Complex supply chains and industrial integration

There is a strain of advice going to Ministers from officials,the CBI and others of the Remain persuasion that we now have complex supply chains in business, and that European integration of industrial activity means we have to stick close to the single market.

In the 1980s before I became a Minister I chaired a large quoted industrial group. Between 2003 and 2010 in the opposition years I chaired an industrial group servicing the global market with some European production, as well as plants in the USA, India and China. I now realise I was in charge of complex supply chains. They did not cause problems at the time, despite the fact that components and finished product crossed many borders both within and outside the EU.

I have two main conclusions from my experience. The first is it is true that just in time and high quality production required careful management of suppliers. Sourcing was global, not regional. There is a high degree of mutual dependence in modern industry on a range of suppliers around the world. Large companies do not rely just on the EU or just on the US these days.

The second is we had no more difficulties with non EU sourced components than with EU products, despite all such products if needed in EU based factories having to come in under WTO rules.

The crucial things we had to manage were the quality and quantity suppliers could deliver, and the ability of the transport system to deliver them over long distances in some cases. Government interference in the process was rarely the main problem. Goods moved with electronic manifests, were always traceable and well known to the authorities in the countries they were travelling through.

There is absolutely no need to bend or drive UK policy on some fear about supply chains. Cheaper good quality components and products will still get there from EU and non EU places as they do today, whatever Agreement or lack of Agreement we end up with.

In the case of the pharmaceutical industry some claim to worry about the degree of UK/EU business integration, whilst ignoring the fact that UK/US business integration is much closer for the majors and takes place across WTO rules based frontiers.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

151 Comments

  1. duncan
    Posted March 6, 2018 at 5:43 am | Permalink

    What an utterly tiresome and tedious farce this is becoming. I think most appreciate the complexities in depoliticising our nation, its politics and its affairs from the autocracy and deliberate complexity of the EU but having anti-democratic forces beavering away in the UK to frustrate the decoupling process borders on unethical

    Most expected the grotesque party to put clear water between themselves and the Tories. It’s what they do irrespective of the damage they cause but to witness the pathetic CBI doling out praise to Corbyn and McDonnell borders on the surreal. At that point I realised that there is nothing the Remain won’t do to achieve their aim of circumventing and weakening democracy

    These Remain groups bombard Ministers with pleas and persuasions because they know this PM is still to be persuaded. These groups are aware of her sentiments. She’s a manager of an event rather than a leader. Most Tories desire a leader with convictions to confront the dual threats of the EU and the more pernicious and destructive threat that is collectivist Labour

    When the UK signs its first FTA (Free Trade Agreement) that will be provide unquestionable proof that we are free of the sclerotic meddling of the EU.

    We need a FTA with the US and Trump. If the next POTUS is a democrat our chances of a FTA with the USA will be greatly diminished

    • Lifelogic
      Posted March 6, 2018 at 7:49 am | Permalink

      “anti-democratic forces beavering away in the UK ”

      Well these UK bureaucrats, politicians and the BBC have been doing this for about 50 years – ever since they managed to con the voters into remaining in the “Common Market”. It will take quite a lot to stop them. May & Hammond were clearly doing this until the referendum and still are I think.

      They are mainly the same people as push the hugely exaggerated climate alarmism agenda and want an ever bigger state and even higher taxes I find.

      We can see the quality of our MPs by the fact that only 5 voted against the climate change act and only 13 voted against the bombing of Libya which has such huge and pointless damage. Countless other absurd votes with similar margins in the wrong direction.

      Analysis (Town v Gown) radio 4 was quite interesting last night. Rather showing that the university “educated” often get infected with group think propaganda on the EU, Climate Alarmism and Lefty, Magic Money Tree, PC Economics. I think mainly that tend to be mainly innumerate art graduates not the engineers, physicists & mathematicians who are often rather more in touch with reality. Needless to say the BBC line was more of a “should only “university educated” people be allowed to vote” so we can get back into the EU.

      https://www.bbc.co.uk/programmes/b09tcvp4

    • Hope
      Posted March 6, 2018 at 8:47 am | Permalink

      May is a remainer. She has allowed an EU weakness to become a strength! The peace agreement has nothing to do with the Irish border. The Irish need a trade agreement without it they are in dire straights. The same Irish country loaned £7 billion by the British taxpayer because Cameron stated the U.K. Would not bail out EU countries. It did and the Irish were loaned a lot of money. Compare to Irish PM comments asking Sien Fien to take up their seats and the EU holding talks with them yesterday.

      When is May going to act on our mandate and vote? When is she going to get savvy and stop kowtowing to every demand or suggestion. Why does theUK have to give £100 billion to talk about trade, why does ECJ apply in this country after we leave, why is there a need for an extension, why does immigration continue during her extension, why does regulatory alignment apply for an indefinite period when it should apply to business only exporting to the EU, why should 27 EU countries dictate e UK trade policy, why would divergence cost the U.K. A lot of money, why does May give away security unconditionally to promote EU foreign policy. What has the EU given away in these capitulation talks with May? Why are Leave MPs tolerating this? Why does May never rebutt all the false guff in the press or allow remainers to visit Barnier adfinitum to undermine the U.K. Negotiation?

    • rose
      Posted March 6, 2018 at 9:42 am | Permalink

      The PM jumping in to bat for the EU in its breathtakingly hypocritical crusade against USA tariffs is worse than farcical. She just doesn’t seem to want to get on with our natural ally.

      • BrexiteerwivMusket
        Posted March 6, 2018 at 10:48 am | Permalink

        The Chancellor was the same recently with signing a joint EU Minister letter to the US administration complaining about the tax cuts both to corporations (US ) and to citizens (US ) of a sovereign nation ie America. What utter complete nonsense from a British Chancellor!. Even Brown as Chancellor and PM was not as challenged in his knowledge of how the world works and life itself. But Mrs May has her bouts of unbecomingness in regard to the US too. What US President could take either of them seriously as statesmen? They make the UK look like a Mickey Mouse country with jam butty mines.

  2. Mark B
    Posted March 6, 2018 at 6:07 am | Permalink

    Good morning.

    Leaving the EU is a political matter revolving around governance and not trade.

    Whatever that shill, the CBI says should be taken with a fist full of salt. It receives monies from the EU, has only large corporate bodies as members, and acts only as a lobby for their interests. It does not represent Britain as a whole but large multinational corporations.

    These corporations like the SM because it is a means to game the system. By creating evermore complex and costly regulation they can strangle competition within and prevent it from without the SM.

    Having our rules come from Brussels no longer makes us a free nations. Certainly many regulations are made internationally but, the UK will be able to sit on the top tier of those tables alongside the EU and help make the rules. It is at that level the UK will be able to regulate its market and, if something internationally is proposed that does not serve UK national and international interests, the HMG can block or amend them.

    HMG outside the EU will not only find its voice, it will have more power globally. Europhiles talk of influence in the EU if that is something we should aspire to. Have naive ! Leaving the EU will allow the UK to have real POWER globally.

    Our kind host talks about taking control of our borders, monies and laws. But the real dividend for leaving the EU (not the rEU27) is POWER !!! And it is that POWER of an independent UK they absolutely fear the most.

    • Hope
      Posted March 6, 2018 at 8:52 am | Permalink

      Now May has publicly stated she will not resort to WTO or walk away what bargaining chips does she have when the EU come back? Where does this stand with her alleged no deal is better than a bad deal? Phase one shows a bad deal.

      Yesterday she was blaming developers for HER mass immigration policy! May’s Govt cannot afford public services and is about to hike community charge, but cannot clear roads, provide health care, schools, police adult care or flood defence! But May has capitulated and is willing to give child benefit to EU citizens who have not been born yet and do not live in the U.K. FFS! Child benefit to about £33 million given to children not living in the U.K.! Then we have the foreign aid fiasco of about £14 billion of which a sixth is give to the EU to spend as it wishes without a say from any U.K. Politician! Will this carry on JR?

    • Adam
      Posted March 6, 2018 at 4:39 pm | Permalink

      Power is vested in any independent purchaser. Price is an exquisite value balance. High quality products & services exert great weight on the Yes side of their scale. Added costs, delays & other complex nuisance bear down heavily on the No side.

      A seller’s ideal is the highest price, consistent with an affirmative decision to buy, however light the decisive Yes weight might be.

      The shimmering beauty is the purchaser’s choice of what suits. A seller adding the tiniest weight on the wrong side of the value scale, results in so sale at all. Worse still, their competitor wins the business.

      Tariffs pose risk. They might increase income, or tip unsold goods off the scale into the unwanted waste bucket.

    • acorn
      Posted March 6, 2018 at 5:15 pm | Permalink

      The UK has recently lost its Judge seat on the UN International Court Of Justice. The UN Security Council voted in the Indian candidate after the UK retired hurt.

