Leaving the single market will not damage us as some suggest

Over the next few days I will share with you the text of my lecture in Speaker’s House on Tuesday evening. Today I start off by disagreeing with  the assumption that we have been winners from the single market and we will lose from leaving it.

Let me question the thoughtless assumption of some who think this should be an argument about trade and not about these wider truths

Let me challenge their view that our membership of the single market and customs union has boosted our economy

They wish us all to discuss in worried tones what we might lose from leaving

If you look out the economic growth figures for the UK you will discover that the UK economy grew faster from 1945 to 1972 when we joined the EEC than in the long years since we joined

You will discover that the growth rate did not accelerate again in 1992 when the EU claimed it had completed its single market

The immediate sequel to joining the EEC and to completing the single market was the UK plunged into recession on both occasions

In 1974 it was the oil and banking crisis that affected much of the west. Not the EEC’s fault, but the EEC offered us no respite from it.

In 1993 it was a recession created by European policy

Our period shadowing the DM and then as a member of the Exchange Rate Mechanism gave us a nasty boom and bust

Our early experience of the completed single market was a 5% loss of national output and income.

We were told then that creating currency stability was a crucial part of a single market.

The only problem was the policy to achieve it did the opposite.

The EU itself has sought to study the impact of the single market

They concluded that the UK got the least benefit of all the states out of the process

They said we experienced a single gain of just 1% over the whole time we have been in the single market.

It is difficult to find even as much as that that in the figures.

Instead the UK’s entry into the EEC’s so called common market of the 1970s speeded painful losses of industrial business in the UK

The lop sided freeing of trade, removing barriers where France and Germany were strong but not doing the same where we were strong

hastened large closures and output losses in steel, cars and other basic industry.

In 1972 the UK made 1.92 million cars. Ten years later in the EEC that had fallen to a low of just 888,000.

We lost Austin and Morris, Wolseley and Riley, Vanden Plas and Hillman, Sunbeam and Triumph, Jensen and Rover

It is true there were home made problems with the way the industry was managed, but no-one can say we got a boost from EEC membership.

In 1972 the UK steel industry had 323,000 employees and the UK was the world’s fifth largest producer

Today we have 35,000 and are in twenty first place

The large coal industry that produced 147 m tonnes in 1970 has seen all the deep mines closed

with just a small residual of surface mining left

The German steel and coal industries flourished and the German car industry exported large volumes to the UK replacing our output

EU regulations have played a part in the demise of parts of our energy industries

EU energy policy is turning the UK into a net importer despite being a country rich with energy resources

In chemicals and textiles too the UK lost out to continental competition

Under Labour and Conservative governments there was a remorseless decline of important parts of our industry throughout the period of our membership.

It is difficult to see why people think there will be any additional a loss of output when we leave the single market when there was no gain from joining it

The argument seems to be based on the dubious idea that our exports to the continent will suffer because we will find the EU impedes our access to their market

This assumption too needs examination

Given the way the rest of the EU exports to us much more than we export to them imposing barriers could be a more costly choice for them

I assume the UK will retaliate should the rest of the EU impose tariff and non tariff barriers, and would match any such restrictions

Tariffs will be strictly limited under WTO rules which bind both us and the EU

We should not exaggerate the impact moving to World Trade terms would have.

Many countries have increased their exports to the EU at a faster rate from outside the customs union than we have from inside

Non tariff barriers too have to conform with the Facilitation of Trade Agreement which the WTO brought into effect last year.

It is just  possible the rest of the EU will want to punish us and punish themselves more by imposing what barriers they can

The UK economy would have several ways of adjusting

It could import cheaper goods from the rest of the world, removing tariffs on imports in return for free trade agreements with other countries

The UK could reimburse consumers and companies that had to pay the additional tariff by giving them offsetting tax cuts out of the substantial tariff revenue the UK state would collect

The UK Treasury would collect about £16bn in tariff revenue on EU exports to us, giving plenty of scope to compensate. Meanwhile the rest of the EU would collect just £6bn on our exports to them. All of that money of course would go to the EU, not to member states governments.

UK business could divert some production from export to the EU to the domestic market

Our farms could greatly expand production behind the substantial tariff wall that is allowed under WTO rules for food

so that we all enjoy more home produced food as we used before entry into the EEC.

The one non farm tariff that does cause some to worry is the 10% tariff on cars

Here you would expect the combined impact of the stronger Euro and a 10% tariff to cause more UK car buyers to switch to domestic suppliers

Helping offset any impact on export volumes to the continent.

The UK does run too high a balance of payments deficit.

It has been persistent for many years of our membership of the EU

It is heavily influenced both by the substantial budget contributions we have to make

and by the large deficit in goods we run with the EU

On exit we will be able to cut the deficit by no longer making payments

We will be able to rebuild our agricultural industry


  1. Sir Joe Soap
    February 22, 2018

    Indeed, leaving the clutch of the EU is the first and most important step in rebuilding our industrial economy. It is necessary but not sufficient.
    We de-industrialised too radically in the 80s and 90s, and not just because we were in the EU.
    Poor training, no real apprenticeships, high exchange rate, over dependence on oil and banking/financial services, high business rates, high fuel costs, high corporation tax rates, silly environmental and employment rules, laissez-faire attitude to buying us up and closing us down.
    Now, we need to re-industrialise, and let’s be honest, most of these things still need reversing. Not just leaving the EU. Have we got the PM and government to tackle these?

    1. am
      February 22, 2018


    2. Lifelogic
      February 22, 2018

      You ask:- Have we got the PM and government to tackle these?

      Certainly not. May and Hammond just love home grown economic vandalism – on expensive green crap energy prices, building on EU employment “protections”, an absurdly high, increasingly high and complex tax system, an idiotic apprenticeship scheme/tax, the workplace pensions idiocy, they want to stick to the dreadful European economic policy, gender pay gap drivel, they think government should determine wage levels at the bottom end (thus preventing many people from ever working or learning to work).

      Loads of other economic lunacies heaped on top, planning restrictions, plus the idiotic litigation culture (and endless government waste almost everywhere you look).

      May clearly cannot stand at the next election, Hammond needs to be fired for gross incompetence (he is as bad a Osborne was). The question is when and replaced by whom and can if be done without an election?

      1. Lifelogic
        February 22, 2018

        The FSB survey recently suggested that small businesses spend three working weeks each year on complying with their tax obligations and about £5000. This compliance is another tax on top of the actual tax paid.

        My compliance and tax planning cost are hugely more than this. Certainly far more than the total tax I pay PA. This as I feel I have a moral duty to avoid giving this dreadful socialist government any more money to waste than I am legally I am obliged to do.

        It is surely everyone’s moral duty to do this unless you really thing government can spend it better than you can spend or invest it. Surely everyone can use money better than this government does?

        1. Lifelogic
          February 22, 2018

          After all who could not spend/invest their money better than HS2, forcing employers to report gender pay figures, Hinkley C, energy performance certificates, endless pointless legal enquiries into historical government incompetences, or subsidies for daft expensive & intermittent green crap energy lunacies? Or paying healthy people to encourage them not to get a job or even learn how to do one.

          1. Lifelogic
            February 22, 2018

            Or spending tax payers money on a £50,000 loan to someone to get some worthless degree in say gender politics at the ex-poly of Bognor Regis (or PPE at Oxford).

    3. Hope
      February 22, 2018

      JR, I am not sure when you are going to attack May for selling out the electorate and democracy to remain in the EU by another name. All these imaginary problems created to make it sound too difficult to leave. She was und Ryan’s in D camber when she deliberately capitulated to the EU in phase one. She agree regualtatoey alignment whether there is a deal or not, staying in the single market by another name, subjudicating the U.K. to ECJ for an unlimited period, giving away £100 billion, yes a £100 billion, according to Davis’ reply to Priti Patel in Parliament, of U.K. Taxpayers money to talk about trade! When will you act to stop her selling out our country and democracy to remain in the EU by another name? There is no need of an extension, first disguised as transition now currently an unlimited implementation period! If there is no change it cannot be a transition or implementation because NOTHING changes.

      She has allowed and supported project fear with use of false Treasury reports, BoE and other bodies to get us to accept her email stance. No rebukes or even corrections from her or Davis. This speaks volumes. Get rid of her.

      May has to be ousted. She is not acting on collective responsibility but some presidential authority in her own mind.

      1. Chris
        February 22, 2018

        I agree, Hope. I see that Jacob Rees-Mogg is not mincing words in his response to the leaked report about an indefinite transition period. He covers a lot of other key points, including right to make our own laws, control of immigration. He seems to make it clear that he suspects Remainers behind the report, and seems to warn the PM to stick to what she promised, and of course what we voted for:
        ‘Pervasion of DEMOCRACY’ Jacob Rees-Mogg SLAMS secret Whitehall Brexit ‘Remainer’ dossier
        JACOB Rees-Mogg has launched a blistering attack on the Government over a leaked Whitehall dossier that failed to offer assurances the UK would ever leave a Brexit transition period….”

        1. Chris
          February 22, 2018

          Just to make clear the D Express actually wrote “pervasion” of democracy (new one on me). It should of course have written “perversion” of democracy.

        2. getahead
          February 22, 2018

          “He seems to make it clear.”
          Not sure that works.

      2. Peter
        February 22, 2018

        The letter signed by 62 MPs was welcome, even if it was either poorly reported or dismissed in the media. May has form for occasionally saying what suits, then staying silent and subsequently failing to act or – worse -doing the wrong thing.

        I don’t know how it will all play out. Her defenestration does not seem imminent though.

        1. Hope
          February 22, 2018

          She is talking about unconditionally supporting EU security. Unconditionally! Why would she unconditionally support EU foreign policy? Security, military and intelligence all intrinsically linked. No money, support, resources at all, no military support unless it is in our national interest or foreign policy. She is happy to give away when her EU opposition is talking about punishing our country and EU leaders implying they want to take jobs from our country. When will she receive a backbone or an ounce of patriotic pride to all Ct in our country’s interest and public vote? She is an utter national embarrassment. May’s capitulation should be enough for any MP wishing to leave the EU as mandated by the electorate in the biggest public vote for generations.

          Rudd wants more Syrian refugees, May wants more from Calais and gives France more of our money and to day we learn net immigration up again! Seven years and record numbers still appear under May who claims she will reduce to tens of thousands, even though Osborne has pointed out no one was serious in private to achieving the false pledge!

      3. Bob
        February 22, 2018
      4. Mitchel
        February 22, 2018

        “Trust is good but control is better”

        wrote Lenin.It would have been better if,rather than loftily quoting Shakespeare and Churchill at each other,the Brexiteers had read,if only selectively,the work of Vladimir Illyich (even if Winnie would have disapproved).

        1. Prigger
          February 22, 2018

          I’ve read much of Lenin. Even the books he wrote after his death justifying ongoing policy. He was like some US Democratic Party voters in life after death activities.

