 16, 2017

    Thornberry, Benn and Corbyn…really wanting to drag it out. I think Trump will finish this off for us. And he spoke of huge debt again…that needs to come out more often here.

    O/T: 100 job loss at UEA..begging letter sent to Mrs May to waste more money…more debt to halt the climate? Banking on Trump here..sorry betting again.

  10. alan jutson
    January 16, 2017

    The argument by those who wanted to remain is simply about trying to cause delay with deliberate confusion in the hope that Leavers will give up out of frustration..

    Their argument seems to be that if you leave the single market you can no longer trade with anyone still in the EU.

    I am amazed how so many people have actually been deceived by this tactic, because if this was true, then the EU would not import anything from outside its own area.

    The secondary argument appears to be that if you do trade with the EU from outside, then huge financial barriers will be put in place, which rather defeats the first argument of trade not being possible.

    The real facts and Common sense will prevail in the end, the small penalty Companies MAY have to pay to trade with the EU, will be more than offset by trading with other Countries throughout the rest of the World.

    1. Leslie Singleton
      January 16, 2017

      Dear Alan–And the cessation of contributions and the net income from the tariff war that looks like being forced upon us and the extra efficiency and higher profits that the 90% of our companies that couldn’t care less about the EU will enjoy when they can simply throw away the book of EU unnecessary laws rules regulations and directives and removal of the costs of the present preposterously high levels of immigration on our schools, roads the NHS and the Welfare state in general. Let’s hope this Wilders chap does well.

  11. Anonymous
    January 16, 2017

    The Remain camp (including the BBC) are being disingenous. During the referendum they warned us time and time again not to leave the EU because it would mean leaving the Single Market. Nicola Sturgeon in particular is on record in televised debate saying “It’s common sense that you do not turn your back on a market of 700 million people.” She said this over and over again. Go on YouTube if you do not believe me.

    Since the majority voted to leave the Remain side have changed their position and now say “It was not clear that Leave meant leaving the Single Market because it was not on the ballot paper.”

    Well, thankfully Mrs Sturgeon et al made it abundantly clear that Leave DID mean leaving the single market – it was the central plank of the Remain campaign which was even more prominent than “It is racist to vote Leave.”

  12. Old Albion
    January 16, 2017

    Why do remoaners keep claiming, ‘we didn’t vote to leave the single market, the customs union, free movement, etc.’
    We were asked, should the (dis)UK ‘leave’ the EU’ or ‘remain’ in the EU’ It’s a simple question. It got a simple answer. ‘LEAVE’

    1. Ed Mahony
      January 16, 2017

      Leaving the EU is incredibly complicated (That does NOT mean it’s not possible). Moreover, there is a lot of disunity and bitterness still over the Referendum. Meanwhile, there is still lots of immigration, we still have a massive debt to pay off, and there are worrying things going on geopolitically – Russia, Syria, mass immigration from Middle East and Africa, terrorism, and so on.

      Firstly, we all have to unite. Come together. And then we have to work really hard to make things work. And lastly and most importantly, pray (if we are of a praying disposition). If we do all these three things, and do them well, then I think this country has an exciting, wonderful future. If not, it’s going to be same old, same old (just look at the history books to see how often great hopes for the future – and the potential for things to turn out really well – turn out uninspiring, chaotic, messed-up).

      Reply Leaving can be easy – send a letter and repeal the 1972 Act. Some people want to make heavy weather of a new relationship agreement so doubtless it will all take time. You don’t have to have such an agreement to leave.

      1. Ed Mahony
        January 16, 2017

        I hear what you say, Mr Redwood, but at same time, there are so many things that are easy on paper, but so many little (and big) things that can pop up as obstacles, including the unpredictability of people (and all the kinds of institutions they run and are part of).

        My point is more philosophical (/theological), perhaps! (But just as important, and not forgetting how traditionally, Philosophy, Politics and Economics have often been studied and approached together – and rightly so ..). And this point needs to be made more than ever because we’re at such an important point in our history, and there is an exciting future ahead, i think.