      “The decision to bow to mounting opposition within the UN general assembly is a humiliating blow to British international prestige and an acceptance of a diminished status in international affairs.” (Guardian: 20 Nov 2017)

      Post Brexit, the UN General Assembly, will come looking for our seat on the Security Council. Our aggrieved ex empire colonies, see Brexit as pay-back time for them.

      • NickC
        Posted March 7, 2018 at 8:49 am | Permalink

        Acorn, If on the other hand we had voted to dissolve our nation into the EU empire the UN would have come looking for our seat on the Security Council anyway. What’s the point of a seat for a non-country? And not least to give it to the EU with its new army that you lot said was a myth.

        • acorn
          Posted March 7, 2018 at 5:58 pm | Permalink

          France will continue to represent the EU as a permanent member of the EU.

    • margaret howard
      Posted March 6, 2018 at 11:00 pm | Permalink

      Makes you wonder why we begged to join in the first place.

  3. Henry Spark
    Posted March 6, 2018 at 6:12 am | Permalink

    You write: “… we had no more difficulties with non EU sourced components than with EU products, despite all such products if needed in EU based factories having to come in under WTO rules”. This is gibberish. What on earth do you mean? It is simply false to assert that WTO rules create an obligation on states or on the EU to let goods into their markets.

    “In the case of the pharmaceutical industry some claim to worry about the degree of UK/EU business integration, whilst ignoring the fact that UK/US business integration is much closer for the majors and takes place across WTO rules based frontiers”. “WTO rules based frontiers” – again, utter quackery, and ungrammatical too. This phrase is devoid of any meaning at all.

    The case for Brexit gets thinner by the day, and posting twaddle like this helps to highlight that. So thank you!

    • Roy Grainger
      Posted March 6, 2018 at 7:45 am | Permalink

      John is saying that currently we import components from both inside the EU (from within the single market) and also from outside the EU. Those latter imports are made under WTO trading rules which specify the mutually agreed tariff basis. Which bit of that don’t you understand ? Seems perfectly clear to me.

      His point on pharma is that UK businesses are more integrated with US major pharma companies who are outside the EU than they are with EU-based pharma companies. Again, perfectly true and simple.

      You may have a point in your trivial and pedantic quibble about grammar though.

    • Edward2
      Posted March 6, 2018 at 8:15 am | Permalink

      The EU does not currently stop goods entering from non EU nations.
      Are you saying they will refuse goods from just the UK after we leave.
      You are completely wrong about the role of the WTO.
      The WTO does “create an obligation” on nations signed up to its rules to allow goods to pass.

    • sm
      Posted March 6, 2018 at 9:25 am | Permalink

      Henry, our host’s credentials and experience of trade regulations both as a businessman and an MP are open for all to see.

      It would be helpful if you would tell us what direct experience and knowledge you have that makes you claim this post is ‘gibberish’.

    • acorn
      Posted March 6, 2018 at 9:41 am | Permalink

      The WTO can’t sanction any of its members and has no such powers to make rules for frontiers. It cannot initiate a trade dispute, only individual members can do that to other members if they win a dispute under WTO resolution procedures. Have a read of “Top 10 Reasons to Oppose the World Trade Organization? Criticism, yes … misinformation, no!”

      • NickC
        Posted March 6, 2018 at 3:56 pm | Permalink

        Acorn, The WTO works on the basis of mutual interests and mutual recognition, rather than the centralised, legalistic authoritarianism of the EU. This makes the WTO fairer, more effective, more efficient, and more user-friendly. Clearly the WTO has the remit to enforce cross border (frontier) trading rules (for 98% of global trade).

        You are wrong about disputes too. From the WTO website: “Without a means of settling disputes, the [WTO] … would be less effective because the rules could not be enforced. The WTO’s procedure underscores the rule of law and … is based on clearly-defined rules, with timetables for completing a case. First rulings are made by a panel and endorsed (or rejected) by the WTO’s full membership.”

        • acorn
          Posted March 6, 2018 at 4:36 pm | Permalink

          The WTO can’t enforce anything on a sovereign nation state. It does not have the status of an international court. Trump wants to take the USA out of it and only have bilateral agreements. If that happens, the WTO is finished. The EU and ASEAN states plus China, don’t need it. The WTO is adding a level of supra-national complexity that is no longer needed now there are three major trading blocs.

          • NickC
            Posted March 7, 2018 at 9:01 am | Permalink

            Acorn, Not everything in the world works in your EU’s top-down centralised rules with punishment big-nanny regime way. We don’t have one world government, thank God. The EU adds huge complexity, and by your own admission WTO precisely does not. And basing your argument on your own guesses about the future is self-serving.

        • hans christian ivers
          Posted March 6, 2018 at 4:48 pm | Permalink

          NickC

          How many disputes have the WTO solved that has actually worked in favour of the complainant in the past 5 years and the ruling has been enforced?

          • NickC
            Posted March 7, 2018 at 8:52 am | Permalink

            Hans, Most complaints are solved by arbitration.

    • Denis Cooper
      Posted March 6, 2018 at 9:55 am | Permalink

      I understood what was meant without any difficulty. There is “gibberish” on this site, but from you and your kind.

    • graham1946
      Posted March 6, 2018 at 10:02 am | Permalink

      Twaddle, gibberish and grammatical errors. This gruel indeed. The Remainers case gets more threadbare by the day.

      • Posted March 6, 2018 at 5:03 pm | Permalink

        That is true, Graham. And if only remainers would occasionally put together a cogent argument for staying shackled to the execrable EU, then perhaps we might have a basis for reasoned argument. But they ONLY seem to snipe and/or churn out project fear soundbites.
        Do we ever hear any sound argument for staying in? Indeed – is there one? Just one?

    • Augustyn
      Posted March 6, 2018 at 2:51 pm | Permalink

      Mon Cher Henri
      I have to say to you that JR is not talking twaddle. In a previous life I created a global network of some 20+ warehouses to distribute manufactured products to a worldwide customer base and all managed from a logistics centre in London. We undertook many thousands of transactions per year. I experienced no difficulty whatsoever in importing EU goods into my US, Singapore or Hong Kong warehouses. Nor did I have any difficulty in bringing products from the US, Chile, Australia … into my EU warehouses in Paris, Southampton or my satellite locations like Stockholm, Tallin, Riga ….
      To be succint any border issues which might arise on Brexit will be caused by political decisions and not from logistics or supply chain or Customs reasons.

    • Libertarian
      Posted March 6, 2018 at 7:39 pm | Permalink

      Henry Spark

      I run a small pharma company. You dont have a clue what you’re talking about….

  4. Nadine
    Posted March 6, 2018 at 6:20 am | Permalink

    This seems reassuring, but please, what are “WTO rules based frontiers”? Do you mean that the WTO makes sure that after Brexit we can trade with the EU in the same way as we do now?

    • zorro
      Posted March 6, 2018 at 7:58 am | Permalink

      For crying out loud, just read the piece instead of misinterpreting it! John is saying that it is perfectly possible now to run a business with supply chains within both EU or non EU countries, and will still be pissible after we leave the EU as we can do so as a member of WTO and their rules based regime governing trade around the world. It is deceitful remainers who invent these problems of ‘complex, intricately interwoven supply chains’ to try and frustrate our leaving. All you do is criticise and belittle people. My advice is don’t bother because we can manage our own affairs, and you are wasting your time, effort, and wrist/finger power!

      zorro

    • Toffeeboy
      Posted March 6, 2018 at 3:17 pm | Permalink

      As I’ve said previously on this blog, Mr Redwood is making the dangerous assumption that the WTO will continue to exist five years hence. If you doubt me, ask yourself if Mr Trump’s a fan, and if you conclude not, ask yourself if it can continue to exist without the US’ leadership. I’d suggest not. It’s becoming clearer by the day that hopes of a beneficial trade deal with the US are rapidly turning to dust. Looks like this country couldn’t have chosen a worse time to opt for turning our back on our European FRIENDS.

      • Posted March 6, 2018 at 5:09 pm | Permalink

        Well, Toffeeboy, remainders certainly made the ”dangerous assumption” that the EU will exist in five years’ time. There is a school of thought that posits the idea that it is already beginning to disintegrate. It’s time for the UK to devise its own destiny.

        • jerry
          Posted March 7, 2018 at 7:57 am | Permalink

          @L Jones; “There is a school of thought that posits the idea that [the EU] is already beginning to disintegrate.”

          A school of thought from those fundamentally opposed to the EU. They made the same comments back in the late 1980s with regards the ERM/Euro, in the 1990s when the EU allowed ex Warsaw block countries to join, again in 2009 during the Banking/Euro crisis, again post Brexit referenda, now they make them again post the Italian elections… Mind if I don’t hold my breath?!

      • getahead
        Posted March 6, 2018 at 5:13 pm | Permalink

        Toffeeboy it seems to me you are confusing the EU and Europe. The EU is a political construction based on Brussels. Europe is a continent of many nations. Whilst the nations of Europe are our friends, the EU is manifestly not.