          1. Mitchel
            February 22, 2018

            Just wait till that Jurassic Park technology is introduced to the mausoleum in Red Square.

      5. Lifelogic
        February 22, 2018

        May has indeed to be ousted soon. She is a huge electoral liability, her economic policies and her Chancellor are dire and they will not work. She clearly cannot be trusted on the EU, dithers and she is tedious, wooden & robotic. She makes even the appalling John Major look relatively competent.

        Unemployment going slightly up I see in the figures. Hardly surprising with the over tax and regulate to death approach that is Philip Hammond.

        1. Iain Gill
          February 22, 2018

          Employment figures for people born in the UK would be interesting…

    4. Turboterrier.
      February 22, 2018

      Have we got the PM and government to tackle these?


      1. Lifelogic
        February 22, 2018

        Certainly not and the only real alternative is far worse still.

    5. Rien Huizer
      February 22, 2018

      Who will finance that?

      1. NickC
        February 22, 2018

        Rien, It’s willpower we need more. Financing will follow it.

    6. Peter D Gardner
      February 23, 2018

      Dear Joe Soap,
      Your final question is silly. you know we do not. We certainly have the right people but they are not in the required positions to achieve anything. With but a few exceptions we have a government consisting of people for whom the concept of an independent sovereign nation state is either anathema or alien.
      The underlying theme of David Cameron’s pro EU campaign was that UK is no longer capable of self-government. Observing Mrs May’s government attempting to work out its policies for Brexit, or even just negotiating what it does understand, one is inclined to agree with him.

  2. Ian Dennis
    February 22, 2018

    The UK buys 2.54 million cars.
    The UK car industry manufactures 1.7 million cars.
    In a world where we had to home produce cars the car industry would have to expand by 50% to meet demand.
    With 10% tariffs there will be as JR says a drift to buying UK made cars.
    It won’t happen overnight just as the loss of car making in the past did not happen overnight but the trend is fairly predictable.
    Japanese car makers operating in the UK, will want to meet this demand. They will not – despite their lobbying to government – close UK facilities and move to the EU.
    If they did their exports to the UK would have tariffs and be competing with non tariffs vehicles built in the UK and with free trade partners overseas.

    1. Bob
      February 22, 2018

      @Ian Dennis

      ” They will not – despite their lobbying to government – close UK facilities and move to the EU.”

      I don’t think that EU27 manufacturers facing tariffs from one of their major customers would be very keen on Japanese competitors moving onto their turf, but it would possibly give JLR a bit of a boost.

      1. acorn
        February 22, 2018

        Renault could decide to move UK Nissan production to the EU. Peugeot Citroen Group, could decide to move Vauxhall production to the EU. Both moves would avoid component tariff costs post Brexit.

        1. NickC
          February 22, 2018

          Acorn, But attract car tariff costs, post Brexit.

          1. acorn
            February 22, 2018

            Think exports of such vehicles from the EU.

          2. NickC
            February 22, 2018

            Acorn, That’s what I was thinking. A car built in the EU, exported from the EU to the UK, would attract an import tariff of 10% levied by the UK government, if we matched the EU’s car import tariffs. So it would be of benefit to EU owned car makers to stay in the UK, in order to sell in the UK.

        2. libertarian
          February 22, 2018

          No they couldn’t. The Renault , Nissan Mitsubishi alliance is not a formal ownership structure its just a cross company collaboration. Nissan has just invested ( dec 2017) in a significant new production line for the Leaf in Sunderland, so they won’t be going anywhere for a while.

          PSA could move production to Europe but seeing as the largest part of their Vauxhall market at 288,000 units is the UK that would be pretty dim.

          1. acorn
            February 22, 2018

            Renault owns 43.4% of Nissan. Nissan has a cross holding of 15% in Renault. The French government owns 15% of Renault.

            British Vauxhall plants, where production costs are about twice as high as the French automaker’s domestic sites, face hurdles in either a hard or soft Brexit scenario, PSA CEO Carlos Tavares said in an interview in Berlin.

            “If the UK reaches a trade deal with the European Union, the plants will need to be competitive with facilities in continental Europe. Without a trade agreement, they will need to vie with factories overseas”

          2. NickC
            February 22, 2018

            And Mitsubishi cars is 34% owned by Nissan. But Mitsubishi trucks/buses is majority owned by Daimler.

            It’s unlikely that an existing car plant would be moved from the UK to the rEU. What would happen, if the parent corporation decided to switch bases, is that the next model would be built in a new factory somewhere else – usually to the government that bids the most.

            Productivity is notoriously difficult to measure. However the Nissan Sunderland plant is the most efficient in Europe, whilst British workers are at or near the top generally.

          3. libertarian
            February 23, 2018


            Yes so Renault, dont call the shots

            PSA cut jobs on the Astra line because they are not competitive, and they aren’t competitive because they source more components from overseas ( 75% ) and less from the UK than any other manufacturer !

            Heres another quote “Tavares repeated his desire not to close UK plants” (22/1/18)

    2. Denis Cooper
      February 22, 2018

      About 85% of the UK domestic market for cars is taken up by imports:


      “It’s easy to say, for example, that 8 out of 10 cars made in the UK are exported, without bothering to say where they go – mostly not to the rest of the EU – and gloss over the fact that imports of cars from the rest of the EU are much greater than our exports to them – by about threefold in value, on the last figures I saw – and forget how much of our home market is taken up by imports which could eventually be substituted by domestic production – 1.72 million cars made in the UK in 2016, of which 1.35 million were exported, according to the numbers given here:


      so wouldn’t that be about 0.4 million new cars both made and sold at home, out of a total of 2.7 million new cars sold in the UK according to this:


      Meaning that 85% of the UK car market is taken up by imports?”

      Of course the government and civil service has been well aware of this but in the past they have chosen to deliberately distort and misrepresent the facts to support their case for continued EU membership, and even though officially the policy on EU membership has now been reversed they have still not got around to reversing their propaganda.

      I presume this is one reason why the Department for Exiting the European Union rarely attempts to counter the constant flood of anti-Brexit propaganda, and why the Treasury cannot help coming out with such grossly exaggerated doomladen forecasts of the economic consequences of Brexit; the whole ingrained mindset of the civil servants is deeply pro-EU and so inevitably it is a great struggle for them to look at it fairly let alone from the opposite standpoint.

      1. NickC
        February 22, 2018

        Denis, That’s interesting. And just doing a fag packet estimation of the revenue the UK government would collect at 10% assuming an average import price of £14,000: ((2.7-0.4 million) x £14,000 x 0.1) = £3.22bn, just from cars.

        That’s on top of our net EU payments of £10bn to £12bn which we’ll recover. Then there’s the fishing industry revival, and the value of the fish that’s all ours, even if we choose to licence some. No wonder the EU wants to punish us.

        1. Peter D Gardner
          February 23, 2018

          The problem with that is that UK Treasury would welcome that revenue and were industry and consumers then to switch to cheaper domestic production or non-EU imports it would find means to retain that revenue through taxation of something or other.
          My theory of Brexit among other things is that the state does far too much creating too many dependencies on state intervention. This is one thing the UK has very much in common with the EU. I think it is that rather than EU-philia that gives the Civil service the appearance of being pro-EU. Let’s face it the EU is a technocratic government. It is bureaucracy on steroids.

    3. Rien Huizer
      February 22, 2018

      You should look at how many UK-made cars are actually sold there. Less than half, so maybe there is no domestic demand for more UK built cars. Big question.

      1. libertarian
        February 22, 2018


        Really? Do you really not understand? The point is IF the EU insist on punishing us there will be a 10% tariff on German cars, therefore Mercedes and BMW cars will become even more expensive than they are already which would lead to likely increase in the sale of Jaguars etc.

        1. Tom
          February 22, 2018

          So your message to UK consumers is – Brexit! You will pay more for your car! Brilliant

          1. NickC
            February 22, 2018

            Tom, But, at 10% tariff, cars from outside the EU would be the same as they are now. But if we put a 5% tariff on (half the EU’s) then rest of world cars would be 5% cheaper. But still a 10% differential to the existing EU tariff regime between EU cars and RoW cars. As you say – brilliant!

          2. acorn
            February 23, 2018

            Exactly Tom. That’s the bit Brexiters never realise. Domestic producers will up their prices to match the higher import price. All of which will be reflected ion CPI inflation.

          3. Edward2
            February 23, 2018

            Unless the EU prefers tariff free trade.
            Which the UK is offering.

    4. Rien Huizer
      February 22, 2018

      Should the UK join the TPP Japanese cars for the UK market would be built in Japan or Thailand. Look at the example of Australia.

      1. libertarian
        February 22, 2018

        Currently some Japanese cars made in the UK are sent to Japan !!!!

        I really think that you remainers ought to do a business 101 course

  3. Newmania
    February 22, 2018

    It is , for anyone who knows anything about it at all quite remarkable how weak this is , I have already provided comparitive growth numbers showing the dramatic chnage that took place in the UK economy from the time we joined the Common Market but I don`t have time to go over the bleedin obvious today.
    Can I just ask if there is anyone out there at all , in this echo room , who has inkling whatsoever, of the implications of calculating rate of growth with 1945 as your year 1

    Anyone ?

    Anyone ?…..

    Reply Same result if you take 1952

    1. duncan
      February 22, 2018

      It’s comparative not ‘comparitive’.

    2. Anonymous
      February 22, 2018

      The only echoing is yours and Andy’s .

      Oh – Lifelogic’s “GREENCRAP… greencrap… greencrap…” too.

      1. fedupsoutherner
        February 22, 2018

        Anonymous. Well I’ll echo greencrap again because L/L is right – it is crap.

    3. Woody
      February 22, 2018

      Lets look at 1975, we were the 3rd largest economy in the world in 1975 .. we are now the 6th. Thanks to the eu for their assistance in that achievement.

      1. bigneil
        February 22, 2018

        We should give the EU a round of applause – -we have apparently given them everything else.

      2. Dennis
        February 22, 2018

        From 3rd to 6th is very good news as this means other poorer countries are becoming wealthier. It will be good when we are 50th or lower.

    4. Newmania
      February 22, 2018

      2 months after the end of rationing , yes very clever the same point applies. All Nations experienced a vast expansion of production after the war for obvious reasons , and you have used this fact to entirely misrepresent the subject you are supposed to be shedding light on .

      Reply Get over it, it is not a feature of the start date – the post war period prior to 1972 saw faster growth than later.

