Author: johnredwood

How much more damage will we allow the EU and its so called single market do to British business and our jobs and incomes?

There are several important facts about the EU’s single market that Remain do not recognise.

 

1. Since it was completed in 1992 the UK’s trade in goods has not grown with the rest of the EU.
2. Between 1951 and 1972 when the UK first joined the EU manufacturing output rose 4.4% a year. Since we joined the EEC/ EU there has been no growth in UK manufacturing.
3. The trade of non EU countries with no special trade deals with the EU like India, China and the USA has grown more quickly with the EU than our trade from inside it.
4. The government’s own foresight report said that “Output and productivity growth (of UK manufacturing) was reasonable 1951-73” and worse after we joined the EU.
5. The main advantage of the single market, that there are common rules and specifications for all 27 other EU countries making it easier to sell into the market, applies whether the exporter to the EU is in or out of the EU itself.
6. The EU never completed its single market in services. The danger is that as it does so its rules and regulations will damage the UK rather than assist us. The City is often in dispute with the EU over its proposed rules.
7. The single market has been used to add on all sorts of other laws, taxes and obligations which the UK does not want and have little to do with trade.
8. The Germans and others see the Euro as an integral part of the single market and are not happy about the UK being permanently out of it.
9. You can trade quite happily with the single market without being in it as a member.
10. The EU’s trade agreements with a range of smaller countries will automatically apply to both the UK and the rest of the EU as the original parties, if we leave.
11. Much of world trade is not under any special trade arrangements.

 

 

 

 

Remain and the Treasury like to attribute all market moves to hopes and fears of Brexit. They  should be thrilled to be proved wrong on government interest rates. They  said they would go up if Brexit seemed likely.  Instead, as  pro Brexit  polls have improved since the turn of the year UK government borrowing rates have plunged. The 10 year rate is down from 2 % to 1.2%, a fall of 40 %. Bond prices have surged.

 

Trying to talk us into higher rates has not worked.

When we remove the hated tampon tax and VAT on fuel, we boost family incomes and help tackle fuel poverty. In the EU we are not allowed to do that, as they control some of our taxes.

 

We need to take back control over taxation. The European Court has made us pay back huge sums of company tax we have collected from large companies, as they can override Parliament’s wishes on how much tax companies should pay. Out of the EU we will avoid this unhelpful interference. Last Parliament we had to pay back £7,000 million, and the Treasury forecasts the same again this Parliament – or more. We need that money for the NHS.

 

Our trade is not at risk. They sell us more than we sell them. Germany has no wish to see higher tariffs and barriers against her cars, nor France against her food and wine. As they do not want to stop their trade with us, they understand they cannot impose new tariffs against our sales to them.

 

We are constantly asked what model of trade arrangements will we have on leaving. Our campaign has never wanted the Norwegian or any other foreign option. We will have the British model. It will be very similar to current arrangements, as Germany and the other leading exporters to the UK have no wish to damage their trade.

 

We are told we will lose the main advantage of the single market, that it offers common standards and specification making it easier to supply. On the contrary, that remains true whether we are in or out. The USA and other exporters to the EU benefit from the common standards without being members and without having to pay the fees for belonging.

 

We are told we will lose global influence if we leave. On the contrary, we will gain. The UK will retake her seat at the top tables of the world where the EU has replaced us. Instead of having to compromise and agree out positon on trade matters or climate change issues with 27 other EU countries, the UK will be a full member of the global body with our own vote and voice.

 

It is not unusual for the main global bodies and the Uk Treasury to all agree the same or similar forecasts – they rely on common data and common assumptions, and often copy from one of the other’s models. Nor is it unusual for their group think to be wrong. They failed to predict the recession and huge damage done to the UK economy by the European Exchange Rate Mechanism, they failed to see the Great Crash of 2008 coming, and they recommended the Euro. With a forecasting record like that I see why many people do not now believe their long term forecasts for the UK out of the EU.

 

Out of the EU we can take back control of our borders. With controlled immigration we can cut the downwards pressure on UK wages and ease some of the pressures pushing up house prices. We need to relieve the pressures on our public services brought on by uncontrolled immigration.

 

Out of the EU the government will no longer have to dissemble over Turkish visas and Turkish membership of the EU

 

 

The closest any of my Remain opponents in debate have come to saying anything nice or positive about the EU is their occasional claim that the EU is about peace in Europe.

