Jeremy Hunt has said on behalf of the government that we can handle a WTO exit next March. The whole government needs to spend the next three motnhs preparing well, sorting out the remaining issues quickly. It needs to provide an upbeat commentary about all the things it has  done to ensure a smooth transition when we leave. The government assures us it has been preparing for 2.5 years so far, and must by now have done most of the work. We know that the ports will operate well and that the planes will fly.

Still the lies flow from those who want to reverse the decision of the referendum on the media. They are now arguing all over again that we will not be able to export food once we leave the EU. If the EU does impose high tariffs on UK food exports – one of the few areas they could do so as there are some high tariffs on non EU food at the moment – the UK will clearly switch some production from export to the EU to domestic consumption. Our own  market would be better protected from EU imports by our also imposing similar tariffs. We should at the same time lower the average tariff we impose on food to encourage non EU countries to buy more of our food by encouraging  mutual reduction of tariff barriers and to make imported food from the non EU which we cannot produce for ourselves cheaper.  The scare stories usually fail to understand two crucial things. We will decide how high a  tariff if any to place on imports. The EU cannot impose a higher tariff on our exports to them than it imposes on any other WTO country. The EU currently has low average tariffs of around 3%, with no tariffs at all on half the trade. The pound has fallen by more than 3% against the Euro so overall there is no loss of competitiveness if they do impose some tariffs.

The government is over reacting to stories of friction at our borders once we leave. It is busy encouraging stockpiles of medicines for no good reason. It has confirmed there are  no continental companies cancelling contracts to supply after March 29. There are no UK plans to delay the drugs for longer at the ports. Were there to be any extra delays then the supplying companies would just have to send them a bit earlier, as they have to today if there are strikes or crashes affecting continental roads .  There is plenty of container capacity should there be Ro Ro problems ,but Calais is busy fitting out its port to handle customs to ensure it keeps the business after we leave.

The so called non tariff barriers to trade include VAT, Excise and company tax. These frictions we already handle at our borders with the rest of the EU as we have different rates and incidence of these taxes. They include inspections of food and goods quality and safety. Most of these checks are done away from the border. The exporting company tests the product at the factory and supplies the test details on the electronic record of the consignment. The importing company may check again on delivery. Customs and national safety authorities can spot check consignments to ensure it is as recorded, usually on suspicion from investigation or tip off. None of this need cause new extra delays at ports. If we can handle the complexities of VAT and Excise today why is a tariff tax more difficult?

What is so depressing is how remorselessly negative the media and many of their chosen interviewees are. It as if we were never able today to import or export anything outside the EU, and as if governments were incapable of finding an easy way of lifting more money off companies in the form of extra customs dues if we leave and some tariffs are imposed. There are strict limits to how much power the EU has over trading companies, and there are international and EU Treaty obligations on the EU itself to promote and encourage a good trade with non EU neighbouring states. Some Remain supporters seem to think that the EU is evil in intent and will be a lawbreaker just to be difficult.

Day after day I hear scare stories on the media that the UK car industry may suffer  if some undefined friction were created at our ports impeding the inflow of components after we have left the EU. I have proposed no tariffs on any parts coming in, so there would be less friction on non EU parts than today, and the government may well adopt such a proposal. They have certainly not ruled it out. No-one has yet explained why we will mess up our ports in ways which delay deliveries to car plants. Just in Time systems anyway flex according to how far the components come and the journey conditions they experience in the regular course of business.

What I do not hear is analysis and concern about the very real damage being done to our car industry whilst we remain full members of the EU. The collapse in car sales since the Spring of 2017 has nothing to do with Brexit and everything to do with the high Vehicle Excise Duties, the tax and other regulatory attacks  on diesel cars, and the tough guidance to banks to cut down the car loans imposed by the UK authorities. As a result car sales have fallen by almost one quarter, and car sales by Jaguar Land Rover have been hit much harder given the high proportion of expensive cars and of diesels in their mix.

Why doesn’t the media take up these unhelpful policies, and make more of them than the silly scare stories about why might  happen if we just leave the EU?

It would also be good to have more informed comment and discussion of a real economic problem worldwide, rather than the false worries about Brexit. The rest of the world is talking about the general move to slow money and credit growth in the USA, the Eurozone and China as well as in the UK. Car sales are very dependent on  credit and get hurt early on when rates rises or when cash is restricted in banking systems. Car sales in China fell heavily last month. US car sales peaked earlier this year and are also in decline. The German car industry got hit badly this autumn. It was largely attributed to changes in EU regulations delaying certification and sales of new vehicles, but it is probably also about the turning of the credit cycle and the decline in underlying demand in the world car market.