      1. Mitchel
        February 22, 2018

        Economic mismanagement in the decade or so after the war was massive despite the handouts.From Corelli Barnett’s “The Verdict of Peace”:-

        “1950 marked the 10th year that Britain had depended on American loans or handouts to keep her national life going.When Lend-Lease was ended in 1945,the Labour government cadged a loan of $3.75bn to tide Britain over.Supposed to last until 1951 but in fact had been mostly blued by 1948.However in that year the Americans coughed up again in the form of Marshall Aid of which Britain by 1950 was receiving the largest share of any European country-$2.7bn vs $1.7bn.”

        And as for industrial policy:”So here now on a Conservative fiddle was a fresh variation on the Labour government’s leitmotif in industrial policy from 1947 onwards.”

      2. Newmania
        February 22, 2018

        1958, -1973 UK gross domestic product per cap rose 95 per cent in France Germany and Italy 1958, -1973 UK gross domestic product per head rose 50 per cent in the UK
        Since 73 GDP per head has grown faster in the UK than in our neighbours

        No-one questions the basics , if you wished to be taken seriously you would argue against cause and affect but I don`t think you do I think you simply want to give the impression there is an argument

        1. Richard1
          February 22, 2018

          That is thanks to Thatcher. The U.K.s relative outperformance began with the Thatcher reforms not with EEC membership. It will be recalled that the Thatcher / Major govts various opt-outs especially from the euro, were heavily criticised by those like you who are now so dismissive of any argument against EU membership.

      3. NickC
        February 22, 2018

        Newmanis, Have a look at this graph from the ONS of GDP annual growth:


        It’s pretty clear that 1949-1973 growth rates are better than 1974-2017. Moreover volatility post EEC/EU is worse.

        1. Woody
          February 22, 2018

          How do you know that? Bet you are guessing.

          1. NickC
            February 22, 2018

            Woody, Huh? I know it by looking at the graph. You can, too.

          2. Denis Cooper
            February 22, 2018

            Maybe he’s looked at the chart …

    5. Denis Cooper
      February 22, 2018

      The question I posed to Ed, which he cannot answer, stands for you as well.

      Nobody without prior information could look at the chart of the growth of the UK economy since the late 1940’s and say “Look, that’s where we joined the EEC, you can see an upwards break in the curve, and look, here’s where the Common Market was developed into a Single Market, another boost to our economy”.

      And nor will they be able to look back in coming decades and say “Look, that’s where we left the EU, you can see the huge difference it made.”

      1. Timaction
        February 22, 2018

        Because the Common Market/EEC/EU was never about economics but the creation of a super state by stealthy incremental treaty change over time so the people wouldn’t notice. The legacy parties all knew it, conspired together and with the media to hide it from the public and only the emergence of UKIP and in particular Nigel Farage, educated the the Nation in what had happened to them and what their future would be. Shame on them all.
        Today we’re told the Cabinet are meeting to discuss the type of Brexit we want! Really? Really? are the Tory’s so incompetent that they have waited almost two years after the referendum for this meeting? Why have they promised a £40 billion bung for nothing, plus £10’s billions more in existing assets to the EU?
        I see the net migration figures are totally out of control, we’re hugely in debt, our public services and health are collapsing, hugely over populated, yet the Tory Home Secretary wants more from the middle East here whilst the rich middle East take none! Totally out of touch Tory leaders.

  4. duncan
    February 22, 2018

    The Eurozone, its Target2 payment mechanism system and the dodgy balance sheet of the Bundesbank are fundamentally unstable. It is a system designed around the needs of the German economy and is designed on the very premise that the German economy must continue to expand to prevent Eurozone implosion

    Take a look at the balance sheet of the Bundesbank and you will see worthless IOU’s to the tune of around EU900bn that are effectively credit notes issued to facilitate trade between Germany and other EU member states. The problem is that these IOU’s will never be repaid. That represents a fissure in the seemingly impenetrable armour of not just one of the world’s major central banks but a bank that is the beating heart of the Eurozone

    Should Italy default on its obligations to the Germans for example this alone could bring the entire Eurozone to its knees though I suspect the EU would use this is a pretext for further integration. That could trigger Italy leaving the EU as I doubt the Italians would tolerate seeing their nation wiped from history

    If or should say when Germany ever enters into recession and trading activity contracts the Bundesbank will be heavily exposed. The system upon which the EU is built will splinter. It is important that the UK is not exposed to this in any shape or form.

    We must focus on strengthening the UK’s industrial and financial base in preparedness for the next economic shock which will happen at some point. Sovereign debt is a major issue for many western nations and that problem ain’t gonna disappear into the ether. Those debts will have to be repaid in some shape or form.

    The UK must remain flexible, open and fiscally stable. A strong banking system, efficient public services (unproductive and the sector that is essentially reliant) and an unencumbered private sector (the productive, wealth creating sector that pays all the nation’s bills).

    The Eurozone creates a mirage of economic growth. What we see is not economic growth but activity designed to create the impression of growth.

    The EU is a political con-trick and its heart is Germany that buys political loyalty from other EU member states using access to its own economy in some form Faustian pact. Nations selling their souls (sovereignty) to the EU devil and in return receiving all the worldly pleasures (access to German markets) that the EU (Germany) can bestow.

    1. Rien Huizer
      February 22, 2018

      You are a little behind. Thatget2 balances are going down and are becoming more diversified. Try harder! The Eurozone is in much better shape than it was 6 years ago and its instutions are much stronger. As you may have noticed, the incoming German government is more pro-EU than ever before. Even in Italy and Creece, the anti-EU fringe is looking for other things to be angry about.

      1. Prigger
        February 22, 2018

        No need for you to trumpet the EU then. We shall learn as we see the EU become the leading power in the world. Dutch eggs. Just so German cars. French Italian and Spanish unemployment and still too few EU homes for refugees in Calais. You’d think with 500 million people they could give them some home somewhere…a bite to eat to stop them rioting? Love?

    2. acorn
      February 22, 2018

      Duncan, where do you get this crap from?

      The Bundesbank is a national central bank (NCB), just like all the other 27 national central banks plus the ECB, that form the European System of Central Banks (ESCB). The Eurosystem is the ECB plus the NCBs that have adopted the Euro currency.

      The Bundesbank is never going to go broke in its shared Euro currency, that is issued by the official Euro currency issuer, the European Central Bank (ECB). Likewise, the ECB is never going to run out of Euro to bail out any Euro commercial bank. Just like the BoE bailed out the UK commercial banks.

      We are not on the Gold Standard and the Breton Woods system collapsed nearly five decades back. Thanks anyway, your bizarre comments are a real hoot and support the need for a second referendum.

  5. Iain Gill
    February 22, 2018

    Yes leaving the single market is not the big issue many make out.

    However the sheer volume of immigration we are currently experiencing is a big issue, and it seems senior government Brexiteers and Remainers are united in wanting to keep the immigration floodgates open. If the people dont see real change in this area I am worried what will happen. The political process will have failed and the people will be angry.

    1. Denis Cooper
      February 22, 2018

      Regaining full legal ability to control immigration, as a great majority of the UK voters want, is one of the main reasons why the UK must leave the EU Single Market. Even the Labour Party is still hesitating about defying the people in general, and its own supporters in particular, on that, and in the process getting itself into a more and more ridiculous position.

      1. Iain Gill
        February 22, 2018

        Diane Abbott announced the new labour immigration policy and it is full steam open doors.

    2. Rien Huizer
      February 22, 2018

      Without immigration the UK economy would not have grown as much as it did during the past 10 years. So there is no issue with immigration. If the Poles are shown the door, immigrants from elsewhere will be needed. The subcontinent for instance, or Ukraine..

      1. Iain Gill
        February 22, 2018

        Wrong on so many levels

      2. Iain Moore
        February 22, 2018

        I presume you are joking, as GDP per capita hasn’t grown in the last decade, its fallen.

        1. Longinus III
          February 22, 2018

          Don’t confuse him with facts, he never responds anyway, just trolls and runs.

        2. APL
          February 23, 2018

          Iain Moore: ” as GDP per capita hasn’t grown in the last decade, its fallen.”

          Presumably a case could be made that GDP per capita has fallen because economic activity has remained stagnant yet the population has grown through immigration.

          QED, immigration has made us all poorer.

          Rein Huizer: ” If the Poles are shown the door, immigrants from elsewhere will be needed. ”

          Why would we show the Poles the door? There are whole towns of Polish people that have been in the UK since the end of the Second world war!

      3. NickC
        February 22, 2018

        Rien, As Iain Moore intimates you must know the difference between GDP and GDP/capita. Well, so do we. So why do you try to pull a fast one when you must know you will be found out? You’d be more convincing if you didn’t just swallow Remain propaganda.

  6. Peter
    February 22, 2018

    I did actually vote a Common Market. I never voted for a comprehensive political union though.

    That is my main objection,

    The decline of coal and steel and the car industry are probably not the fault of the Common Market EU either.

  7. Mick
    February 22, 2018

    The Eu was created to get rid of our industrial past, and they did a pretty good job of it with the help of our polictical party’s lab/con/lib’s , without there help the Eu wouldn’t have succeeded in it, well now the people of this great country have spoken and yourself and your other fellow mps had better listen to the 17.4 million and growing and get us out of the shambles called the Eu with no strings or tricks that can keep us in it by some slight of hand, we are a proud nation and want to have it run by people who we can chuck out every 5 years or sooner if they don’t do what we put them in Westminster for, so don’t take us for granted we have had enough of all the lies and promises

  8. Konrad
    February 22, 2018

    The errors here are too many to list so I limit myself to one. The Faciliation of Trade agreement has NOTHING to do with non tariff barriers, it concerns only procedures. As ever, your misunderstanding of non tariff barriers is total

    Reply Try reading the document – it has everything to do with smooth border arrangements and electronic frontiers!

    1. L Jones
      February 22, 2018

      What a very patronising and insulting post from Konrad. It says a lot for our host’s strength of character that he didn’t just moderate it, reject it and cast it into the ether. That’s as much attention as it deserves.

    2. Tom
      February 22, 2018

      Brilliant replyJohn. It proves beyond doubt you have no idea what an NTB is. Clue – nothing to do with borders

      Reply I am well aware of the range of non tariff barriers which include friction to processing cargo in transit at the borders.

    3. NickC
      February 22, 2018

      Konrad, You are correct – the EU goes out of its way to impose extensive, arbitrary, protectionist non-tariff barriers. But the EU does so already whilst we are in the EU. At least out of the EU we will have the WTO on our side.

      The TFA does deal with non-tariff barriers. According to the WTO: “Bureaucratic delays and “red tape” [ie: non-tariff barriers] pose a burden for moving goods across borders for traders. Trade facilitation … has therefore emerged as an important issue for the world trading system.”

    4. sm
      February 22, 2018

      Konrad: Mr Redwood’s experience and background are known to us all, and it is therefore up to his readers and listeners to make a judgement on the validity of his opinions.

      However, we do not know in what way YOU are qualified to accuse him of errors, so I for one would be interested to learn about your background.