        What we can all certainly agree on, however, is that this country has to unite if we’re to make a success of Brexit. And that it’s going to involve an awful lot of hard work, sacrifice and patience by everyone to make things work out best in the long run.

      2. rose
        January 16, 2017

        “You don’t have to have such an agreement to leave. ”

        And I sincerely wish we weren’t angling for a new relationship agreement before we leave. It is bound to weaken our position. Just leave politely and then negotiate what comes up. If we negotiate beforehand, the EU can exploit the presence of the remainiacs in our midst.

  13. Fedupsoutherner
    January 16, 2017

    Interesting John. I suspect Germany and France have done the best from trade. Your posts, both today and yesterday have highlighted in no uncertain terms the reason we must leave the single market asap. I can’t see how any minister would want to stay in and its about time news reflected your views. Brilliant post yet again.

  14. Richard1
    January 16, 2017

    Tony Abbott the former Australian PM has made an interesting observation – one made in the past by you I think: a trade deal should be signed between the U.K. And Australia and among Commonwealth countries which is no more than one page long. All it needs to say is a product or service approved for sale in one country is approved for sale in the the other(s), and a person qualified in one country – eg a doctor – is automatically qualified in the other. There should of course be no tariffs or regulatory attempts to frustrate trade. This would fit well with a liberal immigration policy allowing free movement for those with jobs, the resources to support themselves and start businesses or the expertise for high level work or study – and who are not criminals or terrorists.

    1. scottspeig
      January 16, 2017

      I think you would need to state that “as long as the product meets the legal requirements of the country it is being sold, then there is no barrier”.

      As to qualifications, the above would need to be copied – otherwise you start impressing on standardising training methods etc. Each country should be entitled to reject products/services/qualifications if not on a par with their own!

    2. acorn
      January 16, 2017

      Will all these doctors speak English? Will all the Ausi kettles come with an Ausi plug fitted?

      1. Richard1
        January 17, 2017

        Probably at least as well as many of those from the EU who have the right to come here now.

    3. hefner
      January 19, 2017

      R1, Beware what you wish for, this might accelerate even more the exodus of British doctors to Australia.

  15. Ian Wragg
    January 16, 2017

    If the EU continues to its logical end it will mirror the Soviet Union. Germany being the manufacturing centre with France as the agricultural area. The rest of the EU supplying cheap labour.
    We will be down to no choice as competition is ruthlessly suppressed in favour of the big corporations.
    The problem is the proles are waking up to the corruption at the heart of Europe and are getting angry.
    Who will be the next to leave.

  16. Bert Young
    January 16, 2017

    My experience echoed John’s . In the 60s there was an enthusiasm shared by most large companies from the USA and the UK that opportunities abounded in the , then , Common Market . I spent many of these early years attempting to tie up deals to bring about expanded trade and relationships . I set up offices in Brussels , Amsterdam , Paris , Frankfurt and Lausanne where skilled staff were located to facilitate these efforts . Italy was catered for from London – my HQ.
    By the mid 70s it was evident that the bureaucratic influences in Brussels – its rules and regulations , were having a stifling effect , and mitigated against expansion . One by one I closed these offices and switched my interest to the USA and the Far East . The experience there was entirely different resulting in new offices in New York , Chicago , Los Angeles , San Francisco and Tokyo . Business thrived without interference . By the end of the 80s there was little evidence of any slow down – expansion continued .
    The EU bureaucracy killed opportunity ; the introduction of the Euro was , in my opinion, the final straw .

  17. Anonymous
    January 16, 2017

    The people in Britain and America have snapped. It’s what happens when you deny them moderate conservatism because it does not accord with political correctness.

    Yes. We meant leaving the Single Market on the 23rd June.

    Please ignore unelected actors and actresses. They had only one vote like everyone else.

  18. Pete
    January 16, 2017

    They probably don’t grasp us leaving because they see there’s a good chance that May and co. won’t actually do it. I can see the same thing.

  19. David Murfin
    January 16, 2017

    “We found it difficult to sell into the EEC’s single market. ”
    Isn’t that what the Remain side says? If what was then true, why will our exports to Europe hold up now?
    I think we are better out, but please explain why Leave is so confident our trade will continue if the EU attitude is “piling more and more laws and rules onto business and citizens in the name of the single market to favour large companies already dominant in a market”

    Reply Difficult meant we often sold them nothing! So there is in that case nothing to lose.