      • Jagman84
        Posted March 6, 2018 at 6:05 pm | Permalink

        It’s a dangerous assumption to believe rhat the EU will exist in five years time. A successful UK, outside of its tentacles, will hasten its demise. Europe will survive without its malevolent influence.

      • James Thomas
        Posted March 6, 2018 at 6:19 pm | Permalink

        It is more likely that the EU will decline and fail! Given the lack of democracy in EU governance, imagine how the EU might struggle to survive one or two more crises with a disgruntled EU population only able to vote for every increasingly anti-EU parties. With several anti EU countries acting together it is possible to imagine a right wing takeover of the non-elected EU power base and what then? The Italian elections point to a seismic shift away from support of the EU by a founder country populated, in the main, by decent friendly people. Why would we wish to chance being involved in the unstable EU future for little or no gain?

      • jerry
        Posted March 6, 2018 at 6:50 pm | Permalink

        @Toffeeboy; It is you who need to understand what Trump is saying about the WTO (free and fair trade), it is the structure of the treaty, not its ideals that are the problem. Anyway, so what if the USA does step outside of the room marked WTO, that still leave 166 countries the UK can trade with under WTO rules, and even if the WTO is superseded, after all the WTO replaced GATT.

        As for turning our back on our European FRIENDS trading neighbours, is anyone seriously suggesting we will not be buying French win or German cars etc. in 12 months time?!

      • Libertarian
        Posted March 6, 2018 at 7:40 pm | Permalink

        Toffee boy

        stick to sweeties, you haven’t got a clue about international trade

    • NickC
      Posted March 6, 2018 at 3:23 pm | Permalink

      Nadine, JR’s phrase “WTO rules based frontiers” is shorthand to describe the process of imports and exports across the frontiers of WTO member trading nations, whilst complying with WTO rules. WTO rules cover 98% of all global (ie imports/exports, not domestic) trade. Compliance is high and disputes few.

      The WTO states: “Resolving trade disputes is one of the core activities of the WTO. A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO. The WTO has one of the most active international dispute settlement mechanisms in the world.”

      Once independent, the UK will trade with the EU under WTO rules, not the current EU system (itself having to comply with WTO rules), augmented by a FTA perhaps. Trading will be similar, but under different rules. Trading rules are not the same as technical standards.

  5. Lifelogic
    Posted March 6, 2018 at 6:34 am | Permalink

    Indeed. Advice from overwhelmingly reamainer/greencrap/big government bureaucrats and indeed academic experts is so often totally duff. They are in the over regulation and bossing people arround business after all. Unfortunatlely MP, Lords and Conservative MPs are still largley pro remain.

    What an absurd speech from socialist May on housing. Perhaps she was give hugely duff civil Service advice there too. She clearly has not got a clue about how private businesses and development work. Land banking by developers is rarely if ever the problem if the development makes ecomic sense it gets done.

    All the housing problems, almost without exception, are caused by very bad government. Over taxation through stamps duty, corp tax, cgt, utility connection taxes, social housing requirements (a tax on buyers), Hammonds lets rip of Tenant’s and Landlords taxes, OTT green crap building regs, restrictive planning, expensive planning conditions, planning delays, planning costs, building control costs, bat, tree etc. survey costs and then we have open door immigration – which May has now clearly decided to retain (despite promising the reverse a short while back). Also daft regulatory bank lending restrictions on property loans.

    Lecturing developers just shows that she is either a totally ignorant idiot or just dishonestly looking for a scape goat. I think the former myself.

    • Sir Joe Soap
      Posted March 6, 2018 at 7:04 am | Permalink

      I think you will find that were we not trying to house half of the developing world on 100 x 100 miles of south east England the “housing” problem, such that it is, would disappear.

      • Sir Joe Soap
        Posted March 6, 2018 at 7:07 am | Permalink

        It is actually a “people” problem, not a housing problem. Unless, as a government, you assume continuing mass immigration. Only then does it become a “housing” problem.

        • Lifelogic
          Posted March 6, 2018 at 12:47 pm | Permalink

          Indeed and T May has said she now intentds to retain open door EU immigration, regardless of merit or quality. This despite promising the complete reverse quite recently.

        • Posted March 6, 2018 at 5:12 pm | Permalink

          Yes, Sir Joe, and we’ve heard now there’s also a ”transport crisis”. So, to lump them all together -”transport crisis”, ”housing crisis”, ”NHS crisis”, etc – and let’s call it what it is – a ”population crisis”.

      • W.A.Laugh
        Posted March 6, 2018 at 6:06 pm | Permalink

        Based on HDI, only 1.2 bn out of 7.3 bn people on this planet would qualify as “developed”. Half of 6.1 bn is roughly 3 bn people. As you say, adding 3 billion people on the 10,000 square miles of the South East England is likely to create a problem, as that will increase the population density to more than 100,000 inhabitants per square kilometer, i.e. only leaving about 10 square meter per person. As you so intelligently say, a real nightmare …

    • agricola
      Posted March 6, 2018 at 8:11 am | Permalink

      True, during the past 21 years there has been a failure to deal with the demand end better known as immigration. Since 1997 population has increased by around 8 Million which averages at 380,000 per annum or a city the size of Nottingham every year. I would point out that these are the ones we know about. With porous borders and next to no deportation, the real figures are anyone’s guess. Problem is the establishment are so up their own backsides with political correctness it cannot be admitted.

    • rose
      Posted March 6, 2018 at 9:52 am | Permalink

      I wasn’t taken in, Lifelogic, if that is any comfort. In fact I can’t think of a May speech and its aftermath of wooly answers and interviews which has annoyed me more – for the reasons you give.

      The sight of this rich woman and the colossally overpaid broadcasters waffling on about their latest discovery, inequality, was nauseating. She has no interest in the creation or preservation of wealth, only in its dissipation. How dare she say she is worried about people in their thirties? What she means is she wants a stupid way of getting them to vote for her rather than Corbyn.

    • Lifelogic
      Posted March 6, 2018 at 12:57 pm | Permalink

      I see that the Chairman of Pentland Homes Ltd agrees that May and Javid have shown once again they do not understand the housing market. He is quite right in his letter to the Telegraph today though he is far too polite to them. They are totally clueless and one assumes their advisors are too – or worse lying.

      The government is almost entirely the problem here, as usual. Just get them out of the way if you want more houses dear.

      • jerry
        Posted March 6, 2018 at 8:06 pm | Permalink

        @LL; “May and Javid have shown once again they do not understand the housing market”

        They do not need to understand the “housing market”, they just need to understand the housing problem, which in some ways is the “housing market”…

        “The government is almost entirely the problem here, as usual. Just get them out of the way if you want more houses dear.”

        Strange that, between 1950 and the late 1970s we did not have a housing problem, millions of houses (both LA and private) were built (at one point 200 to 300 millions each year), in fact whole new towns were built, and all were built with a high to very high degree of govt, centralised involvement -both Tory and Labour!

        The property speculator is almost entirely the problem here, as usual. Just get them out of the way if you want more houses dear, and indeed if she keeps her word Mrs May might just do so.

  6. Sir Joe Soap
    Posted March 6, 2018 at 7:10 am | Permalink

    Well the Italians seem to have decided they don’t much like being an EU member, either. They seem to have the disadvantage of being a little behind us as a population, but the advantage that they have two anti-EU parties and we seem to be stuck with about 0.5 of an anti-EU party.

    • Lifelogic
      Posted March 6, 2018 at 1:02 pm | Permalink

      Indeed my wife is italian and certainly in her region near Verona they seem very anti EU indeed. Rightly so.

      Hague today says Populism and Nationalism are marching across the continent destroying social democracy as they go. Alas not here where we have a socialist PM with a broken compass and Zero leadership skills.

  7. Peter
    Posted March 6, 2018 at 7:25 am | Permalink

    The theme is that life is too complicated so we should not stray too far from the EU.

    A similar argument is deployed saying it will be a disaster if we leave the European Medicines Agency. Britons will be falling ill and dropping dead unnecessarily.

    With the trade argument there is also an implied threat that the EU can mess up British industry out of spite if we upset them.

    Life is as simple as you want it to be. We managed nicely with the EU and the EMA in the past and we can do so in future too.

    • Peter
      Posted March 6, 2018 at 7:27 am | Permalink

      Without the EU and EMA.

  8. stred
    Posted March 6, 2018 at 7:45 am | Permalink

    http://www.acea.be/statistics/article/motor-vehicle-trade-between-the-uk-and-main-eu-partners

    This shows how vulnerable Germany would be to an increase in tariffs on cars to the UK and US and how the UK could easily substitute home production for German. Japanese manufacturers coud easily switch just in time suppliers from factories outside the EU. They invented JIT.

    I am very pleased that my little new Citroen C! is really a Toyota.

    • Denis Cooper
      Posted March 6, 2018 at 10:37 am | Permalink

      I wonder how many people will open that link … they should do, because there is the picture that was painted by David Cameron, George Osborne et al:

      “80% of the UK’s automobile production is exported, of which 52.8% (worth €14.6 billion) goes to EU member states.”