I agree with that aim, but fail to see how the EU has created or helped it. Peace came about following a bruising world war, when a newly democratic Germany and democratic France emerged from the violence and decided to co-operate with each other, under the security umbrella provided by a US led NATO. The leading western democracies have no wish to invade each other again or to annex the smaller countries, whether the UK is in the EU or out of it.

My fear is that as the EU seeks to develop its military arm and to assert itself in foreign policy, it will become a force for instability as we have seen in the Balkans and the Ukraine. I do not wish the UK to be dragged into far away conflicts by an EU that has more ambition than strength or commonsense to follow it through. There is no need for a rival to NATO.

For the rest of it, the Remain case is an increasingly absurd barrage of extremely pessimistic forecasts. Most of them are based on the idea that we are in a Union with a group of  very unpleasant states who will wish to damage us so much that they will happily bring their own economies down in the process should we dare to leave.

Listening to the German Finance Minister in the bits of his recent intervention that did not get reported much he made clear that if the UK despite his warnings and advice does leave he will want to sit down and sort out how to continue Germany’s very profitable trade with us. The  day after we vote to leave the rest of the EU’s rhetoric will change from mild threats and insincere protestations of love for us if we stay, to a strong wish to save as much as possible of the strong links and collaboration there is across the Channel.

Remain have fallen in the polls the more they have relied on bullying to get people to vote for them. They have fallen in the polls as their tv spokespeople have turned to personal abuse and false allegations, instead of helping Leave inform the public of how the EU works and what the future might be like under either scenario.

I have not spent my time painting lurid portraits of what Remain might be like if we had a more serious re-run of the 2011 Euro crisis or if the European banks get into worse trouble,  for two reasons. One, I do not want it to happen as it would  be damaging to so many people. Two, I think it more likely the Euro area will muddle through with slow growth and a gradual move to the richer countries sending more money to the poorer countries and accepting more debt write offs as they need to do.

Nor have I spent my time in full flow thinking through some of the worst scenarios we could get into as the EU tries to flex its limited military muscle. Again I do not wish to see that happen, and it is not the base case.

Meanwhile, all Remain does is invent ever more absurd ideas with huge figures plucked out of thin air. What a pity they have no positive vision of life in the EU for the UK. They spend most of their time denying how much it already does. They refuse to discuss the next moves to a Euro Treasury and political Union. They only seem proud of the fact that we  are  neither in the Euro nor in Schengen, two of the central pillars of the modern EU. Often these are the same people who used to tell us we did have to join the Euro.

If even Remain does not want to join in major parts of the EU, why hang around arguing with the other members who want to get on with their fuller Union?

Mr Cameron’s extraordinary claim that the triple lock to ensure an increase in state pensions each year might not be safe on Brexit is wrong for two obvious reasons.

Firstly, Conservative MPs promised it in the last election and have voted it through. Most of us will not be voting to remove it, nor will the opposition parties.

Secondly, we will be a little bit better off out, when we can spend the net contributions from the EU which we do not get back on our own priorities. This will give our economy a 0.6% boost, not a decline.

We were always promised that the taxes we pay are a matter for UK voters and their elected Parliament at Westminster, not for the EU to impose.  When governments were signing away our power to govern ourselves they knew they had to reassure us that they would not let Brussels tax us.

 

They lied to us.

 

Today the overwhelming majority  of MPs want to abolish the tampon tax. We do not see this as some luxury product that deserves a 20% VAT charge, but as a necessity that should not be taxed at all. Brussels tells us we cannot do that.

 

Most MPs do not want to tax green products. We think people should be able to cut their fuel bills by buying draft excluder, insulation materials and better boiler and temperature controls free of VAT. Under Brussels rules the UK Parliament put a 5% VAT on, as we were told there had to be some  tax on  these helpful products. Last summer the EU took the UK government to the European Court. That Court, sovereign in the UK, has instructed the UK government to raise the VAT rate on these products to the full 20% standard rate.  The government and official opposition have of course delayed doing this until after the referendum.

 

So what does Mr Cameron tell us about our inability to choose our own taxes? He told us that in his “new deal” the EU would legislate to change its VAT laws, so we could abolish the tampon tax. He implied it might also  help with the green products.  After the deal the EU duly came out with proposals to change VAT, so I read them full of hope of a better tax future. I discovered that once again the EU had no intention of helping the UK.