    1. David Murfin
      January 17, 2017

      Come now. If we are at present in the single market and selling £X worth, and outside it is difficult to sell into it, then potentially we lose £X. I suppose you imagine that established sales would continue.

  20. Colin Garrett
    January 16, 2017

    As usual, John Redwood talks sense based on experience of the real world.

  21. Lifelogic
    January 16, 2017

    I had not realised that MPs (even those who just who resign mid term) get a pay off of up to £64K (with about half of this tax free). Surely if the resign they resign from choice and deserve nothing at all.

    Still we are all in it together, as Osborne put it.

    1. Lifelogic
      January 16, 2017

      In resigning they are already dumping the large cost of a bye-ellection onto the taxpayer.

    2. Mark B
      January 16, 2017

      I think goes back as far as Blair’s govenment.

      Political parties also get funding from the UK tax payer.

    3. Not a Londoner
      January 17, 2017

      Positions become vacant generally in a 4-5 year cycle. Your local electoral office will guide you to some extent through the process.
      You’ll need to work in London; live there a bit. Hardly worth the salary.

      1. Lifelogic
        January 18, 2017

        I lived in London (mainly Highgate) for about 20 years until be left the UK about 8 years ago. I sill spend quite a bit of time in London.

        Indeed I am in Primrose Hill now.

  22. bluedog
    January 16, 2017

    It is possible that those least likely to understand the deep flaws in the EU project are the eminent jurists of the Supreme Court. Chronic Europhilia is very much a disease of the elderly, and its onset dates back to the early nineteen seventies. Those affected during this formative period of their own lives as well as the institution on which they lavish their love, are almost certainly beyond hope of cure. One fears that the bench of the Supreme Court is something of a hotspot for the affliction.

    1. rose
      January 16, 2017

      Just look at the majority of the old folk in the House of Lords.

      1. rose
        January 16, 2017

        I recently saw 3 potty peeresses discussing Brexit with a BBC man. They were embarrassingly out of touch with the present and the people.

  23. Antisthenes
    January 16, 2017

    The remainers have a bewildering array of incoherent reasons for staying in the EU and are paranoid about the effects of leaving. All of which are purely speculative. Their idealism clouds their objectivity for them the concept is all that matters. Certainly the concept has merit and if the EU had translated the concept into reality then the UK would not be in the process of leaving but it has not. The reason it has not is because it built a complex autocratic institution to deliver the objectives of the concept. To work it needed a much looser and democratic institution that evolved toward achieving the objectives organically.

    The damaging consequences from the way the EU project was constructed are now becoming increasingly obvious. A number of euro crises that have brought economic misery, an immigration crisis, an over regulated anti and noncompetitive single market, a bloated over rewarded bureaucracy that is wasteful, inefficient and arrogant. That is just a sample list of the damage the EU has inflicted. To make it worse when a member state wishes to walk away from the messes it is making it is almost impossible Complexity, stubbornness, hubris and an army of sycophants makes it almost impossible. In the EU there was high hopes for which it has not lived up to and as you point out the single market being one example of the many of where it has failed.

  24. Juliet
    January 16, 2017

    If single market never existed, there would be no need for the EU multi-tier structure, and taxpayers would not be required to pay the hefty tariff/levy that enable businesses to trade with with other European countries. I think business forget tariffs are paid for by joe public not through choice.

    Strucure of a ‘one territory where people, money, goods and services can move freely to boost competition and trade’ is fundamentally flawed. Pretty obvious the assets are not equally weighted, they do not stack up against each other, what is clear is the 4 freedoms are really 2 separate grouping: group 1 impacts group 2 and puts enormous strain and pressure on a country if you don’t have control
    – group 1 people
    – group 2 money goods services

    The ‘people’ aspect could only ever work if all EU27 countries were economically equal and balanced positive immigration complied with the countries rules. A person moving freely around USA is completely different to different a person moving freely around european member states; as the US is one entity ‘holistic’ strucutre, and the EU consist of 27 different entities, demographics, economies.