    5. libertarian
      February 22, 2018


      As you seem pretty ignorant perhaps you would explain why I already face non tariff barriers in Germany even though allegedly we are in a single market?

      1. Edward2
        February 22, 2018

        Correct Libertarian
        I often found it easier to export to USA or Canada than the EU

  9. acorn
    February 22, 2018

    Current trade pacts generally require exporters to prove that 50 to 60 percent of a product’s components are from the originating country to avoid tariffs. But UK cars are now just 44 percent British-made on average, according to the Automotive Council.

    Such numbers mean auto companies are already bracing themselves for the UK to strike post-Brexit trade deals that will most likely require them to source more vehicle parts from within Britain.

    Renault Nissan Mitsubishi Group now makes more vehicles than VAG Group.

    1. Rien Huizer
      February 22, 2018

      So easy, right?

  10. Anonymous
    February 22, 2018

    Being in the EU did not stop major outsourcing and factory closures.

    Fewer middle earners can afford to get on the housing ladder – this happened whilst in the EU. We are STILL in the EU.

    Andy lies to us that it is the fault of old people house blocking.

    He pedals hatred and is allowed to do it.

    His compatriots claim that we should ignore the Leave result because baby boomers are dying off (which they are.)

    So where are the freed up houses then ?

    If Mrs Sturgeon was allowed to say “It’s *common sense* that you don’t leave the single market” why can’t we say that it’s *common sense* that having open borders impacts house prices in a big way ?

    The EU hasn’t made us richer – it’s just got us used to borrowing more.

    1. L Jones
      February 22, 2018

      Open borders also impact our Health Service, as well as our housing market. But in ”newspeak” we are not allowed to call the ”NHS crisis” and the ”housing crisis” what they actually represent and should be called – a ”population crisis”.

      1. APL
        February 24, 2018

        L Jones: ” But in ”newspeak” we are not allowed to call the ”NHS crisis” and the ”housing crisis” what they actually represent and should be called – a ”population crisis”.”

        OK but not quite accurate.

        The cause of these things is the ‘immigration crisis’.

        We are on the cusp of very significant automation making most of the lower paid jobs, and indeed a significant fraction of middle paid jobs surplus to requirements – the last thing we need to be doing is importing ignorant, low skilled, illiterate migrant workers.

        We are being ‘guilted’ into the open borders policy because history. Well, as it happens the Anglo Saxons have brought unprecedented benefits to worldwide mankind.

        It’s time we stopped being guilty, it’s time we stopped permitting our politicians to exploit our good nature.

    2. Denis Cooper
      February 22, 2018

      I think that should be “He peddles hatred and is allowed to do it”.

      Perhaps he was badly treated as a child and still resents the grown-ups.

      1. Anonymous
        February 22, 2018

        Thank you Denis.

        I don’t have a spell checker and this is the first time you’ve had to correct me.

  11. Alan
    February 22, 2018

    The UK’s annual growth rate before the single market was usually lower than that of other major EU countries. After the single market it was usually higher.

    We should have put more effort into improving the single market for services, where most of our exports are directed. Then the improvement might have been greater.

    Most economists consider that our growth rate after we leave the EU is likely to be lower than it would be if we stayed in the EU.

    Reply The UK did try to get a single market in services but was resisted. Our growth rate out of the EU should be better than in the EU

    1. Denis Cooper
      February 22, 2018

      “The UK’s annual growth rate before the single market was usually lower than that of other major EU countries. After the single market it was usually higher.”

      That’s funny, because according to this German study the UK got less than the average benefit from the creation of the EU Single Market:


      “20 years of the European single market: growth effects of EU integration”

      From the table on the front page:

      Germany derived the greatest benefit, a 2.3% increase in per capita GDP – which was about the average benefit stated by the EU Commission for the whole of the EU – while for the UK the benefit was only 1.0%.

    2. NickC
      February 22, 2018

      Alan, UK GDP average % annual growth was lower in the Single Market (post 1992) than the same before we joined the EEC/EU (1949-1973). That other EU countries also suffered after the introduction of the SM is no surprise to me. As for services, the EU resisted change that would have suited us, throughout our time in it.

  12. acorn
    February 22, 2018

    Current trade pacts generally require exporters to prove that 50 to 60 percent of a product’s components are from the originating country to avoid tariffs. But UK cars are now just 44 percent British-made on average, according to the Automotive Council.

    Such numbers mean auto companies are already bracing themselves for the UK to strike post-Brexit trade deals that will most likely require them to source more vehicle parts from within Britain.

    Renault Nissan Mitsubishi Group now makes more vehicles than VAG Group.

  13. Helen Taylor
    February 22, 2018

    Why is this information readily available, yet there is a handful of people around a table in chequers that seem incapable of understanding this and want to keep us tied to the project. For Gods sake when are they just going to walk away from these sole destroying negotiations. Theresa May gave so much confidence in her initial speech when Brexit means Brexit. Now if feels so far away and getting further. Why dont they just say we are leaving next year we are going on to wto rules and when you are ready to start negotiating in reality terms you come to us. A few months without the money tree would soon have the talking in earnest. Most of us are just getting sick and tired of the whole mess. Not that any of us are giving up on leaving and I certainly will go to my grave being a leave voter. But if she took that view and just got on with it and let the remoaners and the media just live with it they may just finally get behind the positives of the case.

    1. alan jutson
      February 22, 2018



      1. fedupsoutherner
        February 22, 2018


        I agree with Helen too.

    2. Denis Cooper
      February 22, 2018

      One of those persons is my local MP and I have done my best to educate her over the past twenty years. Recently I have pointed out in a letter in the local paper that Michel Barnier knows that on the EU Commission’s own estimates the EU Single Market has been worth only about 2% of GDP averaged across the EU, and he will be laughing up his sleeve at the way the UK government is wriggling around to try to preserve such a pathetic gain. Then I pointed out in another letter that the Treasury forecasts are always rigged towards economic disaster if we leave the EU and the recent leaked forecasts are just a new edition of the flawed forecasts issued in April 2016. This week I have pointed out that the goods crossing the land border into the Irish Republic are worth a mere 0.1% of UK GDP, and yet it is being seriously proposed that all persons and business across the whole of the UK must remain subject to all EU laws so that the EU and the Irish government won’t need to reintroduce any checks at the border, a border which they prefer to pretend does not even exist … the answer is that my MP is not interested in the truth, she and her government must maintain the fiction the Tory party has been propagating for decades, and she cannot admit that there has never been a good economic reason for subjugating our country in a European federation, it has all been lies.

    3. NickC
      February 22, 2018

      Helen, Well said.

  14. Richard1
    February 22, 2018

    Is it really the case that Mrs May is offering an indefinite transition period with subjugation to the EU, handing over of money, and no ability to run an independent trade policy? I can’t believe it & hope and assume it’s all part of the negotiation dance. The only thing that’s really important is the U.K. Govt is in a position, come October or so, to tell the EU, credibly, that if there isn’t a sensible agreement the U.K. will prefer the WTO option with effect from March 19. I think people will be fine with compromises during a transition so long as there is a clearly agreed end position. It should not be entered into if it’s a bridge to nowhere.

    Reply No

  15. Sakara Gold
    February 22, 2018

    This is an interesting post that raises many points concerning the UK’s industrial decline.

    However, there were significant other reasons why we lost so many skilled jobs and strategic industries. Very high inflation (20%+ pa) in the 1970’s and the associated unionised labour unrest. Prices and incomes policies. Very poor and weak management. A lack of investment in new production technology. Severely reduced academic research and development (at which we excelled). Above all was the damage caused by Thatcherism and, acknowledged, Major/Lamont and the ERM fiasco.

    As inflation and global interest rates inexorably rise I forsee a tipping point being reached, where the size of the national debt and the rising costs associated with servicing it overwhelm the ability of the BoE to control the situation and the whole fiat currency edifice comes crashing down into the mother of all recessions.

    Reply The worst era for closures and job losses was the 1970s with the first full impact of the EEC coupled with Labour’s IMF visit and big debts

  16. hans christian ivers
    February 22, 2018


    this is a very interesting analysis, which has some interesting aspects.

    Alll countries in Europe grew much faster in the years after the war and grew less after 1972 as re-construction had ceased and growth rates fell across the board.

    The quality of British cars during the 10970s after Japanese imports grew in the European market made British cars totally uncompetitive and they were very unreliable as well.

    On the WTO rules I am much more worried about non-tariff barriers , than the tariffs you are mentioning, which could be barriers to a market to which our exports are now growing significantly due to the much higher growth rates in Europe for the moment.

    John, long-term we might be able to adapt to the so-called new WTO regime , but as oppose to you I believe it will take much longer and it will be much more expensive for the consumer and Britain in the meantime.

    The savings to the EU budge is 10% of the UK trade deficit, so that will make little difference,

  17. Kenneth Morton
    February 22, 2018

    A plain and simple explanation of the mistakes that the United Kingdom made in the second half of the twentieth century. Thank you!

    The country now has the chance to close the book on this era and take advantage of the opportunities that freedom from the stranglehold of the EU will bring. The economy will be very different as we play to our national strengths. I just cannot understand why the young in the United Kingdom do not recognize this. Their counterparts in Spain, Portugal, Italy, Greece and Poland certainly do.

    I look forwa

  18. Ian wragg
    February 22, 2018

    For the sake of clarity and precision can you John and all other posters start referring to the Transition/Implimentation period as EU membership extension.
    We are certainly not transiting anywhere or implementing anything. It would also appear that we have no intention of negotiating anything just acceding to the EU demands.

    1. L Jones
      February 22, 2018

      It needs to be said more clearly, IanW. It’d be good to believe that Mrs May is playing the long game, but I’m reluctantly beginning to think we’re being sold a pup.

    2. Denis Cooper
      February 22, 2018

      Yep, transition implies change, a transition during which nothing changes is not a transition and would better be described as a continuation or extension.

  19. agricola
    February 22, 2018

    The Single Market is a protectionist racket. It shields EU (French and German) agriculture from overseas competition. For poor countries it operates Overseas Aide rather than Overseas Trade. Its only believers are those who couldn’t run a Chippy, and those who have a vested interest in it for self protection ie the CBI.

    It limits the development of many EU member states such as the UK by insisting on negotiating all overseas trade agreements , usually in the interests of the loudest voices within the EU. This is why the EU is currently terrified of the UK’s ability to negotiate our own trade deals and is trying to insist that we stay tied to all their restrictive rules after we have left. The EU should be told we will operate to satisfy our customer needs, end of story. If the EU want red bath plugs we will supply red bathplugs.

    I do not blame the EU for all the UK’s ills since 1972. The car industry lost out because it made a low quality product while at the same time managing it very badly. Apart from Morgan and it’s flat capped, string backed gloved aficionados , it is now all a foreign owned and managed industry.