 

Their consultation document on the changes they wish to make to VAT over the next couple of years contains no mention whatsoever of the UK renegotiation. It does not say the UK now has some “special status” as Mr Cameron says allowing us to change our tax rates. Instead the firm legislative proposals in their document are to centralise VAT more and to make cross border collection stronger.

At the end of the document they ask if there should be more flexibility for member states on VAT rates. They conclude that this could damage the single market, and would require the unanimous consent of all member states and the European Parliament. A document with firm proposals to centralise VAT more with promised EU legislation to do so has no firm promise of legislation to give us the flexibility we need.

 

The perverse and undemocratic nature of EU tax policies is underlined by their approach to company taxation. In the UK many people and all political parties think large companies should pay the full corporation tax the UK Parliament wishes to levy. We need the money for public services , and have cut the rate to one of the lowest in the advanced world to make it more likely companies will invest and work here and so pay our taxes. The EU spends much of its time considering legal cases from companies trying to get tax back from the UK, or trying to avoid future tax payments. According to the Treasury the UK lost more than £7000 million from company tax cases in the last Parliament, much of it thanks to the European Court and its decisions. The Treasury forecasts we could lose more over the next five years, as there are plenty of cases in the pipeline.

 

If the Treasury loses a case in UK courts under UK law, Parliament can quickly fix the law to restore the intended positon. Parliament can always legislate to make the tax levied legal.  If the Treasury loses a case in the European Court, as it has been doing, Parliament has to fix the law in favour of the companies  bringing the case. We have to legislate to tax them less.

 

The UK Parliament grew up to stop the King taxing people unfairly, and to make the King deal with people’s needs and grievances before collecting the tax. Today the EU has taken the place of the King, the sovereign. Parliament needs to have the power to stop the EU imposing on people taxes we do not agree with, and needs to have the power to collect taxes from big business we do agree with.

 

No wonder so many large corporations think we should stay in the EU. The EU is cutting the amount of tax they have to pay, at the cost of the rest of us who then have to put up with VAT on fuel, on green products and on tampons.  We need to leave the EU so we can set the taxes we think are fair. We could also afford to abolish VAT on  fuel out of saved EU contributions. That welcome change to families is illegal if we stay in the EU.

 

(This has appeared on the Telegraph site)

 

A small country can be sovereign but not very powerful. A large country can be more powerful but not sovereign, if it is foolish enough to give away its right to self government.

Remain seek to confuse sovereignty with power. The UK they say is more powerful because we “pool” our sovereignty with other countries. What nonsense.

You cannot “pool” sovereignty. You are either sovereign or you are not.

I am sovereign over my bank account. I can spend the money in it as I please.

If I add up my neighbours’ bank accounts they have much more money than I do, so collectively they have more spending power. That does not make me want to share my bank account with them, even though together we would have more money to spend, or more power of the purse.

Why don’t people share bank accounts with their neighbours? Because they do not want to have to agree every purchase and every loan with all the others in the shared scheme. They fear they would end up not being able to spend their own money on their priorities. They fear they might have to carry a disproportionate burden of paying back any overdraft. People are wise not to “pool” their bank accounts.

So why do Remainians think it can work for countries?  We now share a lot of our money in a common budget with the rest of the EU. We do not get back anything like what we put in. The handling and admin costs are high as well.

It’s not just the money where this is obvious. Because the UK is in the EU it agrees to “pool” its sovereignty over trade. That means we have given away our unique vote and voice in the World Trade Organisation. We now have to argue with 27 other countries over what the EU representative will say on our joint behalf. Frequently they do not say or vote as we would wish.

All the time the UK stays in the EU we are not sovereign. The European Court overturns Acts of Parliament and controls taxes we have imposed or wish not to impose. The European institutions take over more and more areas for their own decision. We cannot decide how to raise all our tax money, nor decide how to spend it. We cannot make our own laws.

So a once powerful independent country is no longer sovereign.

Earlier this week I was asked by a Japanese tv channel why on earth we were wanting to leave the EU. I told them that I  noticed Japan did not enter a similar arrangement with China, and have to agree her laws, and parts of her budgets and taxes with China before making decisions. As they do not do this, why do they think we want to have to agree our laws and taxes with France and Germany?