    Organisations would now be forced to change their business model regarding staffing, innovation and training.

  25. Kenneth
    January 16, 2017

    The problem is that the single market fossilises our products and stifles challengers.

    We end up with outdated and inefficient dinasours

  26. Chris
    January 16, 2017

    Could Theresa May deal with Nicky Morgan once and for all? Her latest outburst is ill informed, arrogant, destructive and anti-democratic. She was, I believe, over promoted by Cameron, and I seriously object to this mere novice (in my view) in politics apparently dictating terms and not being firmly put in her place by Theresa May. Perhaps the whip should be taken away, as Carswell suggested could happen, or deselection?

    1. Pole Star
      January 17, 2017

      I did a poll in Nicky Morgan’s Loughborough Constituency and found that 54% of those who voted Remain would now vote Leave if Nicky Morgan would stand down as MP as a result.

  27. turboterrier
    January 16, 2017

    The change for them is they are getting sight of the bleeding obvious.

    The EU is slowly but surely falling apart as even the so called leaders are very much at odds in what they think the new journey’s destination will ultimately be.

    Our leaver’s especially in Westminster will start to edge their bets especially as they will have to start thinking ahead to the next GE when and if it comes earlier than planned.

  28. Denis Cooper
    January 16, 2017

    I hope that in her speech tomorrow Theresa May will make it clear that there can be no “cherry-picking”, the EU countries “cannot expect to have their cake and eat it”.

    So if they wish to maintain their present free access to the City capital markets they cannot expect us to tolerate any obstacles being needlessly reintroduced to hinder the existing well-organised and easy two-way trade in other sectors.

    But above all I hope that she will not be drawn into “threatening” to leave the single market, as Sky News likes to say.

    She should simply tell the EU that we have decided to take back complete control of our immigration policy, and that is non-negotiable and will not be part of the forthcoming negotiations, and ask them what they would like to do about trade.

    Put the ball firmly in their court, let them risk reputational damage around the world by threatening to unnecessarily disrupt trade as an unjustified act of retaliation.

    1. Peter Parsons
      January 16, 2017

      The City of London does not have a monopoly on capital markets. As the Group Chairman of HSBC said to the Treasury Select Committee a few days ago, finance companies will simply move functions and operations elsewhere if need be:


      Reply True, and that includes shifting things to london ss some have been doing recently

      1. APL
        January 17, 2017

        Peter Parsons: “As the Group Chairman of HSBC said to the Treasury Select Committee a few days ago, finance companies will simply move functions and operations elsewhere if need be:”

        He is welcome to move his head office to Beijing, I doubt he’d like the regulatory regime there, though.

        The Chinese approach to prosecutions and punishment of anyone who does not toe the party line is, shall we say, unfortunate for the perp.

        Not to mention the Chinese economy is in free-fall just now, anyway.

        He could of course move to Frankfurt if he wanted, but the Germans already have too much on their plate with two major international banks Commerzbank and Deutsch bank looking extremely shaky, I doubt they’d want another bank just at the moment.

        So where does that leave HSBC? Luxembourg? Good luck Luxembourg taking on and providing guarantees for a company the size of HSBC.

        RBS has cost the UK government £97billion since its 2008 bailout.

        Parliament should tell HSBC group chairman to ‘put up or shut up’.

    2. ChrisS
      January 16, 2017

      I would go further :

      I would tell them we will be signing our own trade deals around the world without interference, ending Freedom of movement and the supremacy of the ECJ, all commencing on the 31st March 2019.

      In addition we will be stopping budget contributions on the same day.

      Now. would they like continuing free access to the lucrative UK single market ?
      If so, how much are they prepared to contribute to the UK budget ?

  29. CdBrux
    January 16, 2017

    One of the reasons the single market favours established and large companies is that the various industries ‘experts’ form the advisory panel (I’m sure there is an official name for it) which helps drafts the rules & regulations. So of course they do so in a way that fits their processes & knowledge and what is in their innovation pipeline. Why wouldn’t they given the chance? The company I work for does, I have to say that I don’t believe for my company there is any deliberate intention to crowd out others, just a pragmatism that if you can help influence the rules then you will!