      And then there is the other side that they very carefully never mentioned:

      “THE OTHER WAY ROUND, the EU represents 81% of the UK’s motor vehicle import volume, worth €44.7 billion.”

      €44.7 billion imports divided by €14.6 billion exports = 3.06.

      In value car imports into the UK from the rest of the EU are THREE TIMES the exports from the UK to the rest of the EU; the UK runs a trade surplus in cars with the rest of the world outside the EU, not with the rest of the EU:

      http://johnredwoodsdiary.com/2017/03/17/movement-in-eu-thinking-on-brexit-and-populism/#comment-860687

      From the figures given above in terms of value about 89% of new cars purchased in the UK have been imported: €6.9 billion are manufactured in the UK and are not included in the 80% of production which is exported, plus €55.2 billion imported = €62.1 billion total, €6.9 billion divided by €62.1 billion = 0.11.

      • stred
        Posted March 7, 2018 at 11:11 am | Permalink

        Trump, rightly, decided the US needs steel and aluminium for strategic reasons and the US charges 2.5% tariff on EU cars while the EU charges 10% on US cars. BMW and Volkswagen make cars in the US. JLR doesn’t.

        So May and her Europhile civil servant quickly send a protest message to Trump on behalf of the EU, although apparently, we are leaving in 12 months time. And we do nothing to protect UK steel and aluminium. Absolutely bloody brilliant.

    • Ed Mahony
      Posted March 6, 2018 at 12:25 pm | Permalink

      You’ve just presented an accountant’s spreadsheet. Important as numbers, you fail to address the key point of brand loyalty.

      Many people like to buy German cars because of an important mixture of performance + reliability (‘Vorsprung durch Technik’ and all that) + style. And are willing to pay extra for that (especially as the middle classes have more money to spend on brands they like as opposed to working classes who are more dependent on deals / price)

      This gives German cars an important advantage over similar cars made here that rely on close margins / price for sales.

      Yes, we still are very strong in the high luxury market, but so are the Germans. My main argument is about more ordinary / day-to-day cars, that bring in much greater (potential) revenues overall.

      And a similar argument can be made for the USA, and why Americans buy German cars. ”Why Americans Love To Buy German Cars” by the Wall Street Journal (article a bit old but still valid). Trump might know lots about hard-nosed property development but appears to know zilch about how branding works in capitalism vis-a-vis American versus German cars.

      A trade war on cars will negatively affect Germany but will affect the USA more (similar for any stand-off between the UK and Germany over cars).

      • Ed Mahony
        Posted March 6, 2018 at 12:33 pm | Permalink

        And what SOME Hard Brexiters and Trump-like Republican capitalists fail to realise is that you need to help and nurture the high tech industry – and over many years.

        There are no cheap solutions to building up an economy (and de-regulating the financial sector only leads to high-risk taking and over-heating, ending up in boom and bust and the baling out of banks like here in the UK that had to happen or our country would have sunk into economic depression).

        Rather than trying to rely so much on politics and superman-like power to try and build up the American economy, Trump would do well to listen more and think harder and more creatively, and with patience, about how to build it up.

        • Hope
          Posted March 6, 2018 at 5:30 pm | Permalink

          No such thing as hard brexiteer. Stop smearing people. People voted leave. Not hard or soft. Leave. Grow up.

      • Original Richard
        Posted March 6, 2018 at 11:25 pm | Permalink

        “Many people like to buy German cars because of an important mixture of performance + reliability (‘Vorsprung durch Technik’ and all that) + style.”

        “Vorsprung durch technique” *(but also ed) (some) fitting diesel cheating emissions devices in order to promote sales etc ed.

  9. agricola
    Posted March 6, 2018 at 7:45 am | Permalink

    Absolutely correct in all respects. Your experience mirrors mine. Quality products can come into the UK and leave the UK on a just in time basis with absolute reverse traceability right back to the composition of the melt of material from which they were made. Since the influence of Professor Deming was taken up, first in Japan, it is the way manufacturing industry works.

    Noises off from the CBI and such are down to large manufacturers wishing to continue their control of the EU market in association with continental manufacturers of a similar size, often to the detriment of more enterprising smaller businesses.

  10. oldtimer
    Posted March 6, 2018 at 7:47 am | Permalink

    Agreed. A tsunami hitting Japan or an earthquake in Taiwan are the unknowns to worry about.

    • agricola
      Posted March 6, 2018 at 10:29 am | Permalink

      Yes a problem for those in the firing line. However , apart from causing worry when the Kobe earthquake happened, it did not interrupt the supply of components to the UK for any of my customers. great credit to the Japanese.

  11. Kenneth
    Posted March 6, 2018 at 7:48 am | Permalink

    Ever since we voted to leave the eu there has been a campaign to persuade us that Brexit is “complicated”.

    The BBC has been pushing this line and this theme runs through their radio 4 series “Brexit: A Guide for the Perplexed”.

    Sadly, I think this “complicated” campaign has had some success despite it being a fantasy.

    • NickC
      Posted March 6, 2018 at 4:04 pm | Permalink

      Kenneth, Indeed, and the group of people who insist it is all too “complicated” are the same group which used to insist that the EU was as small as Derbyshire county council, and made hardly any of our laws.

  12. Anonymous
    Posted March 6, 2018 at 8:00 am | Permalink

    On David Willets.

    If we’re going to get socialism by voting Tory we may as well not bother turning out. Prepare for Corbyn, I’m afraid.

    Make a serious attempt with stopping uncontrolled immigration and you might just get redistributive tax policies through.

    • Anonymous
      Posted March 6, 2018 at 8:15 am | Permalink

      We all know that a significant amount of the extra council tax proposed will not be going to help British millennials.

  13. BartD
    Posted March 6, 2018 at 8:16 am | Permalink

    Best thing to do after we leave and go to WTO rules is for businesses to consolidate and bring their component making factories back all under one roof, that way there will be no need for parts to be crossing frontiers and will remove the chance for delays at customs checks and warehousing delays etc.

    • NickC
      Posted March 6, 2018 at 4:08 pm | Permalink

      BartD, Come on . . . that’s too sensible . . .

  14. duncan
    Posted March 6, 2018 at 8:33 am | Permalink

    After watching this pathetic excuse for a PM give her recent speech regarding UK-EU relations I am now more certain than ever that Brexit is being deliberately stalled and this PM is little more than a front for pro-EU forces.

    We will be betrayed by our own party. The fact that she’s not been dethroned suggests to me the entire Tory party within the Commons are also lining up behind her to frustrate the referendum result

    The electorate will takes its revenge against anti-Brexit forces in both main parties at the next GE

    • graham1946
      Posted March 6, 2018 at 10:12 am | Permalink

      Yep. Pretty much my view since was was appointed (not elected).

    • Peter
      Posted March 6, 2018 at 10:22 am | Permalink

      It may well be that the EU will cut to the chase and force her to make a simple decision – in or out. No hiding place. No more delays. No special deals.

      We will then see what happens. If she cannot deliver she may be unseated by her own party at that stage.

    • Peter
      Posted March 6, 2018 at 11:07 am | Permalink

      On the other hand, her use of the phrase ‘binding commitments’ is a worry. It sounds like appeasement rather than playing to our strong hand.

      It was a clever speech insofar as it kept her party quiet. They may have put party survival and personal interest before a strong stance. Or they may just be allowing her more time to justify making their move.

      I don’t know how it will pan out in the end. I am sure there is no middle ground though. We are either out or totally compromised and humiliated.

      • NickC
        Posted March 6, 2018 at 4:28 pm | Permalink

        Peter, Mrs May’s Mansion House speech contained enough key elements to satisfy a quick glance by the MSM and most Tory MPs. She used trigger phrases – we will leave the EU and the EU’s single market, and not be in a or the customs union – to elicit the “right” response.

        The problem is the bulk of her speech was either outright appeasement, or a ghastly stew of special pleading and political correctness. It contained neither principles, nor patriotism, nor erudition nor salesmanship. Her entire approach is wrong; and she cannot seem to separate independence from trade.

      • Mark B
        Posted March 6, 2018 at 8:10 pm | Permalink

        I don’t know how it will pan out in the end.

        Betrayal

    • The Prangwizard
      Posted March 6, 2018 at 3:26 pm | Permalink

      As I have written many times before it is party before principle, party before country, party before everything with these Tories. I have always support conservative views but I didn’t learn this until recently, naive and trusting as I was. Now I am just bloody angry.

      As you say Duncan, May and this party is going to sell us out with her as leader.

    • Original Richard
      Posted March 6, 2018 at 11:16 pm | Permalink

      “After watching this pathetic excuse for a PM give her recent speech regarding UK-EU relations I am now more certain than ever that Brexit is being deliberately stalled and this PM is little more than a front for pro-EU forces.”