I have often said that whilst Brexit is a very important political and democratic event for the UK, it is unlikely to have much impact on the world economy, and will have just a modest positive impact on the UK economy once we leave if the government follows sensible policies. We should try to prevent endless scare stories and the Groundhog day coverage that is the current UK media from stifling debate on the things that do have an economic impact. The media should  be expressing some alarm about what monetary tightening is now doing to the world car industry. There is no obvious inflation threat in the advanced world, and clear signs of economic slowdown.

The Prime Minister needs to understand that her Agreement cannot pass the Commons. All the Opposition parties oppose it. The DUP hate it. Around 100 Conservative MPs have stated in public they do not agree with it.

A substantial number of those MPs might change their vote on the Agreement if the Northern Ireland backstop were removed completely, or if there was an unambiguous and straightforward way for the UK to end it unilaterally once imposed. Whilst the vote on  the Agreement would then be narrower, there would still be a substantial group of Conservative MPs who would oppose the Agreement for wider reasons often set out here.  The Prime Minister ignores these other problems – the large sum of money committed for nothing, the indeterminate period left in the customs union, the vulnerability of our economy to new laws and regulations that could hurt us – all summed up as the opposite of the Leave we voted for.  She assumes she could get practically every DUP and Conservative MP to change their minds.

She also assumed in the Confidence Vote meeting that  the EU will offer some legally binding text which does scupper the Backstop. That looks extremely unlikely, given the stance of the EU so far. If we assume they are not bluffing when they say they will not re open the Withdrawal Agreement text it is difficult to see any reassurance or political declaration about the Backstop persuading the DUP and other critics, as what matters is the law as written rather than statements of how a future EU might behave. One of the problems with that is the imminent European Parliament elections and a new Commission, so what is the value of any promises by the current set up?

I have the following questions for the PM

What legal text have you tabled to remove the Backstop? Will you share it with us as we might agree with it?

What indications if any are there that the EU will moderate its stance and resume talks about legal change to the Backstop part of the Agreement?

If there is no new text and no prospect of talks to change this draft law, how do you envisage getting the DUP back on board to support the government?

If the DUP remain largely detached, how can the government proceed with its wider programme of work?

What action if any are you taking to deal with the other large  problems with the Agreement as around 400 MPs see it?

If there are  no good answers to these questions, then the PM should come to the Commons and announce that unf0rtunately the Agreement cannot be fixed so she is withdrawing it. She should then return to the EU and discuss the best way to proceed to exit, with accelerated work on the various agreements it would be nice to have to make it easier for both sides.  She should finally get round to tabling a Canada style free trade agreement and set out again how the Northern Ireland/Republic of Ireland border can be handled much as now. This present currency, Excise, VAT and anti terrorist border could also be a customs and regulatory border, with most of the checks done well away from the border and the information shared electronically in advance of the border crossing. Managed exit without a Withdrawal Agreement is what most Leave voters want, given the penal and one sided nature of the Withdrawal Agreement.

Since I wrote this piece it has become clear that the EU is not in the business of re-opening the Agreement at all. They have also moved away from offering more formal reassurances which seemed to be on offer in draft. Instead  more of them saying the disagreement between the Commons and the Prime Minister on the Agreement is another reason to need the backstop insurance. The Prime Minister has changed her language back to reassurances from legal  changes.

It is difficult to see the  DUP coming back on b0ard given the lack of any legal text to remove the  backstop. Were there to be a change of heart by the EU in the new year on this matter, there are still considerably  more Conservative MPs than the government  majority with the DUP  who oppose the Agreement for a wide range of reasons including sending them too much money, delaying our exit without a clear end date, and putting us under EU rules for an indeterminate period with no vote or voice on what new burdens and requirements they might impose.

On Wednesday Mrs May gained 63% support from Conservative MPs, or as Jacob Rees Mogg points out lost the support of around 70% of all those MPs who do not have some job granted to them by her. This assumes all those who express public loyalty to her in office voted accordingly. I imagine most of them did. Most of those who could not do so have already resigned.