  30. ian wragg
    January 16, 2017

    O/T but a gem I must share.
    Walking home today past the local health centre there was a UK made all electric car parked by the roadside. At the rear there was a small petrol driven generator connected charging the vehicle.
    I was very amused and asked the owner why he needed to charge the battery on the street, he said he bought the car as it was very cheap to run and he liked to visit his family scattered around the Midlands.
    Normally in summer he was able to comfortably get from his home and return on a single charge, being winter and having to use lights, wiper and the heater he was down to 25% charge.
    Having nearly been caught out before he has purchase the generator which he carries for emergency top up.
    I pointed out this was rather dangerous carrying a petrol driven generator in the boot but he said he would like to sell the car but the depreciation after just one year was crippling.
    is this how we are going to save the planet?

    1. Anonymous
      January 17, 2017

      Also a petrol generator is one of the most inefficient ways to produce electricity.

    2. Lifelogic
      January 17, 2017

      Exactly, they will come eventually but the technology is very limited currently, even with the tax advantage of having no tax on the fuel etc. They make little sense for most people. Rather tricky to charge at home if you live in a city flat too.

      Oh and doubtless the tax advantage will go in due course.

  31. margaret
    January 16, 2017

    As I have commented before , I am in that unlucky position where I cannot make my own mind up due to lack of knowledge and experience in this field. I think one would agree that when you actually do the job the pitfalls can be seen and the academic stuff most of us learn can be argued for or against. My comments derive from what others have said and intuition .
    This was a long apology for the question I am going to ask . Do you think that when you were in big business, the ambience with which you assert todays state of affairs with the European Economic area have changed and therefore our relationship has changed making the arguments less potent?

    Reply No

  32. hefner
    January 16, 2017

    Always funny to realize that the large international industrial group Concentric AB appears to be quoted in … Stockholm.
    But no one is exempt of contradictions.

    Reply Why is that a contradiction? The Uk owners I worked for sold Concentric to Haldex who later quoted it in their home country

  33. Slim Jim
    January 16, 2017

    My understanding is that we ought to seek access to the single market, rather than be ‘in’ it (as that would effectively be the same as being in the EU). I have also been paying attention to Dr. Richard North’s blog, and he thinks that a ‘Lichtenstein’ solution would be a way forward, i.e. membership of EFTA & EEA. I believe that we can opt out of free movement with this option, nor will we be subject to ECJ rulings (although the EFTA court pays heed to them). The fact is, it will be incredibly difficult extricating ourselves from the tangled web of decades of EU treaties, laws and regulations without an interim solution, and the fact that successive governments have signed away so much sovereignty, will make it unlikely that we can complete any new deals within the 2 years following our Article 50 notice. I do believe though, that we can move forward with confidence, as it will be mutually beneficial for the UK and the EU to continue trading and co-operating in the future.

    1. Denis Cooper
      January 17, 2017

      “I believe that we can opt out of free movement with this option”

      That is not the case, and if Richard North allowed comments pointing this out you and others would not have been misled into believing it.

    2. Know-dice
      January 17, 2017

      From a negotiation point surely it’s best that the party/parties you are negotiating with believe from the outset that you are willing to just walk away.

      Maybe the Richard North/EEA/EFTA will come to play later on, but start with WTO is just fine with us…

  34. Denis Cooper
    January 16, 2017

    I recently highlighted a 2015 article by the europhile FT columnist Wolfgang Munchau, in which he completely dismissed the single market as a significant consideration in helping us to decide whether we should stay in the EU or leave the EU:


    To his credit he is still maintaining that general line of thought:


    “Brexit is terrible because it deprives young Britons of the right to choose where to live, study and work. It deprives them of a European identity many believed they possessed forever.

    If this is what upset you about the Leave vote, then you were insane to allow your political campaign to be hijacked by lobbyists who kept whining about the loss of the single European passport for banks. This is the superfluous argument that lost the Brexit referendum. Keep making that same mistake in the battles that loom in 2017 and the populists will win everywhere.”