      The time it is taking to negotiate leaving the EU, which looks like will be extended by an indefinite “transition” period, “managed divergence”, continued “regulatory alignment” etc., gives the impression that the UK government/Civil Service is colluding with the EU in hoping that if leaving takes long enough the country will eventually either change its mind over leaving or some event will occur to make leaving unworkable.

  15. Bob
    Posted March 6, 2018 at 8:34 am | Permalink

    If the USA are to raise tariffs against cars from the EU it should give Mr Barnier an increased sense of urgency to maintain access to the UK market.

    • Rien Huizer
      Posted March 6, 2018 at 11:12 am | Permalink

      The UK market is part of the EU, for the time being.

      • Timaction
        Posted March 6, 2018 at 3:37 pm | Permalink

        Tick, tock!

  16. Woody
    Posted March 6, 2018 at 8:40 am | Permalink

    Its becoming amusing how those of a remoan persuasion are trying to make obstacles out of things like trade deals and the border .. your article a few days ago pointed out how farcical the argument that the irish border must be hard is and surely, for rational people, that will have closed down the argument for the need for customs borders. Now I regularly read childishly mocking opinions that WTO rules are not going to be effective in allowing us to trade with the rump of the EU, despite the fact, as you have pointed out, these WTO rules allow us currently to trade with the world…. and the larger proportion of our trade is currently with the real world not with the EU. “The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows smoothly, predictably and freely as possible.” World trade is what the organisation was created for.

  17. alan jutson
    Posted March 6, 2018 at 8:52 am | Permalink

    Seems to me John our Prime Minister takes far too much so called advice/lobbying from people, departments and industry, which inevitably has a particular cause to promote.
    Which is usually their own.

    She always seems to agree that everything is complicated, and requires micro management, just like our own tax system and law, which is now fast becoming a fiasco.

    The EU has now got itself in the driving seat, simply because they insist on all of these micro points being discussed, and she has fell for it hook line and sinker.

    The EU are playing for time, and they are winning that one because we are wanting a transition period now, so a two year extension requested will be agreed.
    Time that will be used by the EU to try and take some companies out of the UK whilst they extend talks far beyond March 30th 2019.

    Just look at Northern Ireland and its border, look at how this has been interwoven with the peace process, so that we look like the bad guy’s.
    Why does not Ireland offer a sensible solution itself, if it is so worried.

    Mrs May had a hugely strong hand at the outset with these negotiations, but she is giving ground on almost everything now, by trying to be friendly and reasonable with politicians who will only be in place for a few more months/years, whilst she ties us up the Country for decades.

    She has yet to learn that you start off any negotiation by demanding far more than you ever want or are likely to get, in order to end up with something close to what you want.
    You do not offer reasonable terms first and then.

    In short Mrs May is failing, and failing fast.

    • alan jutson
      Posted March 6, 2018 at 8:55 am | Permalink

      You do not offer reasonable terms first and then capitulate on those.

    • NickC
      Posted March 6, 2018 at 4:41 pm | Permalink

      Alan Jutson, There is a theory circulating within the civil service that “soft power” is hugely important, and that the UK is good at it. Apart from being a colossal exercise in vanity, I doubt that most countries in the world give a t0ss about our “soft power”, or our self-styled reasonableness. In fact if they bother to think of the UK at all I suspect they are flabbergasted at how much we are appeasing the EU.

    • DaveF
      Posted March 7, 2018 at 10:23 am | Permalink

      alan jutson..it’s not possible for Ireland to offer a sensible solution that would be accepted because the DUP doesn’t do sensible solutions..after all they backed the tory brexiteers in the referendum vote..the DUP is about being differenand t tto the great majority on the island not sensible, it’s like wanting to appear at times more tory that the tory right wingers to show their loyalty to the Unionist cause..if you get my drift

  18. Bert Young
    Posted March 6, 2018 at 8:56 am | Permalink

    International business is a straightforward arrangement . Apart from the distances involved and the occasional need to make eye to eye contact with suppliers and customers , there are mostly advantages . Certainly the financial settlements involved in the international business I was involved in over a period of 18 years were quicker . My Japanese clients , when presented with an invoice , settled their account in 48 hours ; German clients were the worse – often taking up to 2 months !.

    Once the paths to new international business are established , there will be no stopping the opportunities that exist ; our financial services are oriented to the world markets and are there to give support and foster development .

    • graham1946
      Posted March 6, 2018 at 10:15 am | Permalink

      And with those you didn’t know so well, Letters of Credit – almost instant payment.

  19. The Prangwizard
    Posted March 6, 2018 at 8:57 am | Permalink

    On the subject of tariffs the BBC ‘business live” programme has discussed President Trump’s statement that he ‘will’ impose increased tariffs on car imports. They showed that the US tariff is 2.5% at present. They also showed that the EU tariff on cars from the US is 10%.

    They talked only about the danger of Trumps plan No analysis or critisism of the EU’s 10%

    • Prigger
      Posted March 6, 2018 at 10:55 am | Permalink

      It would be extremely difficult for the EU to increase tariffs on its import of Harley-Davidson motorcycles without that company laughing its hat off at the attempt. I shall not educate our economics pundits of BBC and SkyNews Fake News as to why. If they had the slightest knowledge of these matters they would know. I don’t get their exorbitant salaries so I shall not help them.

  20. Richard Jenkins
    Posted March 6, 2018 at 9:00 am | Permalink

    Thank you for this. I am getting very tired of hearing about complex supply chains from people who have never been inside a factory, except perhaps for the occasional photo op.

  21. rick hamilton
    Posted March 6, 2018 at 9:18 am | Permalink

    It wuld help if T.May, or indeed anybody, could just state clearly what the main tariffs would be in the case of No Deal after Brexit. I assume 10% on cars for example but what about essentials like food, fuel, pharmaceuticals, raw materials etc. Big businesses with their hordes of planners and analysts already have the ‘what ifs’ worked out I am sure. Small businesses are probably in the dark and so are their customers.

    At the end of the day international traders will adjust to whatever the conditions are, that ‘s what they do. As I have said before, it’s the movement in the exchange rate that would concern me most. Tariffs at least are a known quantity when settled.

    • alan jutson
      Posted March 6, 2018 at 10:43 am | Permalink

      rick

      Exactly.

      Start to make plans for WTO rules and tariffs now.

      We should have done this long ago, and at the very start, if nothing else we are then prepared, and it would strengthen our hand at the same time should negotiations continue with the EU.

      Cannot understand why we have not done so already

      • Mark B
        Posted March 6, 2018 at 8:25 pm | Permalink

        Cannot understand why we have not done so already

        Because despite the weasel words, they have no intention of leaving the teat of the EU.

    • Denis Cooper
      Posted March 6, 2018 at 11:09 am | Permalink

      It can be very misleading to look at just the main tariffs, but it is also very difficult to work out a valid average tariff which would be more useful.

      According to the EU in 2014, page 10 here:

      https://www.eesc.europa.eu/sites/default/files/resources/docs/customs_en-1.pdf

      “Despite the fact that currently almost three quarters of imports into the EU pay no, or reduced, duties and the average rate is just 1.2 % … ”

      but presumably that includes imports under various EU trade deals which may not be what we will end up having; according to this UK government analysis:

      https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220968/foi_eumembership_trade.pdf

      “UK exporters to the EU would face the Common External Tariff (CET) (weighted average 6.7%), plus administrative burdens (estimated as 2% of the transaction values, resulting in total additional costs of exporting to the EU of 8.7% … ”

      Apparently in its models the Treasury has assumed that under the WTO option UK exports to the EU would face 5% tariffs, which is double that cited by the WTO and much more than the 1% – 2% trade-weighted average calculated by the House of Commons Library in 2013, here:

      http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06730

      Just one of many flaws in Treasury models.

      • rick hamilton
        Posted March 7, 2018 at 8:57 am | Permalink

        Interesting links, but a lot to plough through!
        I couldn’t find a list of external tariffs by product and will look at EU websites to see where they hide it.

        Although we believe that free trade enriches everybody, that’s a very broad brush idea. If we imposed 10% on EU cars coming in and vice versa, the UK government should gain a lot more in duties paid by British buyers than EU governments gain, because imports are 3 times exports. If market demand remains the same, higher prices should push buyers towards UK made cars. Ignoring brand preferences and manufacturers absorbing the price increase to maintain market share, you could argue we would be better off overall as a country in this case. But in reality you can’t ignore these things so who knows how buyers will react ? Businesses will work it out themselves as they always do.

  22. David Cockburn
    Posted March 6, 2018 at 9:19 am | Permalink

    You are right about the BioPharma industry. The FDA in the US is the global leader in regulation, not only because US pharmaceutical prices and volumes are higher than elsewhere but also because it has been the innovator. The EMEA for the EU plays catchup and in any case is largely staffed by Brits.
    I guess when the EMEA moves from London we’ll either have to set up our own replacement or go down the mutual recognition route; one benefit of having our own regulator again would be that we can get rid of NICE which involves a lot of duplication.