    Much of the other failures in UK industry were down to government ineptness. We gave away jet engines, radar, computers, VTOL aircraft, hovercraft, the internet, and genetic engineering to countries more capable of exploiting them combined with what they trawled from Germany after WW2. We cannot, having pioneered the industry, even design and build our own atomic power stations. The coal industry was killed off in it’s battle with government and then by the vocal vested interest of the green lobby who are even being allowed to block fracked gas. The result is very expensive power that exports more industry while in Germany they burn lignite, the dirtiest possible fuel. Sorry but UK government has all the qualities of a Whitehall farce.

    1. agricola
      February 23, 2018

      Why, your moderation policy is beyond me despite your frequent explanations. Is it that you do not wish anyone else to comment on my response, it being too toxic.

  20. Bob
    February 22, 2018

    @Mr Redwood
    This confirms what I have suspected for some time, the BBC has been misleading the British public.

    That is a breach of it’s duty under the Royal Charter.

    No wonder you don’t get invited to join the QT panel.

    1. bigneil
      February 22, 2018

      After seeing the BBC’s program The Mash Report a few days ago, the ~BBC should be abolished. Funding by threat of jail, then the mocking attack on JR–M in this program.

      1. Bob
        February 22, 2018


        I presume they didn’t satirise anyone from the Remain side?

  21. alan jutson
    February 22, 2018

    A different outlook for sure.

    Who invited the audience.

    How was your speech received.

    Did you get many questions.

    Reply The Speaker invited the audience, it was well attended and there were many questions with no hostility

    1. Bob
      February 22, 2018

      “many questions with no hostility”

      Talking of which, I notice that despite more than half of voters deciding to leave the EU, tonight’s Question Time panel tonight is once again 80% Remainers.
      (83%, if you count Dimbles).

    2. eeyore
      February 22, 2018

      Alan Jutson asks the questions which were in my mind. I am obliged to him and to JR for his reply.

      Of all the champions of Brexit our host stands out for depth of knowledge and clarity of thought. In this climate of heightened emotions it is good to hear his address was courteously received. I hope there were many Remainers in his audience. While changes of heart may not have taken place, at least they will have had food for thought.

  22. Brian Tomkinson
    February 22, 2018

    Such a pity that as each day goes by Mrs May seems to be willing to capitulate to all and any demands from the EU. The feeling of betrayal is growing rapidly.

  23. JoolsB
    February 22, 2018

    As we are running a massive trade deficit with the EU, they need to trade with us as much as we do with them if not more and for them to impose any tariffs at all would be madness on their part and would be done out of pure spite to punish us, nothing else. The fact they would be punishing themselves more seems irrelevant as long as they ‘teach us a lesson’.

    Unfortunately May after all the tough talk is capitulating so no doubt we will end up with some form of ‘soft’ Brexit. To do so would be betraying the British people. Her ‘no deal is better than a bad deal’ seems to have been conveniently long forgotten. We’ve already been betrayed by the ‘two’ year transition period which could very well end up being longer where nothing will change.

    Come March 2019 we need to walk away. No transition period, no single market, no customs union and certainly no divorce payment. Unfortunately we need a strong leader and Brexiteer to achieve that but for some stupid reason John, you and your colleagues chose May over Leadsome.

    1. Tom
      February 22, 2018

      They have to impose tariffs if we walk away. That is the WTO rules your host is so fond of. Please stop ranting and start learning

  24. duncan
    February 22, 2018

    As an aside. When is this Tory govt, its PM and its MPs going to target Corbyn and his Marxist allies for targeting and threatening the freedom of the press. This individual is the most serious threat to our liberties and freedoms since Hitler. He and his supporters are a truly sinister presence in British politics today

    We need laws to protect press freedom and indeed laws to protect individual freedom and liberty from these ‘people’.

    If these ‘people’ ever gain power they will destroy the UK

    1. duncan
      February 22, 2018


  25. Bert Young
    February 22, 2018

    John’s comprehensive analysis of our relationship with the EU is very welcomed in my house . I voted against joining the ” Common Market ” in the first place and I have always rejected any thought of cementing further ties with the EU . Our links with the world and with the Dominion countries were very strong and successful and I could never see any sense in the change that subsequently happened . Germany was the main benefactor and we were foolish to let this happen .

    We are now faced with the necessary problem of re-orientating our trade following the long years of our alignment with the EU ; there are different individuals in charge now of our commerce and their incentive and re-education is vital for the change to occur and to be successful . Much of this can be achieved by a stimulus from the Treasury ; Hammond is unlikely to do this so he has to be replaced . I see his removal as absolutely necessary in the short term . A further ingredient necessary is to stop the compromising that has been featured under Theresa’s leadership ; if she intends to remain she must establish her own goals and stick to them .

  26. Original Richard
    February 22, 2018

    It’s all about who controls Europe this century and no different in this respect to the previous two centuries.

    Membership of the EU/SM/CU means that we are not in control of who governs us and thus not in control of our borders/immigration, money/taxation, foreign, trade and energy policies, assets (fishing grounds) and in the future our military etc etc…

    Whatever damage the EU can do to us outside the EU is nothing compared to the damage they can wreak upon us when we are inside the EU and subject to their directives, rules and regulations decided either by unelected bureaucrats or by QMV.

    If the City thinks it is safer inside the EU then it is deluded.

    Particularly when the SM regulations are flouted by cheating on subsidies, open procurement rules and by large corporates allowed to take huge commercial advantages by using the SM to sell their non-compliant products with impunity, such as German car manufacturers did with their diesel emissions fraud.

  27. William Long
    February 22, 2018

    I wonder why we never heard any report of your clearly excellent and considered speech from any of the media? You might have thought that the BBC, if nothing else, would have wanted to dosomething to counter it.

    Reply It will be shown in full on BBC Parliament on Saturday I am told

    1. Denis Cooper
      February 22, 2018

      I shall look out for it, JR.

    2. Denis Cooper
      February 22, 2018

      At 9 pm, now on my planner.

  28. John E
    February 22, 2018

    I see Unilever are voting with their feet and leaving the UK and consolidating in the Netherlands. I wonder which other Anglo-Dutch groups will become just Dutch?

    1. Prigger
      February 22, 2018

      “Anglo -Dutch” ? A quaint and very much antiquated British and even Dutch term which betrays a psychological denial of the actual ownership of seemingly national companies.

    2. Pragmatist
      February 22, 2018

      Firms are often attracted to jurisdictions where they believe low wages are imminent.

    3. Blackberry stain
      February 22, 2018

      The company has had worldwide growth problems. Not surprising , one of its main products, fabric stain remover, really does need reporting to Trading Standards.

    4. libertarian
      February 22, 2018

      John E

      That decision has a) Not been made and b) is being considered because they need a consolidated company in order to fight off a proposed US takeover. c) They are NOT leaving the UK, they are increasing their UK based research arm, they are considering amalgamating their current 2 HQ locations

  29. TedC
    February 22, 2018

    Thanks for the history lesson John, but while looking back so far is informative and instructive doesn’t really cut it, it is in the past and what we need now are people with a past who can see clearly into the future- experts with courage and imagination and clarity of vision who can set out a pathway for some guidance, and just as they say in financial circles past performance is no guarantee of future success- it works for trade and politics- As a first I would like to know what plans Dr Fox has with new international trade partners to replace our existing CU arrangement? must be something in the pipeline?

    Reply I have set out clearly what we can and should achieve once out of the EU, and do so again in this lecture where I will reproduce more sections in the days ahead.

    1. Bob
      February 22, 2018


      “what we need now are people with a past who can see clearly into the future”

      you do know that Dr Who is a fictional character, right?

  30. Andy
    February 22, 2018

    It is 2018. It is not 1970.

    There are no British car manufacturers – except niche players like McLaren.

    Not many of your constituents can afford one.

    Still, as lots of them will be losing their jobs they won’t need a car anyway.

    1. L Jones
      February 22, 2018

      Gleeful again, Andy? You must hug yourself whenever you squeeze out some little snippet of bad news, or manage to twist perception of a situation. Thankfully, for our economy at the moment there is plenty of positive stuff. Stop looking down into the gutter and try looking up at the stars. You’ll feel better, and so will we who notice your drivel.

    2. Ron Olden
      February 22, 2018

      Dear Andy

      The nationality of the shareholders in any manufacturing company is irrelevant and neither is McLaren Automotive a ‘British’ Company.

      When I last looked, at least 50% of the shares in it are owned, (or at least beneficially owned), by (foreigners ed)

      Ron Dennis no longer owns any shares.

      In any case it makes no difference to Sunderland, Woking etc whether its’ car factories are owned by a company listed on the UK Stock Exchange, or whether they are owned by a company listed in Japan, Germany, or by the King of Bahrain.

      This is called ‘inward investment’. UK investors, however also invest large sums in countries abroad. It’s called ‘capitalism’. I for example, own some of the shares in Lufthansa. But that doesn’t stop it being a ‘German’ airline.

      UK investors will almost certainly own some of the shares in any global company operating in the UK, but that doesn’t really matter either.

      What counts is where the company carries out its’ economic activity. Only a miniscule proportion of the benefits accrued from operating a car manufacturer ends up in the hands of its shareholders. All the rest goes to the locality of the country where the business activity is located, and in taxes (Income Tax, NIC, VAT, CT, Petrol Tax etc etc etc).

      The UK motor vehicle manufacturing industry contributed £15.8 billion to the economy in 2016, 0.9% of total output, and 9.4% of manufacturing output. The industry employed 155,000 people across Great Britain in 2015. 1.8 million vehicles were produced in the UK in 2016, 78% of which were exported.

      As for manufacturing in general, the UK is the world ninth largest manufacturing nation, makes up 10% of GVA, 45% of UK Exports, and employs 2.7 Million people. But that doesn’t include the Service Industry Contractors who service it.

      It also represents 68% of business R&D, and provides 14% of business investment

      Incidentally, in this respect one of the reasons why the UK appears to have fewer people employed in ‘manufacturing’ than some other countries, is because manufacuring companies here, contract out things like Payroll Services, Cleaning, Marketing etc, or set up service companies to do them. The work then get counted in the statistics as ‘Service Sector’.

      Manufacturing output has boomed since the fall in the overvalued £ following the Leave Vote.

      But when did facts ever play any part in Remainer thinking?

    3. Robert Betteridge
      February 22, 2018

      I’m sure my 1957 Morris Minor will continue to chug along until Dyson comes up with an alternative. I suspect some of the newer cars will manage as well.

    4. Denis Cooper
      February 22, 2018

      Your first sentence is correct, the rest are just more ill-informed childish twaddle.

    5. Tintin
      February 22, 2018

      “It is 2018. It is not 1970.” It just shows a ‘Moaner can get SOMETHING right.