    Well, the question of the EU is above all a political, or geopolitical, question, and a clear majority of the British people who troubled to vote on June 23rd 2016 gave their answer; the current attempts to argue that we should nevertheless stay in the EU single market for economic reasons are what he refers to as “the superfluous argument”.

  35. Beecee
    January 16, 2017

    I understand that an MP has to declare an interest if speaking in a debate on a subject that conflicts with something they have or do outside of Parliament.

    Why do people like Nick Clegg not declare that their EU pension etc depends on them not saying anything of detriment to the EU when being asked about Brexit etc by the BBC?

  36. R.De Witt Jansen
    January 16, 2017

    The Single Market -Free Movement
    “‘In essence what we have seen happening is that free movement has been synonymous with a race to the bottom, with undercutting of wages, with unfair competition in the labour market and that has to do with the Rules Europe has produced itself”‘ Quote from Lodewijk Asscher – Deputy Prime Minister of the Nederlands

  37. Mike Wilson
    January 16, 2017

    Okay, so we’re leaving the Single Market and the Customs Union – in fact, we are leaving the EU.

    Again, what’s going to happen to the 2 million Brits living (mainly) in Spain and France?

    1. Know-dice
      January 17, 2017

      I don’t think that Mrs May has anything to lose by taking the “moral high ground” over this.

      She should just state that EU migrants living in this country have a right to family life and can continue to stay here.

      May be a few weasel words like living here before Article 50 triggered and no criminal record….

      Probably the ex-pats living in France and Spain are older than those coming to this country and in the long term will be more of a burden on their chosen country of residence.

      But, in any case this anomaly should be sorted out sooner rather than later and I don’t believe should be used as a “bargaining” point…

  38. Little Englander
    January 16, 2017

    Single Market – Free Movement
    ‘” That means that the Dutch painter is out of work, out of a job. It means the smaller company that cannot afford to hire internationally is out of work”‘ Quote from Lodewijk Asscher – Deputy Prime Minister of the Nederlands

  39. cantreadcantspell
    January 16, 2017

    Single Market – Free Movement
    “‘The problem is that it has become a BUSINESS MODEL. a business model for lowering wages” Quote from Lodewijk Asscher – Deputy Prime Minister of the Netherlands

  40. Mike Wilson
    January 16, 2017

    During the Conservative opposition years this century again I was involved international business.

    Isn’t being an MP a full time job?

    1. rose
      January 17, 2017

      How could an MP be in the government if being an MP is a full time job?

  41. hefner
    January 16, 2017

    OT: Re: a previous post by LL: has he ever considered the drag on the Earth’s rotation rate created by the Israel-Palestine wall and the incoming Great Wall of Mexico? I would think this a topic of research worth a EU grant to a (real=physics+engineering) UK university department.

  42. Little Englander
    January 16, 2017

    It’s been a LONG time coming for something Brexit has been saying for a long time but Lodewijk Asscher appear to accept that, as it stands, Free Movement is counter-productive in that (and most importantly) he says that it has become a ”business model” for lowering wages (and by inference) thereby undercutting jobs for one’s own Nationals.
    The counter claim here will be: ”Our own workforce won’t/can’t do the job! (I believe it’s more to do with the advantage of lowering wages). That’s where controlled Immigration comes in on a Work Visa basis renewable each year for example subject to proven skill shortage in that sector of employment. Not difficult – many Countries do it and it works. I’ve done it – I was a Guest Worker for years – Work Visa processed and renewed each year. I accepted before accepting the job that this was the Immigration Policy of the Country and that it was NOT and automatic renewal, that Immigration’s decision would be based on the skill requirements prevailing at the time, Some of my cohort declined feeling that there was insufficient longer term job security.

  43. Colin Hart
    January 16, 2017

    Yes. Out of the single market. Out of the customs union. And no more contributions to the EU budget when we leave on March 30, 2017.

  44. Jack
    January 16, 2017

    Cut payroll taxes & increase government spending, and it really won’t matter how hard the Brexit is – we will have prosperity beyond anything we can even conceive of now. If Brexit is seen to “end austerity”, and the economy + productivity grow rapidly, Remainers will soon jump on the Brexit express, and any Leave voters currently doubting their decision will know they did the right thing.

