There is no cliff edge

I have heard all too many interviews by a few senior business people and their lobby group representatives telling us leaving without a deal will be “disastrous, catastrophic, falling off a cliff”. They should know better. If they wish to be credible witnesses they should cast aside wild and emotional language, and spell out exactly what they fear will happen that they think will be damaging. All too few interviewers challenge them to be precise.

I have tried to see why they hold their general view. They nearly always say the same things, that leaving without a deal will get in the way of their complex supply chains, making it more difficult to import their components. I find this difficult to believe.

They nearly all confess that their current supply chains include a minority of components that come from outside the EU. If being outside the single market and customs union so disrupted trade with the rest of the world they would not have part of their just in time dependent on non EU supplies. If they can manage 10 components from outside the EU today they could manage 100 from outside the EU tomorrow. The WTO has worked hard on facilitation of trade to remove non tariff barriers.

The EU does impose some tariffs on some components that come in from outside the EU. The UK could offer tariff free components of all kinds once we have left and we can set our own tariff schedule. I suggest big manufacturers join me in pressing for this.

They suggest that there will be delays at the ports, especially at Dover- Calais, and these will disrupt Just In Time systems. I do not accept there need be additional delays, but if there was a regular increased time to transit the ports, you would just ask your supplier to allow for the longer journey time so the supplies still reached you when you wanted them. As they fit in Chinese supplies maybe taking 40 days to arrive by sea into current complex supply chains it shows that longer journey times are not deal breakers.

The main reason I do not expect new delays on imports is that the crucial importing port will be under UK control. There is no need for us to impose new processes and delays at the ports. We can adapt or continue the current system of checks away from the ports for any purposes we need. On the Dover-Calais route if more spot checks are needed on trucks then do them on the ferry or on the nearby train carrying the load through the Tunnel. There is plenty of competition to Dover-Calais Ro-Ro from containers, so in the unlikely event of difficulties at Calais there would other choices.

They sometimes say they will need more complete complex customs paperwork. This they say is an added cost, but not of course a delay as it is done usually before the lorry departs from the exporting factory. There will be little if any additional electronic paperwork in practise. All EU trade requires them to fill in a long and complex Intrastat declaration which overlaps with customs information. Most industrial and retail purchasers these days require extensive product information, with specification, cost, test results etc. A computer programme can send the bits of this the authorities need at the UK/EU electronic borders.

I suggest to the media they will be more convincing if they stick to the facts. What exactly are they worried about, and why don’t we just fix it in the four months that remains before we leave.


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Postings to this site

Im very busy and finding there are too many postings from the same individual, and too many long postings in general. I have started deleting some just for length or long third or fourth posts that day. Please try and sum up what you say in shorter format if you want to be posted promptly otherwise I will go over to more deletions.

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The Pizza 5

So five Cabinet Ministers who voted for Brexit are staying in the government. They tell us they do not like the draft Withdrawal Agreement, and will try to get the PM to seek amendments to it.

There are three problems with this approach. The first is there is no sign the PM wants to renegotiate. Secondly, based on the PM’s determination to advance this draft, the EU has made clear it doesn’t want to renegotiate. The third is the Agreement is so bad just changing some words on the Irish backstop does not fix it. The document is seriously rigged against us and has to be scrapped. It leaves us powerless in many ways. Far from leaving the EU it keeps us chained to their rules, payments and Customs Union, with no unilateral way out. The only way the EU would be persuaded to renegotiate is if the UK government said we were leaving without signing the Withdrawal Agreement.

Ministers have to support this unacceptable Agreement all the time they stay in. They will be watched particularly closely by the media and the PM now we know they are trying to alter the policy. They would be better off resigning together. Then we would see the simple truth. You cannot want to leave the EU on 29 March 2019 and join or stay in this government. No Leave voter could possibly accept this deal as giving us what we voted for. It appears a lot of Remain voters also think it is a bad deal.