    6. Edward2
      February 22, 2018

      Rubbish the automotive industry employs hundreds of thousands of people
      Jaguar Land Rover Toyota Nissan Mini to name just a few.
      Huge employment in the component industry.

      You vary from telling us Brexit will leave us with terrible labour shortages to telling us we will all be out of work.
      It can’t be both.
      So which is it Andy?

      1. Prigger
        February 22, 2018


    7. NickC
      February 22, 2018

      Well, Andy, at least we won’t be paying our hard-earned cash over to the EU parasite.

    8. Anonymous
      February 22, 2018

      “There are no British car manufacturers. ”

      Yes. Shut whilst members of the EU.

      Housing will get cheaper, competition for jobs less with less pressure on services. The average Briton will feel better for it and they will knuckle down and make Brexit Britain great.

      If only Mrs May would stop caving in.

      1. Mitchel
        February 22, 2018

        From even her brief acquaintaince with the Chinese,Aunty May has learned that when you kow-tow before the representatives of a Celestial Empire,your forehead must touch the floor not five or six times.Not seven or even eight times but nine!

      2. Peter D Gardner
        February 23, 2018

        Mrs May and her cabinet are now the greatest obstacle to Britain’s future prosperity.

  31. Tabulazero
    February 22, 2018

    The Rt Honourable John Redwood is lamenting the demise of British coal mines and steel mills.

    Could you please remind us what part did Margaret Thatcher play in the above ?

    Your are pushing boundaries in the science of hypocrisy on this one, Mr Redwood.

    Reply The decline was continuous and remorseless through the Labour government of the 1970s, the Conservative governments of the 80s and 90s and the Labour government after 1997. None of those governments wanted the decline but it happened

    1. Mark B
      February 22, 2018

      In fact, the decline can be traced even before then.

  32. Iain Moore
    February 22, 2018

    Well said . Unfortunately we have a defeatist British establishment, whose loss of confidence in our country took us into the EEC/EU, and whose on going lack of faith in us is going to mean they squander the opportunities and benefits that Brexit offers . If we are to have a future, we not only need to liberate ourselves from the EU , but the British Establishment as well. At times I feel like shouting at the TV at them……’for gods sake, just for once, get off your knees’.

  33. A.Sedgwick
    February 22, 2018

    …and your response Lord Heseltine is?

  34. Adam
    February 22, 2018

    The majority, who voted in favour of Brexit, decided according to what they assessed as best overall. The improvement of freedom from EU restriction is higher value than temporary financial risks, if indeed any of substance would exist, when our own Govt steers us.

    The many solid financial points raised expose Remainers’ prophesies of doom to bright-lit contrast. If they are unable to see truth, remaining in fear of calamity, the EU may offer them counselling or safe refuge.

  35. Mick
    February 22, 2018

    Off topic just a little
    I keep hearing journalis and mps harping on about a hard border or soft border on the Ireland of Ireland, here’s what we do is say tough , main land England are not going to be overruled by just 1.8 Northern Ireland people, if that means the Dup withdraw there support so be it, when the GE comes all these mps who have shown there true colours for the Eu will be picking up there p 45 and Westminster will have true believers in GB

  36. David Pepper
    February 22, 2018

    I voted to remain. However I accept the result of the referendum with as much good grace as I can muster. I watch with interest and much shaking of the head the muddled efforts to extricate the UK from the EU.

    The reasons I voted to remain were many and perhaps slightly more abstract than simply focusing on specific issues. Tho sum up my reasons succinctly I suppose my main reason is because I feel we, as a country, aren’t very good when left to our own devices.

    Whenever I travel to Europe and see how they operate I’m more often than not left with the thought “why can’t we do things as well as they do as here?” whether it be trains, motorways, airports, houses, town planning etc. etc.

    We can’t provide sufficient houses, our motorways are more like conveyor belt car park, we can’t decide whether we need new airports, nor where we should build them even if we do need them, our rail system is a shambles, the list goes on and on.

    If I had to sum up my feelings in one simple example it would be the Mini.

    The Mini was a stroke of genius. It proved a hit from the start, we couldn’t build them fast enough, nor could we make any money from it.

    Then along came our friends from Germany. They looked at the Mini, used their expertise and basically said “sorry boys, you’ve been doing this all wrong, this is how you do it.” Hey presto the Mini has reappeared as an up to date, much wanted, money making best seller.

    Despite it being blindingly obvious that we don’t have a monopoly of good ideas we persist with this arrogance that tells us that Johnny Foreigner has nothing to offer us.

    Mr. Redwood mentions the decline in UK car manufacturing citing Riley, Vanden Plas, Rover and so on. Their decline was simply because they weren’t up to scratch, put bluntly they were poorly built and outdated. They couldn’t compete with Audi, BMW, Mercedes, Renault, Peugeot, Fiat, Alfa in terms of technology, styling or reliability. It took the likes of Nissan, Honda, BMW to come along and show us how it’s done.

    I really hope that we can sort ourselves out and succeed post Brexit. There’s no going back now. To succeed however we really must lose this insular arrogance and take on board how others manage to do things so much better than us.

  37. Tom William
    February 22, 2018

    How is it possible that an official policy document was not approved in Cabinet, who had 24 hours notice of it, and was sent to the EU?

    Very similar to the Prime Minister going to Brussels very early in the morning with a speech and having to fly back because the DUP had not been consulted and did not approve.

    Who is responsible for this shambles? I think we all know.

  38. Epikouros
    February 22, 2018

    We have been our own worst enemy when it come to undermining our own industries and manufacturers in the 1970’s and before we indulged in socialists industrial and labour practices and our management abilities were abismal in both the public and private sector(something that a Corbyn government will demand we repeat and which the misguidedly mostly lefties all see as a golden age). It was not the EU that helped us to put this right in fact they have been a drag on what was achieved by the policies of Margaret Thatcher and the investment in the UK by the likes of Japan and the USA. Bringing with them reform and better industrial and management practices.

    It has to be said that despite the EU UK has managed to pick itself up and the economy has improved. However if we had not joined the EU we would by now have done considerably better as their economic, regulatory, legal and social models are not suited to our more freer and less authoritarian ways. Not just freeing us from the single market that is holding our trade and industries back from reaching their full potential because of the vice like grip that Brussels has on it Brexit will gain the UK so much more. We know with certainty what that more is as you and those who follow and make comments on your articles concerning our EU membership have frequently, eruditely and eloquently voiced and listed them. Put all together they make a compelling case for quitting the EU post haste. Even those who have put forward their compelling reasons for remain in have had their case exposed as illogical, irrational, dire and in many ways totally false on the same pages.

  39. ChrisS
    February 22, 2018

    Transition Proposals

    If the proposals reported in the press as having been sent to Brussels do not specify an end date for the transition period, and which are, in effect, not any kind of “Transition” we would recognise as such, they are clearly not in the spirit of the referendum outcome.

    The proposals, as reported, are looking very much like a Remainer Civil Service scam designed to invite the EU 27 to allow an unlimited transition period which will then enable Remainers on both sides of the channel at least two years or more to work on reversing Brexit.

    I strongly suspect that the back channels between Brussels and Whitehall have been actively planning to thwart a genuine Brexit for a year or more and unless Mrs May gets a firm grip on events now, Remainers could engineer a second referendum in true Brussels style in the hope of reversing the outcome.

    I believe that Mrs May has been sincerely trying to deliver Brexit but she and Brexiteer Ministers in the cabinet have been fighting to honour the referendum result with both arms tied behind their backs.

    If Remainers can spin out the “Transition” until after the next General Election, there has to be a good chance that an opportunist Labour Party will chose to go into that election committed to reversing Brexit.

    We know that many Conservative and Lib Dem Remainers would be happy with a one term Labour Government if it meant no Brexit.

    Sir Humphry is alive and well, etc ed.

    1. Denis Cooper
      February 22, 2018

      I no longer trust Theresa May. I gave her a fair run, more than eighteen months, but she has exhausted the trust I was prepared to repose in her. I do not accept the media depiction of her presiding at Chequers trying to bring two warring sides together in a compromise, she is actually leading one of those sides and it is the side which will do whatever it can to dilute and delay and if possible prevent Brexit.

  40. Merlin Sinclair
    February 22, 2018

    I will confess to voting remain. But I am really trying to get on board with this and am a regular visitor to this site. I was reassured by this article. However, looking at historical GDP data for the US, I also noticed that the pre-1973 GDP growth was higher than post-1973. Looking further into the matter, I discovered that GDP pre-1973 was affected by a broad post-war boom in the developed countries – so to compare like with like would require indexing of some form. It concerns me that someone as experienced and knowledgeable as Mr Redwood did not know this. And please don’t lay into me. I’m a concerned citizen, not a hostile one, and I too want what’s best for this country.

    1. Adam
      February 22, 2018

      The collective intelligence of the UK electorate assessed & chose what & where would be best for our country. We are leaving the EU, heading for better first. Welcome aboard.

  41. Ron Olden
    February 22, 2018

    The EU Single Market and the Customs Union is a Corn Laws style, protectionist device, which interferes with its’ 28 EU Members, and 4 Non EU Associate Members’, capacity to trade with the other 167 countries of the World.

    It therefore makes every member of the Cartel (with the exception of the profiteering vested interests it protects), poorer than they would be, if we had Global Free Trade.

    But the Single Market and Customs Union is particularly ruinous to the UK. We have a £60 Billion Trade Deficit with it, whereas our trade with the other 168 countries of the World is in rough balance.

    And we are the country which is best placed by far, to trade with nearly all the other countries of the world. e.g. Canada, USA, Australia, New Zealand etc etc etc.

    We need to negotiate tariff free ACCESS to the Single Market but avoid MEMBERSHIP of it like the plague.

    We should announce unilaterally, that that there will be no tariffs imposed by us when we leave the EU. If the EU then chooses to impose tariffs on a country with whom it has a £60 Billion a year Trade Surplus, and which is not charging tariffs on its’ imports from the EU. We should respond accordingly.

    The EU has far more to lose than us, if they do impose tariffs, and will be exposed for the type of racket that it is.

  42. Chris
    February 22, 2018

    Please, Mr Redwood, can you explain this report by the D Express? Is there any truth in it? It seems that Theresa May just acts unilaterally without discussing with or informing her Cabinet?
    BREXIT SELLOUT: May surrenders to SNP demands as Scotland and Wales offered EU powers
    THE BRITISH Government has offered a significant concession to the Scottish and Welsh administrations in a bid to break the deadlock over Brexit legislation

    1. Chris
      February 22, 2018

      The path to Brexit is apparently paved with/littered with concessions.

  43. John
    February 22, 2018

    “The UK Treasury would collect about £16bn in tariff revenue on EU exports to us, giving plenty of scope to compensate. Meanwhile the rest of the EU would collect just £6bn on our exports to them. All of that money of course would go to the EU, not to member states governments.”