  23. MikeP
    Posted March 6, 2018 at 9:26 am | Permalink

    That so many Remainers hang on to these tenuous arguments only goes to show that their claim that Leavers are uneducated Little Englanders is hugely ironic

  24. William Long
    Posted March 6, 2018 at 9:43 am | Permalink

    Civil Servants, many senior executives of large companies anda good many politicians of all parties like nothing more than to be able to beat their chests and say they are a vital part of something even more gigantic. That is why they all love the EU and it is very clear they will not part from it without a terrible fight in which logic and common sense are playing little if any part.

    • Denis Cooper
      Posted March 6, 2018 at 12:56 pm | Permalink

      These are vested interests and understandably it is quite normal for vested interests to resist any change which may weaken their established position.

  25. hans christian ivers
    Posted March 6, 2018 at 9:56 am | Permalink

    this is much more about common standards for the products and H%S in the products than about whether it is inside or outside the EU. (as most products will adhere to EU standards anyway)
    the it is less relevant whether it is pharmaceuticals or chemicals and as we know the government has made it clear that we will follow a number of EU standards also going forward

    • NickC
      Posted March 6, 2018 at 5:20 pm | Permalink

      Hans, Most EU technical standards are international standards that the EU has adopted. We will be doing the same when we are free of the EU. However it does mean we can adopt better or more appropriate standards for our major export markets and the domestic market.

  26. Original Richard
    Posted March 6, 2018 at 9:57 am | Permalink

    The SM/CU issue is firstly about who has the power and controls the UK.

    The EU/corporates/UK Civil Service are all desperately trying to keep control over the UK after we technically leave the EU and are using the threat of trouble in NI to achieve these ends.

    Secondly the EU is desperate to have a “hard” NI/Ireland border because whilst the UK desires open borders for goods and closed borders for illegal immigration for the corporate run EU the opposite is true.

    Today there is a “hard” border between Ireland and NI in that they are two different countries with different rates of excise duty, VAT and general taxation and different health and welfare benefits. Also, neither country is in the EU Schengen agreement.

    There is no reason why import duty cannot also be added to this list and dealt with by trusted trader/electronic customs clearance systems.

    But the EU does not want to be seen as the entity that imposes the hard NI/Ireland border they seek.

  27. Epikouros
    Posted March 6, 2018 at 10:06 am | Permalink

    Another red herring as what they are saying is absolute nonsense as you rightly point out. The multitude of claims that renaniacs make that are pure fiction is such that it is embarrassing and worse they are so thick-headed that they fail to register that fact. They blithely spout these fictions day in day out repeated by the likes of the BBC and Guardian and the gullible and credulous accept them despite their every utterance subsequently being proven wrong or at least of dubious merit.

    They appear oblivious of the fact that there is an abundance of contrary evidence or contrary argument opposing their claims which enables you to unerringly refute them. What the sum of their claims is actually doing is lending more credence to case to leave. Because they point out that what the EU purports to do for us can be done as effectively without the EU and at significantly lesser cost (no contribution) and without the restrictions that membership imposes upon us.

  28. woodsy42
    Posted March 6, 2018 at 10:09 am | Permalink

    Here’s a revolutionary thought for you: Maybe some reduction and restraint of global component manufacture and multi-country manufacturing and assembly would be ultimately a good thing? It may be perceived as cheaper and easier for a (say) car manufacturer to zig-zag parts and part assemblies around the world before assembly but there is no actual reason why many things cannot be made and assembled in one local area. It might reduce economies of scale and labour costs but more local manufacture would reduce pollution, stress on transport infrastructure and diversify local skills and jobs.

    • Andy
      Posted March 6, 2018 at 6:02 pm | Permalink

      You are correct. Sadly there is no reason for such manufacturer to then base themselves here where costs would be higher.

      This is the endgame of Brexit. The death of manufacturing. This is what the hard-right Tory pensioners want. They are just too gutless to admit it.

      • Edward2
        Posted March 7, 2018 at 7:49 am | Permalink

        Manufacturing died after we joined the EU.

      • graham1946
        Posted March 7, 2018 at 10:48 am | Permalink

        Andy

        Have you not thought that if the EU erects tariff barriers against us, some manufacturers might want to produce here instead, as we are the biggest customers of several industries? Only exporters would be disadvantaged and they are just 8 percent of our industry. Over 90 percent of our business is inside the UK.

        • Andy
          Posted March 7, 2018 at 8:03 pm | Permalink

          The EU does not want trade barriers. But you voted for them. When it goes wrong we know you’re to blame.

          • Edward2
            Posted March 7, 2018 at 10:01 pm | Permalink

            The UK has repeatedly said it wants tariff free trading.
            We did not vote for barriers.
            Quite the opposite.

  29. BOF
    Posted March 6, 2018 at 10:17 am | Permalink

    Of course, much of the furore is about the Irish border. A confected problem if ever I saw one which is mendaciously being presented as impossible to overcome by EU,Leo Varadkar (an EU stooge if ever I saw one), and of course the CBI and many in Parliament, in opposition as well as treacherous Conservatives. Some even on front benches, I suspect.

    It is unfortunate that Teresa May has minimal business experience so there is great danger that she will allow some of these views to creep into a final deal. Ably assisted by Whitehall!

    If the Conservative Party does not wake up soon it may be too late and that bad deal will become reality.

    • Denis Cooper
      Posted March 6, 2018 at 4:28 pm | Permalink

      http://brexitcentral.com/high-time-michel-barniers-actions-matched-words-irish-border/

      “Fourth, when M. Barnier delivered his speech to the Dail, he praised the Irish efforts at finding solutions:

      “Ireland has done remarkable preparatory work. We have to use our combined strength. Together, we are working towards solutions.”

      He delivered this speech in May 2017, when Enda Kenny was still Taoiseach and working with the UK to advise and explore the sort of ideas envisaged in Option B. Leo Varadkar’s approach is the opposite. He ended this work when he came to office hoping that ruling out this option would force the UK and/or Northern Ireland into some kind of customs union or single market. Where does the Commission stand on the ending of work it praised?”

    • DaveF
      Posted March 6, 2018 at 5:01 pm | Permalink

      BOF..if, by a bad deal you mean no deal except maybe a Canada style deal..correct..but it’ll still take years to work out..in the meantime we should be pushing ahead with our preparations for trade by WTO rules with our new trading partners a la Liam Fox..there’s no time to lose

  30. Alan
    Posted March 6, 2018 at 10:26 am | Permalink

    Perhaps Mr Redwood’s memory of his experience 7 years ago that just in time supply was easy remains accurate. Or perhaps Airbus’s expectation that border controls will cause them unacceptable delays is accurate. I suspect Mr Redwood exaggerates how easy it was and Airbus exaggerates how difficult it will be, but common sense says that some controls will be more onerous than the current situation of no controls. And trying to ensure that your just in time supplies arrive on time is going to be a lot more difficult if your supplier is on the other side of the world than the other side of the English Channel.

    This is another attempt to persuade us we will be as well off after we leave the EU as we would be if we stayed in. We won’t be. We won’t have the advantages of being in the EU after we have left. Those who argued for leaving are still desperately trying to argue that it will benefit our economy. It won’t.

    • Denis Cooper
      Posted March 6, 2018 at 12:53 pm | Permalink

      You missed out the word “marginal”.

      “We won’t have the marginal advantages of being in the EU … ”

      Remoaners like you are still trying the same old line that we depend heavily on EU membership for our prosperity. We don’t.

    • Adam
      Posted March 6, 2018 at 3:58 pm | Permalink

      The UK population had 45 years membership to assess any advantage of EU. Older folk recall how good life was before joining. The collective wisdom of millions of UK voters decided what is best. Leavers do not need to argue in despair, as you indicate. Their choice won & is being implemented.

      • Andy
        Posted March 6, 2018 at 6:06 pm | Permalink

        Exactly. And we will quickly be able to assess whether or not the Leaves were right.

        As we all already know they are not it will really not take long to undo Brexit. They aren’t so desperately trying to defend their vision without any clear ability to define what they are trying to defend.

        It is both tragic and comic. They must lack real self awareness as they seem not to realise that the world is laughing at them.

  31. Billy Elliot
    Posted March 6, 2018 at 11:08 am | Permalink

    So our farmers will trade on WTO with EU? Will be difficult. And we are out of Customs Union and Single market? Even more difficult. Please dont tell me that they will trade with nation in Pacific or USA. Unrealistic. And dont tell me that British people will start to consume only domestic products. That systmet was tried in the past in country called Soviet Union. Newsflash: it didn’t work

    • Denis Cooper
      Posted March 6, 2018 at 12:47 pm | Permalink

      I suppose you are aware that the most of the trading in agricultural products is in the opposite direction? There are just a few exceptions where are our farmers export more to the EU than the other way round.

      http://johnredwoodsdiary.com/2018/03/01/the-bbc-made-a-mistake-in-its-remorseless-anti-brexit-coverage/#comment-922169

      “The UK is a net importer of pig meat, currently importing around 60 per cent of all the pork it consumes … Denmark is the dominant supplier, accounting for over a quarter of all UK pork imports. Together with Germany and the Netherlands, they account for 60 per cent of imports. The EU supplies virtually all the pork imported into the UK, due to the high import tariffs on pork from elsewhere.”