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The ERG and Mrs May

There is considerable misunderstanding in the media about the ERG. The ERG is the European Research Group. There are paying MP members who contribute jointly to research staff to help them. Non paying members like myself contribute our own research and also attend some of its meetings. As the name implies all the research is geared to understanding the impact of the EU on public policy and in the last two years to detailed consideration of leaving the EU and establishing a new relationship. Those who subscribe are running a research group that is not party political. A wider group of MPs including myself have meetings with the MPs that run the research club to discuss EU issues.

There are many MP members of this wider group. We all agree that the draft Withdrawal Agreement is unacceptable and as far as I know all will vote against it if it reaches the Commons as draft legislation. The ERG as a Group does not have a view on the future of the PM. Jacob Rees-Mogg (Chairman) has announced in public that he has submitted a letter, and Steve Baker is very active in promoting a vote. There are some other ERG members who have stated they have sent letters. There are some members who have sent letters but do not wish to make a public statement. There are members consulting their Constituency Associations about it. There are some members who do not wish to send letters for a variety of reasons.

The MP Group has only had one formal discussion of this matter when Jacob advised us of his intentions, because the future of Mrs May is not within the normal remit. Our aim as an MP Group is to concentrate on the issues around withdrawal and to set out a clear path on the ones where the Group has something important to say, as on the Irish backstop. Members of the ERG MP Group have over the last two and a half years set out a comprehensive approach to Brexit and urged the government to take it up. We have written and spoken as individuals or with other organisations on the legislation needed, on the legal and constitutional issues, on food and fishing, borders and immigration, trade and tariffs, the economy and taxation, transport security.

The campaign to have a confidence vote is now effectively led by Jacob Rees Mogg and Steve Baker. As Steve has stated on tv he thinks 48 letters should now have gone in. Clearly more letters have gone in than the number of public declarations. I do not believe Sir Graham Brady will fail in his duty. When he has received and opened 48 such letters he has to tell the PM immediately, and organise a vote promptly.

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A letter to younger citizens

Last night I was asked on Any Questions why I supported Brexit which the young questioner thought would have an adverse effect on her generation in particular. Here is a longer version of my answer.

Dear fellow voter,

I support Brexit above all for the younger generation, because it will give to you something I was denied. It will give you the most precious political inheritance of all. It will give you a powerful UK democracy where the British people can make their own choices. Our Parliament will be able to do whatever the people wish, whatever we choose in the ballot box.

The freer the country the more prosperous it usually is. The USA is a mighty economy based on the architecture of freedom, and on the great principles of its Constitution. Switzerland is richer than EU countries, with a fine tradition of Parliament and referenda. Norway’s democracy has been preserved by staying outside the EU, and she too is a very rich country.

It is because I have confidence in the generations to come that I want to pass to them a democracy that works, where they will be in charge as they reach the age of holding powerful jobs. It is the EU’s austerity policies and thought throttling centralisation that has spawned such high youth unemployment in many EU countries. I do not want you to have to battle to restore our democratic freedoms, and to resist their further erosion to the EU, as I have had to do.

Yours sincerely

John Redwood

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72% of Conservative members oppose the draft Withdrawal Agreement

I was surprised as many as 23% of Conservative members support the draft Withdrawal Agreement. Maybe they heard the Prime Minister say on tv that we are taking back control of our laws, our money and our borders and ending freedom of movement. We all agree with that. That is exactly what the EU Withdrawal Act achieves. Unfortunately it is not what this Agreement says.
The PM must understand that the draft Withdrawal Agreement does the opposite. It means we pay the EU a fortune, stay in everything for at least 21 months and will have to stay in the Customs Union thereafter unless the EU is suddenly very nice to us. As more members read the document or read about it and understand it is not Brexit, I suspect they too will be disappointed.