    I hadn’t realised that import duties go to the EU ad not to UK Treasury! That’s another £16bn we would get on top of the £11bn odd.

    And here it is in black and white


    Import tariffs have been going to the EU and not to us all that time!
    I can’t help but think a bigger emphasis should have been put on this. I know we will want to bring down those tariffs but even so we have been out of pocket far more than I realised.

    1. Denis Cooper
      February 22, 2018

      The member states collect the customs duties for the EU’s Common External Tariff and send 80% of the money to the EU.

  44. Denis Cooper
    February 22, 2018

    Well, I’ve been over this so many times and for so long that it has now become tiresome, and repeating it will do nothing to convince those who believe as a matter of blind faith that being in the EU and its Single Market is terrifically good for our economy.

    But here are some references from a month ago:


    in a comment which starts:

    “This seems to have gone missing, which is a pity because people need to understand how little the EU Single Market is actually worth to us …”

    and includes a Biblical reference:

    “That is a pathetically small mess of pottage to get in exchange for our birthright”.

  45. Rien Huizer
    February 22, 2018

    This is inherently speculative and there are too many details for short comments.
    One aspect that sticks out: the car industry. Despite my mother in law doggedly hanging on to English cars until she was too old to drive, the UK car industry was unviable under British ownership. The current owners (German, Japanese, American and Indian (plus Peugeot very recently) rescued (Rolls Royce(BMW) , Bentley (VW), Jaguar (first Ford then Tata) Landcover (first BMW then Tata), Mini (BMW), Hillman etc (Peugeot), Three Japanese built plants in the UK predominantly for the EU (incl UK) market. US firms stopped onther than routine investment long ago and most recently Vauxhall was sold to Peugeot.

    I reckon that without access to the continental market, the UK car industry would not have escaped its slide into specialism (racing cars, specialist engineering, luxury interiors) and employed a much smaller workforce. Will it survive without EU markets? who knows. It is costly to move the Japanese factories but they are very good at relocation and only Honda (with a declining presence in the EU) has no other locations in the EU. BMW has arrangements to build EU-bound minis in Europe and could replicate UK engine production by adding a shift in Austria. Tata and Nissan are expanding in Slovakia (the components hub for 4X4 vehicles in Europe is within easy driving distance from Bratislava/Vienna. Etc. Even for Bentley there is a future home in the EU: the Continental series shares a platform with VW’s Phaeton model and the Dresden plant where Phaetons were made (production will restart ina couple of years) has built Bentleys as well.

    The question is, of course, how many votes depend on the car industry? and what else will these people be doing four years down the road?

    Reply Business only shifts when it is much more profitable to do so. After the recent rise of the Euro against all currencies the Uk base has just got that much more competitive and profitable. We did lose a lot of motor industry e.g. Ford while i n the EU

  46. Denis Cooper
    February 22, 2018

    I’ve just watched Hilary Benn on TV saying we should stay in a customs union with the EU because that would go some way, BUT NOT ALL OF THE WAY BUT SOME WAY, to preserving an open border between Northern Ireland and the Republic.

    Is it possible that it has dawned on him that it was the creation of the EU Single Market, not the Customs Union, which made it possible to remove the border checks?


    “… Customs controls were first introduced at the land border in 1923, shortly after the establishment of the Irish Free State. These controls, and the associated system of ‘approved roads’, were maintained to varying degrees until the European Single Market was formally established in December 1992.”

    If so, perhaps he should pass that valuable insight on to his Labour colleagues.

  47. Denis Cooper
    February 22, 2018

    I was reading another blog yesterday and this statement struck me:

    “This was at a time when, before the advent of the Single Market, only operations which exported to EC countries were required to meet European standards.”

    Well, if that really was the case before the Single Market was created then that would seem to have been eminently sensible.

    As you were heavily involved at the time, JR, perhaps you could explain:

    Given that only a small minority of UK businesses were engaged in exporting to other EU countries – it’s now about 6% – why on earth did the UK government agree that all 100% of UK businesses would be forced to conform to EU standards?

    How would the UK government have reacted if the US government had then stuck in its oar to say that as some UK companies were exporting to the US all UK companies must conform to US standards, and then the Australians had said that as some UK companies were exporting to Australia all UK companies must conform to Australian standards, and then the Japanese had said … etc etc?

    Why were European countries granted the unique privilege of controlling standards for every company in the UK, irrespective of whether it exported to any of them?

    1. Andy
      February 22, 2018

      UK standards are EU standards.

      100% of non-dodgy businesses are required to meet them.

      Just sayin’.

      1. Denis Cooper
        February 22, 2018

        That is the current position, but there is no fundamental reason why that should always be the case in the future and good reasons why it should not be. If I suggested to you that as some UK based companies export their products to the US all UK based companies should be forced to operate under US regulations then even you would think that was daft. At least, I assume you have brains enough to see that it would be daft. Theresa May is struggling to square a circle with UK regulations closely aligned with EU regulations for some parts of the UK economy but not for others, or initially with close alignment but with the possibility of divergence later on, but I would suggest the correct division would be that the 6% of companies which export to the EU should be compelled by UK law to meet EU standards, just as they are now but through a new law, while those which have nothing to do with exporting to the EU should not automatically be required to adopt EU standards.

  48. Richard
    February 22, 2018

    This is a relevant recent article describing the origins of the EU’s CAP:
    It is notable how quickly France & the EU are now moving to reform the appallingly inefficient CAP: “Paris’s change of tone is remarkable” https://www.politico.eu/article/emmanuel-macron-breaks-french-taboo-on-farm-subsidies-cap-policy-eu-budget/
    So the imminent loss of British subsidy is already having a beneficial effect which may lead to a more level playing field for UK Agriculture.

  49. Andy
    February 22, 2018

    Here is a genuine question for you Mr Redwood – to which I would appreciate a genuine answer.

    I hate Brexit – I think it is awful for our country and our future. If I am wrong then all that happens is that we get richer and everything is fine.

    You are passionate about Brexit and think it is wonderful. What happens if you are wrong? What happens if, against your expectations, your critics are right and
    Brexit is a disaster. What then?

    Reply It wont be. The ERM was a disaster, and the Euro was a disaster averted for us

    1. NickC
      February 22, 2018

      Andy, I have not seen a single rational argument from you based on cited facts which supports your case that the EU is as wonderful as you imagine. There is simply no evidence that our sojourn in the EU has been economically beneficial to us.

      Our independence as a nation (remember Declaration 27) is worth paying for. But history tends to show that nations swallowed by empires are economic losers, as well as losers of independence. Actually I expect very little change to our wealth solely as a result of Brexit. So not rich; and not a disaster. But we will be independent.

      Your frantic cleaving to the EU is from my point of view quite funny: it appears merely as an emotional spasm, if not Stockholm syndrome. You may not want to hear that but “O wad some Pow’r the giftie gie us To see oursels as others see us!” is a valuable insight.

    2. fedupsoutherner
      February 22, 2018

      @Andy. Still, if the UK collapses at least you will be pleased Andy and you will be able to get the French Champagne out to celebrate. Sad or what?

      1. Andy
        February 22, 2018

        Why would I be pleased if the UK collapses?

        This is my country and I love my country.

        You make the mistake of confusing Brexit – voted for by 28% of the population – with Britain.

    3. Dennis Zoff
      February 22, 2018


      Your comment is valid and natural concerns understandable. I would even venture to say that some Leavers have the same concerns as you?

      The difference is that Leavers, such as myself, that work and live in both the UK and Europe, who admire Europe and it’s peoples (I am married to a German) and experience the EU’s workings first hand, are highly skeptical of the EU’s long-term ambitious motives that frankly resemble a regurgitated Soviet Union.

      Through many years of experience, working and speaking with Europeans across Europe, we have become fearful as to what the current EU is and seeks to become.

      One only has to scrutinize and initiate personal erudite research, examining the pros and “cons” of membership, which many on this blog have, to realise why we have chosen to leave this deplorable EU organisation?

      If we were to return to a real Common market, shorn of the expensive, empire building and unnecessary bureaucratic nonsense from Brussels most, I am sure, would probably wish to be part of a citizen-focused European endeavour, which is successful and that allows us to seek new ventures internationally, whilst keeping our very important sovereign rights.

      However, the EU today is not what you believe it is Andy, far from it!

    4. Andy
      February 22, 2018

      Sorry – that is lame answer.

      There are plenty of people who are at least as smart as you who think otherwise. If they are wrong they get egg on their face and that’s all.

      If you are wrong then MY CHILDREN grow up in a significantly poorer country with significantly fewer opportunities.

      So I ask again – what if you are wrong?

      PS: I don’t think my house will burn down tomorrow but I have an insurance policy incase I am wrong. What insurance policy do you have for my children’s future?

      1. Fedupsoutherner
        February 22, 2018

        Nobody has a crystal ball Andy but what will your children do if in all probability the EU implodes and we are still in. I am not convinced that the UK has done well in the EU since we joined. Other countries manage perfectly well and so can we. We were a great nation before the EU and we can be again. Have a little faith.

    5. Anonymous
      February 22, 2018

      And what if Andy’s wrong about how the EU is going to turn out ?

      Most voters in the referendum wanted out of the EU because it’s packed our country to the gunnels and attacked our national identity.

      The EU is a disaster zone which has caused many economic casualties.

      1. Andy
        February 22, 2018

        Your comment is telling.

        ‘Packed our country full to the gunnels.’

        In other words you voted because of immigration – as did many Brexiteers.

        So would you be happy with a Brexit deal which led to more immigration?

        Today we saw the figures. The number of (presumably mainly white) people coming from the EU way down.

        The number of (presumably mainly not white) people coming from elsewhere going up.

        This is what you voted for – right?

  50. Richard
    February 22, 2018

    The World Bank economic forecast argues that if the UK fails to secure a new trade deal with the EU, the UK’s (smaller) exports to the EU would drop by at most 2%. The UK’s exports to the EU are around 12% of UK GDP, so a 2% fall reduces GDP by c.0.25%.
    The World Bank’s study says the impact is small because the EU’s import demand for UK exports is fairly inelastic: (on page1) “ because the higher tariffs are placed on the less elastic products that the UK exports, while the lower tariffs are placed on the more elastic products that the UK exports”. This means that EU importers that will bear most of that £6Bn tariff.
    The UK should be far more nimble than the EU in doing Goods & Services trade deals with non-EU countries. Therefore, since the UK’s (£96Bn larger) goods imports are more elastic, the UK has greater scope for import substitution than does the EU.