      That last bit could change, when we strike trade deals with other pork suppliers around the world whose governments won’t want to run our country.

      • Billy Elliot
        Posted March 6, 2018 at 7:56 pm | Permalink

        Yes Denis Cooper but you make a fundamental error by referring EU as just one country, There are 27 of them. As for example Germany exports agricultural products to 100 different countries. 2015 Netherlands was the biggest export destination 8.6 bn EUR where as UK was forth with 3.2 BN EUR.
        https://www.bmel.de/EN/Agriculture/Market-Trade-Export/_Texte/Zahlen-Fakten-Agrarexport.html

        UK exported 18 bn GBP 2015 and 9.37 bn GBP went to EU. That is over 50 % If there are tariffs or no customs union in future just consider what it means.

        https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/515048/food-farming-stats-release-07apr16.pdf

        • Denis Cooper
          Posted March 7, 2018 at 5:19 pm | Permalink

          You refer to the EU as one entity in your first sentence, I don’t think you made a fundamental error by doing so.

          There will not be a customs union, whatever you and the EU may think that is now settled. Whether there will be tariffs is another question but if the EU imposes tariffs on our agricultural and food exports to them it will be open to us to reciprocate on their larger volume of exports to us while making favourable trade deals with other suppliers around the world.

          As I recall Pompidou told Heath that after we had joined the EEC we would be expected to take our supplies from them, and that is what we have done but could easily cease to do if they insist on messing us about during these negotiations in the way they have been.

    • NickC
      Posted March 6, 2018 at 5:51 pm | Permalink

      Billy Elliot, The last bag of watercress I bought at the supermarket was from the USA. Most of the greengrocery I bought was split about evenly between UK and RoW produce. The only EU supplier was Spain. So you are wrong about importing from the RoW, it’s already done and the supply chains are obviously there.

      If they can do it so can we, though there is likely to be specialisation. Our exporters are a lot more adaptable, and more nimble, than you fear. When we a free of the EU our trade will not be identical, we will be less dependent on the EU, but the RoW is a lot bigger market than the EU is.

      • Billy Elliot
        Posted March 7, 2018 at 10:10 am | Permalink

        Well I am not so much interested about import. I am interested about our export which goes ca. 50% to EU.
        Why dont you got to Americas or Japan and see how much UK carrots you find in local grocery?

        Our exporters might be adaptable – that is if their get their stuff off the ground before their rotten (those horrible seasonal worles from east)

  32. Robert Betteridge
    Posted March 6, 2018 at 11:12 am | Permalink

    Starting from the viewpoint that the EU is a Protectionist Cabal, with no regard for its population, and the UK are leaving – why would it want to make any concessions that are bad for the businesses it protects, and the income from tariffs it collects? What’s in it for Brussels?
    UK fish.
    Otherwise:
    There is a brain drain to UK
    The US & the UK are a threat to exports
    They will get 10% duty on cars, or they will sell more Citroens, Renaults, BMWs & Mercs
    The US (& the UK are offering to) protect them, for free
    It can expand it’s financial sectors
    The UK is a dumping ground for its more assertive unemployed youth
    Ex-pats are a bargaining chip.

    But perhaps there are more reasons why it needs to be friends, and share things like Euratom that I just can’t see. . . apart from money?

  33. Leslie Singleton
    Posted March 6, 2018 at 11:33 am | Permalink

    Dear duncan–I don’t think your worry about the Democrats is too big a one–Cannot mention the obvious for great fear of antimoderation but Obama was of course a special case

  34. Adam
    Posted March 6, 2018 at 11:39 am | Permalink

    All products & services exist to satisfy end-user demand.

    The consumer dictates what is produced, bought & sold, from a packet of crisps to the complex array of heavy equipment their manufacturing & distribution demands.

    Consumers can, within a whim of collective taste, create or destroy an industry.

  35. ChasE
    Posted March 6, 2018 at 12:07 pm | Permalink

    By now Guy Verhofstadt will be in Downing St to meet with the PM so by this time she will become fully aware that her speech, while being soothing to some Tory ears, will have gone down like a lead baloon in the EU. She will have been told about the red lines in place and that what the government wants is still pure illusion, or as Barnier is won to say, that is not possible.. She will be told that with the red lines in place we face a prospect of having a relationship with them something like a Canada deal with maybe a plus..and nothing at all about having an equal partnership..the EU is not about having equal partnerships with anyone..all pure fantasy

    • Denis Cooper
      Posted March 6, 2018 at 12:39 pm | Permalink

      I would certainly agree with your last point but one and I wish Theresa May would stop talking about a “partnership” with the EU.

    • mancunius
      Posted March 6, 2018 at 3:55 pm | Permalink

      As you say, the EU is indeed ‘pure fantasy’ – and its cloud-capped towers and gorgeous palaces shall dissolve and leave not a wrack behind.

    • Leslie Singleton
      Posted March 6, 2018 at 4:03 pm | Permalink

      Dear Chas–I for one don’t want to be au pair with the sclerotic gross failed and failing EU. When one factors out the effect of the dreaded single market, which has obviously been excessively hyped up, who would want to be involved with anything or certainly anything much to do with the EU? We have to be fleet of foot and to rely on ourselves. Who can possibly look 10 years ahead without acknowledging that the RoW with its large and new and growing economies is going to zoom on ahead while the EU stagnates or worse? BTW Juncker prattling on about Harley-Davisons or whatever was a good laugh. I bet Trump is quaking. The EU lives breathes and dies (hopefully dies) tariffs in case he doesn’t know.

  36. stred
    Posted March 6, 2018 at 12:17 pm | Permalink

    Whether the EU accepts free trade with zero tariffs and no customs paperwork or not, it wil be necessary to have electronic checking gantries at |Channel ports. The Dutch have taken steps to employ extra staff and HMRC are saying that they will have the systems in place, though some critics say this is insufficient. But what have the French done? They will need the gantries in Dover. Would it be wise to install them on their behalf and offer to rent them? Extra parking may also be necessary. Has this been taken into account?

  37. Denis Cooper
    Posted March 6, 2018 at 1:29 pm | Permalink

    If the EEC/EC/EU/USE project was primarily an economic project then it would not be too difficult to agree reasonable practical solutions to this kind of problem.

    But of course it has always been first and foremost a political, or perhaps more accurately a geopolitical, project with the objective of establishing that “USE”, a federal United States of Europe.

    That was made clear back on May 9th 1950 with the Schuman Declaration which the EU takes as being its starting point:

    https://europa.eu/european-union/about-eu/symbols/europe-day/schuman-declaration_en

    “Europe Day held on 9 May every year celebrates peace and unity in Europe. The date marks the anniversary of the historical ‘Schuman declaration’.”

    That’s the historical Schuman declaration of May 9th 1950:

    https://europa.eu/european-union/about-eu/symbols/europe-day/schuman-declaration_en

    which adumbrated the creation of a federal European superstate:

    “… setting up of common foundations for economic development as a first step in the federation of Europe”

    ” … the realization of the first concrete foundation of a European federation”

    There’s an interesting article about the background to that declaration here:

    http://www.eureferendum.com/blogview.aspx?blogno=86053

    And because it is a political project its leaders may well be prepared to sacrifice some of the prosperity of their citizens to make a kind of political point, namely that if you dare to try to escape from our prison we will beat you up.

    Some of its British supporters think that’s fine, it’s what their idiotic compatriots deserve, and they are firmly on the side of the EU.

    It’s mildly amusing that the UK is leaving the EU through a procedure laid down in the EU treaties which some eurocrats wanted precisely to show the world that the EU was not a prison, anybody who wanted to leave was free to do so, but which the Labour government in the UK didn’t want, and which on the other hand the Irish government mentioned to Irish voters as one of the commendable features of the new Lisbon Treaty …

    • Posted March 6, 2018 at 8:14 pm | Permalink

      Thank you, Denis. Sounds horribly sinister, but even more horribly believable! The sooner we cut off the last of the shackles the better. I was going to say ”shake off” but I’m afraid it looks more and more as though we’ll have to fight to loose ourselves. Better we should tear off a couple of digits or more to regain freedom, than to remain servile and cowed.

    • rose
      Posted March 7, 2018 at 10:32 am | Permalink

      I thought the article 50 process was for when the EU threw out a member state, not for when a member state chose to leave. Choosing to leave was not envisaged, as I understand it, whereas expulsion was.