(Conservative Home survey)

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The economic benefits of leaving with no Withdrawal Agreement

The Eu’s refusal to discuss the future partnership and trade arrangements before we leave means we now have a simple choice. Sign an expensive and damaging deal and try another 21 months or more of talks, or leave and trade under WTO rules on terms we set out. Its obvious we must just leave. Doing so produces many economic advantages

1 An immediate substantial improvement in our balance of payments as we cease sending money to the EU
2 An end to all the uncertainties about our trade relationship with the EU, which will become much like our trade relationship with the USA and China.
3 The ability to increase spending on public service, providing a welcome boost to schools, social care, defence and others, out of the savings.
4 Tax cuts to raise take home pay and boost the economy
5 If we spent an extra £39 bn on ourselves instead of paying to stay in the EU for longer over the couple of years, that would be a 2% boost to GDP
6 Remove VAT from green products and domestic heating fuels, which we are not allowed to do in the EU
7 Announce zero tariffs on all components coming in to the UK for industrial assembly, making components from non EU sources cheaper and boosting manufacturers
8 Announce cuts in tariffs on food from non EU places, which are currently very high. The new lower tariffs will also of course apply to EU product. Set them to boost domestic agricultural output of things we can grow well.
9 Take control of our fish and rebuild our fishing industry.
10 Limit unskilled and low paid work permits and go for a higher wage more productive economy. Have a migration policy that is fair to all parts of the world and based on our economic needs.

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The detail is worse in the Agreement

So as we feared the ECJ has a big role, we cannot unilaterally leave the customs union and may have to stay in for a long time if there is no mutually agreed exit deal. All the government has achieved is the elimination of the Article 50 right to leave we currently enjoy.

Our negotiating power would be dramatically reduced by giving away the money in advance of a deal, and binding ourselves into the customs partnership and law codes of the EU. Remain voters will say being in the EU is better than this, and Leave voters say this is not Brexit. As yesterday in the Commons made clear there is nowhere near a majority for this one sided and damaging Withdrawal Agreement

The Irish backstop treats one part of the UK differently from the rest and is already being used by the SNP against the Union. The huge payments buy us nothing we want and mainly relate to staying in for longer than we wish. Why would the EU bother to agree a good future partnership when they will control us and take our cash without such a deal?

The resignation of 7 more following the 8 who resigned after Chequers must be a record number for a single policy. It makes the defeat of these proposals even more likely as they will all presumably vote against.

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The loss of two Brexit Secretaries is more than carelessness

The government has centralised the Brexit negotiations through the PM and Cabinet Office. Senior officials have negotiated under the PM’s authority bypassing the Brexit department and sidelining the good negotiating and political advice of two Brexit Secretaries. Cabinet members were not sufficiently involved or informed in crucial issues affecting the whole government and their departments.No wonder there have been so many resignations. Proper process has been ignored with bad results.

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This is no deal – this is just a very bad Withdrawal Agreement to make us pay and bind us in

So the Cabinet took much longer to discuss the deal than the PM wanted. The news conference was cancelled and the statement at 5pm happened more than two hours late. The awaiting EU Ambassadors in Brussels lined up to welcome the Cabinet decision were stood down. Maybe ten Cabinet members expressed grave misgivings about the deal and whether it could to sold to Parliament and the public. The Prime Minister had to say it was the collective view of Cabinet to press on, unable to say it was the unanimous or united view.

The Parliamentary arithmetic is clear. The Withdrawal Agreement could only pass into law if Labour wish that to happen. If they oppose as they say they will, there will the DUP, and around 100 Conservative MPs unlikely to vote for it. Of the Conservatives 51 are Eurosceptics who have made public promises to oppose against a 3 line whip, and around 12 Remain Conservatives also likely to be against. Labour has said it does not see it as a good deal worthy of support.

The legal position is also clear. A motion of the House could not strike down legislation. Parliament has already legislated to leave on 29 March 2019. It would require new legislation to amend and repeal the EU Withdrawal Notification Act and the EU Withdrawal Act to stop us leaving next March.

There are four main arguments against the Withdrawal Agreement. It is far too dear, buying us nothing for the money. It binds us back into the customs union and single market we promised to leave, with no guarantee we can get out again. It damages the Union by treating Northern Ireland differently, leading to demands for Scotland also to have different treatment. It stops us negotiating new trade treaties with the rest of the world. I will comment in more detail on the text in due course when we have completed analysis of it, but the main outlines of the so called deal are clear. This is not a deal – it is a Withdrawal Agreement which keeps us in and costs us a fortune.

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

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