    1. Richard
      February 22, 2018

      And on Services the UK should insist on a better deal than at present. Despite the UK’s strength in Services, our Services export surplus is a mere £14Bn due to widespread heavy protectionism by EU member states:

      EU businesses have much need for the cheap finance available wholesale from London. Plus London’s technical finance expertise. London (#1) is the EU’s only Financial Centre in the Top 10 according to the Global Financial Centres Index. Frankfurt makes #11, Paris is down at #26, and Dublin down at #30. http://uk.businessinsider.com/most-powerful-financial-centres-gfci-index-for-2017-2017-9/#20-shenzhen-the-chinese-city-climbed-two-places-to-reach-the-top-20-scoring-highly-in-the-infrastructure-category-1

  51. Mark Watson
    February 22, 2018

    Another angle would be to see if accession countries since 2000 have seen any boost from joining.

  52. G
    February 22, 2018

    This is a great piece of clear-eyed analysis, as usual.

    We have been reduced to a foreign-owned financial services region. A house built on sand.

    Now all the talk I hear about is science, and our desperate need to secure a deal with the EU on scientific collaboration. What deal? What need?

    I am a cynic perhaps, but when it comes to the EU, where they say collaboration I read infiltration.

    Scientific and applied scientific advances lead to intellectual property, and subsequent commercial exploitation. It would be ironic if European science grants, paid for with our own money, led to a funnelling of intellectual property back to EU ownership!

    I do not know if this is true, but please, please would you bring your exceptional knowledge, experience and expertise to shed some light on this subject?!

  53. Richard Taylor
    February 22, 2018

    I wrote this pre-referendum but then revised it slightly following a report in the last two weeks about a meeting between the Government and Japanese business. It was reported that Japanese companies would re-locate if their Brexit affected the profitability of their investment here in the UK.
    By some that is interpreted that they will pull out, as if it is a done deal.

    However, they may actually see their profits increase and below is a piece I did before the referendum which illustrates how this can happen, even with WTO terms and looking at the car industry.

    International Trade for Dummies.
    During the referendum discussions, the subject of international trade has often come up and many claims have been made by both sides. My experience of international trade is limited to a few product groups that I have worked in but the principles of the tariff system are the same unless distorted by artificial factors such as the Common Agricultural Policy. I have seen what I believe to be misleading assumptions from both sides, even from supposedly expert people and bodies.
    One of the points often made and presented as a fact is that if the UK were to leave the single market, the UK would be hit as the UK would lose access to a market of 500 million people. UK Car manufacturing has been identified as a key industry that would be hit. It has been suggested that tariffs would almost certainly be introduced and that is bound to hit our exports of UK made cars.
    So below I will examine this assertion going through a few simple points and calculations based on moving to a situation where the UK and EU introduce trade tariffs to cars following a Brexit.
    Firstly, excessive tariffs are not good for trade. But under WTO terms over recent decades tariffs have reduced gradually to their lowest levels, unless anti-dumping measures are in place or perhaps sanctions to apply pressure on rogue states. The UK, EU and RoW operate quite happily under the WTO regime for the majority of international trade and the trend is for continually lower tariff levels and inter-country trade deals to offer even lower barriers to international trade going forward.
    UK Car Manufacturing and our Imports and Exports
    Table 1 figures are 1st quarter 2016 and are from HMRC trade info figures for Chapter 87 Products (Vehicles). Amounts are £s Billions.
    Table 1
    EU Imports = 11.9 UK Exports to EU = 4.3
    RoW Imports = 2.3 UK Exports to RoW = 4.4
    UK Sales in UK = 2.6
    Ttl UK Market = 16.8 Ttl UK Manufactured = 11.3
    So Table 1 is the current state of affairs in Billions and these are the figures I’m going to use as a base for my example.
    Let’s assume we leave. How does that impact in these figures? Initially it won’t as the UK and EU will enter a period of negotiation to sort out the formalities. This is scheduled for two years but could take longer. So any effect is likely to be gradual rather than sudden.
    However, a time will come when we may have to accept a WTO tariff regime so let’s look at a WTO level 10% trade tariff on the trade in vehicles between EU and UK.
    A 10% tariff means that when a UK car is sold in to the EU a 10% import duty is charged at the EU border. That duty is payable by the importer (eg it could be Honda France if a Civic made in Swindon) and the duty collected goes to the EU, with the collecting nation retaining a small proportion to cover administration costs.
    The duty is calculated on the landed cost, which in basic terms is the manufacturer selling price + carriage.
    So again in simple terms, the EU forecourt price of UK manufactured cars will increase by 10%.
    That will have an impact on sales. How much is debatable and no one knows, but for this example I am assuming that for every 1% move in price there will be a 2% move in sales.
    So the 10% duty applied to the UK made cars would mean a drop of 20% in EU sales from the current £4.3 Billion to a figure of around £3.4 Billion. This is equivalent to about 8% of the total UK manufactured cars.
    In the EU people will still want cars and so the EU manufacturers and RoW manufacturers will pick up this £0.9 Billion of business and share it between them.
    That doesn’t look good. An 8% drop in UK manufacturing could put UK jobs at stake and jeopardise the viability of the plants here in the UK.
    However, there is a balancing effect of these duties.
    EU Cars coming in to the UK would also be subject to a 10% duty and would have a similar effect ie a drop of 20%. EU made car imports would fall from £11.9 Billion to £9.5 Billion. That’s a drop of £2.4 Billion and of course the UK would still need it’s cars and the £2.4 Billion would be split between UK and RoW Manufacturers.
    For example, assuming a 50/50 split then the UK would pick up £1.2 Billion of additional business here in the UK.
    In summary the UK could actually increase total sales by replacing the lost EU sales by even more sales in the UK market and from the current Table 1 base the UK would see an increase in UK Car sales and production by around £0.3 Billion. The biggest gainers would be the RoW who would pick up sales in both markets as they already have the 10% duty in place. The net losers would be the EU producers and that is because when tariffs are introduced they almost always hit the side with the trade surplus.
    Without trying to over complicate things though, there is another important factor and that is exchange rate.
    It’s perhaps fair to say that Sterling may drop against other international currencies after a vote to leave the EU. Don’t discount the Euro falling as well. Whilst international markets may see a UK leave as a concern, whether justified or not, they may also see it as a concern for the EU. So Sterling and the Euro may fall when compared to the US$ and Yen, the other main international currencies.
    But for this exercise let’s just keep it simple and look at Sterling and consider a 5% drop in the value of Sterling. After all, a drop in Sterling has been identified as one of the “risks” of leaving.
    What this would do is make imports 5% more expensive and exports 5% cheaper. So following the imposition of 10% tariffs a 5% drop in Sterling would:
    • Halve the effect of the 10% tariff on our sales to the EU to feel like 5%.
    • Exaggerate the effect of the tariff on the EU Sales in to the UK, making it feel like 15%.
    • Make the UK made cars 5% more competitive in RoW.
    • Make the RoW cars 5% more expensive in the UK.
    So the effect on the UK Car Manufacturers when faced with 10% duty and a 5% drop in the value of Sterling would give us a breakdown looking something like this.
    Table 2
    EU Imports = 8.6 UK Exports to EU = 3.7
    RoW Imports = 3.6 UK Exports to RoW = 4.8
    UK Sales in UK = 4.6
    Ttl UK Market = 16.8 Ttl UK Manufactured = 13.1
    So the UK loses £0.4B to the EU, but gains that back selling to RoW and gains £1.8B Net from the increase in the domestic market.
    Are you with me so far?
    Tariffs reduce trade both ways. The higher the rate, the greater the effect and it affects the party in trade surplus proportionately more.
    When a nations currency falls, its exports become cheaper and its imports become more expensive.
    These principles are irrefutable and I have applied them to the above established HMRC trade figures for 1st Quarter 2016 set out in Table 1.
    You may seek to discredit this by drawing attention to some of my assumptions such as for every 1% increase in tariff or price, there is a commensurate 2% drop in sales.
    Fair enough. But there will be a drop in sales. Whether it is 1%, 2%…. 5% it really doesn’t matter as all it does is increase or reduce the effect.
    The effect is still the same.
    My assumption that the RoW and UK made cars will split the loss of EU made sales 50/50 is of course open to challenge. Currently the UK sells £2.6B and the RoW £2.3B in the UK market and so you can see they are currently fairly even players and so a 50/50 share is a fair and realistic assumption. Faced with a more expensive Peugeot, buyers may opt for a Kia or a Yaris.
    Just one final point and that is about the actual import duty.
    Currently, duty on products entering the EU goes to the EU. If the UK decides to leave the EU and tariffs are applied between the UK and EU, then the EU will keep the duty on our exports to the EU and the UK Government will keep the duty on EU imports to the UK.
    (RoW duty is almost neutral as it is already there now)
    So let’s look at the effect of that.
    Based on Table 1, the current trade figures, the EU would receive £430 Million in duty and the UK would receive £1.19 Billion is duty ie 10% of the goods coming in to the respective market.
    That’s unrealistic though as if tariffs were imposed, Table 2 would be more reflective of the position. Table 2 figures would yield £370 Million to the EU and £860 Million to the UK.
    So there would be a flow of money from the EU to the UK HMRC in the region of £0.5 Billion per quarter or £2 Billion a year.
    Surprised? You shouldn’t be.
    Tariffs are used to protect the domestic supply base whether in goods or services. We’ve recently seen the discussion on steel and how using anti-dumping measures (short-term increases in duty) can and is being used to reduce the volume of steel coming in to the EU from RoW.
    So following a leave, any tariffs introduced will reduce the volume of trade going in each direction and if more is coming from one side, it will hit that side a little more.
    So to summarise, if the UK leaves the EU and we have trade tariffs on cars:
    • The UK Manufactured cars would likely see total worldwide sales rise.
    • A fall in the value of Sterling would further boost exports to EU and RoW.
    • The UK would see a net gain through duty receipts that could be as much as £2 Billion per year.
    • This illustration does not have any allowance for any improved trade to RoW as a result of new trade deals, which will further boost sale to RoW.
    What’s more, these principles apply to all 99 International Trade Chapters and are, in my opinion, a good reason why we shouldn’t be afraid of leaving the EU.
    Brexit could provide a real boost to our exports and prospects in world trade overall.
    Richard Taylor

  54. Peter D Gardner
    February 23, 2018

    More should be made of the WTO’s overarching policy aim: to reduce barriers to trade in all parts of the world.
    Were the EU to impose barriers unilaterally where none currently exist it would be running counter to the WTO’s raison d’etre.
    UK could invite the WTO to support UK’s case for free trade continuing and the EU would have great difficulty defending its imposts were UK to seek adjudication by the WTO.
    I suppose the problem, as in all areas of Brexit , is Mrs May’s hopeless lack of negotiating ability, lack of a vision, lack of any understanding of why people want self-determination and sovereignty.

  55. Richard
    February 28, 2018

    John, Would it be possible please to have a link to the report that supports the £16bn/ £6bn tariff estimates if it is openly available on the internet.
    The direction of change is interesting, compared to the Civitas report (2015 data):

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