      • Denis Cooper
        Posted March 7, 2018 at 5:24 pm | Permalink

        https://uk.reuters.com/article/uk-britain-eu-article-50/federalists-tried-to-kill-eu-exit-clause-now-britain-wants-to-dodge-it-idUKKCN0ZE18Y

        “The history of the exit clause that became Article 50 of the 2009 Treaty of Lisbon is full of such ironies.

        Drafted by John Kerr, a former British ambassador to the EU who was secretary-general of a Convention on the Future of Europe, it was proposed by former French President Valery Giscard d’Estaing, who chaired the conclave that drew up a proposed Constitution for Europe.

        Giscard told the Italian newspaper Corriere della Sera this week he had wanted to remove “the fear, above all Anglo-Saxon, that the European Union was a sort of prison that you could never leave once you had entered it”.

        But it actually went back further than that …

  38. bigneil
    Posted March 6, 2018 at 1:55 pm | Permalink

    Seen on another site and completely Off Topic.
    Last week of heavy snow caused many to be trapped in their cars overnight, who were told to wrap up and keep their engines running to keep some heat going into the car. Can the govt give us an idea how many of these people would have died if they were all in “electric only” cars? Is a battery going to keep the people warm all through the night, stuck in a car ?
    Plus, when a diesel/petrol car is released from the snow it can have some fuel put in and off it goes – – an all-electric vehicle ( after running it’s battery flat trying to keep warm ) needs to be recharged. An all electric vehicle cannot be bump started.

    • Leslie Singleton
      Posted March 6, 2018 at 8:50 pm | Permalink

      Dear Neil–Yes I read it too and I am with you totally–By my own foolishness I got stuck in snow and after a very short time was shivering uncontrollably. Admittedly the cold had got to me by my being outside trying to clear the wheels but it was minus 7 deg and I had to get back in the car and put heater and fan on full blast. This kept me alive till help arrived. Even then I was scared. An electric car would rapidly have become the kiss of death. When one adds the necessity of and time to charge plus little things like how charge across pavements if no driveway and from flats, I have trouble believing that anyone could think electric cars will ever make sense in the general case–as against a short Summer’s shopping jaunt perhaps–and even then absent huge change we still have (presumably?) wires across the payment from house to car. Not to mention the extra power need from the power stations.

    • fedupsoutherner
      Posted March 6, 2018 at 9:28 pm | Permalink

      Bigneil. I said just this on another post. Still, it will mean a few less people to claim their state pensions!! Andy should be pleased.

      • Anonymous
        Posted March 7, 2018 at 8:18 pm | Permalink

        A pensioner would not be stupid enough to be out in such weather.

  39. mancunius
    Posted March 6, 2018 at 2:06 pm | Permalink

    The CBI’s propaganda worked in 1975, so I suppose it must be galling for them to realize that they’ve been seen through this time round.
    More worrying is CBI influence on the senior civil service, which relies on the CBI network to help with retiree mandarin opportunities.

  40. Derek
    Posted March 6, 2018 at 2:15 pm | Permalink

    These are the words of knowledge from a man with “Work” experience. Someone who has actually “been there and done it”. A quality so sadly lacking in everyone of our Governments over the past decades.

  41. Denis Cooper
    Posted March 6, 2018 at 3:25 pm | Permalink

    Who suggested this to Theresa May, and why?

    Just a glance at the picture is enough to say that this would not fly with an Irish government which prefers to pretend that there is no border.

    https://www.rte.ie/news/brexit/2018/0305/945119-brexit/

    “Varadkar quashes May’s suggestion of looking at US-Canada style border”

    The best solution would be a new legal solution which gave the Irish and the EU the same level of reassurance that there was no need for any checks at the border as they have now through the UK’s legislation to implement the EU Single Market, but without the whole of the Northern Irish or UK economies being subject to EU law as they are now.

  42. Miss Brandreth-Jones
    Posted March 6, 2018 at 5:26 pm | Permalink

    For me the interesting part of the blog is that at the time you didn’t realise the international complex chain or perhaps grasped the importance of it as you focused on quality and quantity.

    There are many things in our lives which we all handled well and so called experts ( even though we were already the experts ) were called in to dip their hands and noses into the takings and complicate matters ..In my case our biggest employer the NHS.

  43. Iain Gill
    Posted March 6, 2018 at 6:37 pm | Permalink

    funny when I lived in Chicago and we had deep snow and extreme cold, which thawed out, we were not left with no water supply, no doubt a few pipes burst but all sorted easily and seamlessly with no change in water supply for the rest of us

    which compares rather badly to the shambolic panic stricken approach of the UK water companies, and widespread water supply issues

    we really need to do better

  44. Derek
    Posted March 6, 2018 at 6:41 pm | Permalink

    Why, post Brexit, can NI carry on as usual and let the EU build their own Border Posts in Eire?

  45. Richard
    Posted March 6, 2018 at 7:14 pm | Permalink

    A quick google provides some guidance on the WTO’s Trade Facilitation Agreement: https://www.wto.org/english/news_e/news17_e/fac_31jan17_e.htm
    And this gets top marks for clarity:
    http://www.tfafacility.org/trade-facilitation-agreement-facility (linked to from https://www.un.org/ldcportal/wto-trade-facilitation-agreement-tfa-now-in-force/ )

    With further background: https://en.wikipedia.org/wiki/Bali_Package

    Any comments our kind host could glean on this from the DIT or DexEU would no doubt make many UK SME owners less worried about Continuity Project Fear.

  46. British Spy
    Posted March 6, 2018 at 8:31 pm | Permalink

    On Twitter.The Leader of Canada’s Conservative Party who will probably defeat Trudeau next year as he is sensible.
    Andrew Scheer‏
    Verified account
    @AndrewScheer
    3h hours ago
    More
    Arrived in London for several days of meetings to advance the interests of Canadians. If elected in 2019, a Conservative Government would pursue a free trade agreement with the United Kingdom. 🇨🇦 🇬🇧

  47. FrankW
    Posted March 6, 2018 at 8:38 pm | Permalink

    According to Barniers stairway to brexit diagram..we have so many red lines still in place that the only deal we can get from them now is a Canada style deal..so I don’t know how that is going to fit in with todays topic..complex supply chains and industrial integration..neither can I see how services including financial services are going to fit in with a Canada type deal? We seem to be worlds apart on all of this..the PM thinks that the EU are going to break their rules by allowing cake eating but I don’t think so as we will hear from them very shortly

  48. John
    Posted March 6, 2018 at 8:40 pm | Permalink

    Many bemoan that we may not get a Financial Services trade deal.

    In Nov/Dec before the Vote I remember George Osborne actually saying we are at war with the E on Financial Services as they want to destroy ours. Yes him of all people agreeing with eurosceptics before the vote.

    Whilst there is a little gripe that the EU serves Germany and France in its trade deals and ignores services which is 80% of the UK economy, I’m far from keen that we strke a Financial Services trade deal with the EU.

    Their stated aim for many years has been to take our Financial Services industry and if that’s not possible then to destroy it.

    I wonder what John Redwoods’ opinion here would be?

  49. Prigger
    Posted March 6, 2018 at 10:22 pm | Permalink

    Trump has concluded a meeting and Press call with the Swedish Prime Minster who carried the EU threats of retaliation against him. He replied in effect “Okay, we’ll slap more tariffs on, we will win, as we import more from the EU than they import from us and its impossible even now to make trade deals with them and they already have big tariffs on our goods. The Swedish PM meekly says he is mandated to go along with the EU but his is a small country and has massive exports to the USA which form a huge part of Swedish GDP. Has Juncker retired to his bunker yet?

  50. Ron Olden
    Posted March 7, 2018 at 2:21 am | Permalink

    Financial Services

    The UK had a big Trade Surplus in Financial Services with the EU and defeatist Remainers have been warbling away that there cannot be a Free Trade agreement in Financial Services because the EU has never entered into one before.

    They say it’s Single Market or nothing.

    But if the EU never moved on, every trade deal it ever entered into would be the same as the previous ones, and it would never advance the cause of Free Trade at all.

    And didn’t Barnier propose in 2014 that Financial Services be included in TTIP? At the time he was saying that there was no obstacle to such an agreement, because ‘regulatory equivalence’, did not mean the same thing as being members of a Single Market, and that any such deal would not involve either side being ‘rule takers’.

    In fact he was right, and the same thing applies to everything. If Barnier could advance the cause of such a deal with the USA, why not with us? We already have ‘regulatory equivalence’ with the EU, and have no intention of diverging.

  51. Martin
    Posted March 7, 2018 at 2:51 pm | Permalink

    Simple question Mr Redwood

    Name me one benefit I will get from Brexit?

    All I will get is extras queue at airports, having to deal with wanna be coppers at customs. Loss of mobile roaming. Applying for Visas and similar paperwork costs and hassle.

    • Edward2
      Posted March 7, 2018 at 10:05 pm | Permalink

      Being a citizen of a a free independent democratic nation.
      The greatest advantage that any person can have.

  • 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.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page