    The UK government is already monetarily sovereign, it can provide sufficient spending in the economy to maximise GDP now. Having voted to Leave, I really don’t think the EU is going to give us a call about keeping our budget deficit below the 3% limit set out in the SGP. Let’s do it.

    1. Jack
      January 16, 2017

      Imagine if instead of real wages growing by ~2%, they were growing around 8% every year. That is possible now, and possible post-Brexit. The productive capacity and real resources are there for us to be a far richer country than we are now, there is just insufficient spending power in the economy.

      Lower interest rates actually reduce demand and prices, so don’t expect them to help (although we should still keep the BoE Bank rate at 0% forever, there’s no benefit of the government artificially intervening to push up rates, it distorts the economy).

      We need fiscal policy.

  45. Oh Yes!
    January 16, 2017

    Elvira Sakhipzadovna Nabiullina Governor of the Bank of Russia since 24th June 2013 does far more than compare favourably with her British/Canadian counterpart Mark Carney.
    One remembers Mr Carney chortling about Russia’s prospects. He obviously was not banking on Russia’s Bank Governor nor a recent recovery in the oil price. Perhaps he is too young to have heard about the Siege of Leningrad.
    I guess security reasons rule out her becoming our next B0E Governor. Not much of a challenge for her anyway given her Bat Out of Hell performance. Wow! ( apologies to Meat Loaf )

    1. Mitchel
      January 17, 2017

      She has done a very good job.Ever since the Crimea we have been told Russia is just months away from implosion-it was never likely and the Russian stockmarket has boomed over the past year.

  46. Anthony Makara
    January 16, 2017

    President Trump will offer us an opportunity to start to replace EU trade with Transcontinental trade and we should jump at the opportunity. Trumps Economic Nationalism is a model that we should follow, it promotes fair trade between hard currency economies while at the same time supports job growth at home through intelligent protectionism. The era of wanton free trade with its currency manipulation and unfair wage differentials is coming to an end. Those who are smart will seize the opportunity and place themselves on the right side of history. We don’t need the EU single market and are better off out. Let’s work with President Trump and start to build a new UK economy.

    1. Anonymous
      January 17, 2017

      Indeed – there is no point in being protectionist about welfarism and the NHS and lassez faire about outsourcing of real jobs.

  47. Derek Henry
    January 16, 2017

    The secret sauce of course is our greatest export “sterling savings.”

    Without ” sterling savings” EU exporters to the U.K can’t

    a) Run huge trade surpluses.

    b) Keep their own exchange rate low.

    The only way they can get their hands on our secret sauce is by selling us stuff we need. Then we can get more imports for our exports.

    There’s thousands of them out there now worrying how they can keep their market share. Everytime the £ falls.

    We are in control here not them.

    1. Anonymous
      January 17, 2017

      It’s only a matter of time before our phoney economy is rumbled. (And our phoney people.)

      We are trading on afternoon tea, top hatted bankers and Mary Poppins.

  48. Trader
    January 17, 2017

    Not sure why Former Quebec Premier Jean Charest thinks we cannot negotiate a trade deal before we leave the EU. It is my understanding we can. But cannot actually sign and implement it until we leave.
    The idea we could be floundering for seven years like the Canada EU recent deal yet after Brexit in two years time does not seem plausible.


  49. Mick
    January 17, 2017

    I voted to leave the eu end of, that means anything to do with it and if they don’t like it tough but don’t dare to threaten us, we are British and a proud nation and want self rule once again , so come on Mrs May tell them what WE want in your much awaited speech

  50. A.Sedgwick
    January 18, 2017

    Mrs May was encouragingly forthright in committing to leave the single market but her comments on the customs union were contradictory and worrying. Her confusion over being part members of the customs union but still able to negotiate independent trade deals and essentially asking for any bright ideas is rather a Cameronesque negotiating tactic. She also deployed his pledge of walking away from a bad deal – his failure to do that cost him the vote and his job.

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