Earlier in the day it appeared that her team was worried about the vote. She therefore changed her position on two important matters. She told us she no longer planned to lead the party into the next General election, assuming that is in 2022. There were various MPs prepared for her to carry on for a bit longer who were nonetheless saying they wanted a new leader for the election . She also told us she was returning again to the continent to seek legal changes to the Irish backstop arrangement. This was different from previous language, when in line with the EU she was talking about gaining clarifications and reassurances without changing the text of the Withdrawal Agreement.

She did not clarify if she would lead the Conservatives were there to be an earlier election. Nor did she clarify what kind of legal change she was seeking or how she will persuade the EU to re open the text of the Withdrawal Agreement. She also has said that any re opening could re open features of the Agreement like Gibraltar and fishing that some in the EU want to make worse from the UK point of view, so it is an option with risks.

What difference does this make? It has revealed to the  government and public that there are 117 Conservative MPs who lack confidence in the PM, which is largely related to their opposition to the Withdrawal Agreement she has made her own. It is therefore difficult to see how Mrs May can present her Agreement to the Commons and secure support for it. She says she plans to get a change to the Irish backstop. The first test of any new words forthcoming from the EU will be the reaction of the DUP. If the DUP do not accept the revisions as sufficient to banish the Irish backstop, the government will remain with no reliable majority, subject to endless alarms over trying to sustain its position in Commons votes. The DUP have always made clear the whole backstop has to go. Many Conservatives want it out or want a clear legal ability of the UK to cancel it unilaterally, which of course means it is not then the kind of backstop the EU insists on. The significance of the backstop is it would treat Northern Ireland differently from the rest of the UK, and would create a border between Northern Ireland and the rest of the UK. I and others have made clear our opposition to the backstop, but also to several other important features of the Agreement. Even if they could delete the backstop I would still oppose the Agreement.

The Prime Minister needs to rebuild her support amongst Conservative and DUP MPs as an urgent priority. Winning the confidence vote is only a first step. She now has to adopt an EU policy that can command support within her coalition, which the current Agreement lamentably fails to do. Any attempt to find a way of harnessing Labour votes to offset the large slice of Conservative and DUP votes she does not command on this issue is likely to be a fruitless quest, given Labour’s understandable wish to have a General election and unwillingness to name a particular proposal for exit that they can unite to support. Any attempt to woo Labour would also increase the numbers of Conservative MPs who oppose the Prime Minister.

One of the sillier Project Fear scares has been that if we just leave the EU there will be no agreements in place to allow planes to fly to and from the EU  and the UK.

The Transport Secretary has recently reported that  the UK has now concluded all of the third country aviation agreements needed with non EU countries, save four small countries still to  be completed.  Those agreed include the USA, Canada, Switzerland and Israel.

Within the EU the Commission has made clear that in all circumstances including a so called No deal exit there will be an agreement between the UK and EU after Brexit allowing routine aviation to continue as before between the UK and EU.

Individual member states have also expressed a willingness to  put in place any arrangements needed to ensure continuation of air services.

As I have pointed out, leading UK and continental airlines are busy selling tickets for after March29 2019, and have every reason to suppose they will  be able to honour those contracts. People can book their business trips and holidays as normal, and expect the planes to fly subject only to the usual things that might delay or lead to flight cancellations which have nothing to do with Brexit.

Some Remain supporters have been worried that somehow it will be more difficult to travel, to visit the continent, to share cultural events or enjoy each other’s facilities and places of interest. There are no grounds to suppose there will be new restrictions. There were no visas required before we joined the EU, and none are likely to be imposed once we leave. Were the continent to refuse to recognise UK driving licences the Post Office will be able to issue acceptable international permits for £10.

Why doesn’t the BBC, keen to highlight every move of sterling as being about Brexit, tell us that the FTSE 100 is up 2.3% since 6 December, presumably because of Brexit, as they think everything else is a reaction to Brexit.

Voters were told we would make the decision on leave or stay. We were told it was a once in a generation opportunity to make this decision. This was all in the government leaflet and in the Hansard record of the Referendum Bill debates. So any second referendum would be a clear violation of past promises, bad for trust in government and politics. No-one thinks the establishment would give a second thought to a second referendum if they had won for Remain. They would have been biting and scornful in turning down any such requests from unhappy Leavers. Many of us would have accepted the result as we did for the prior one we lost where we did not ask for another for the first 20 years or so. It was only when the so called Common Market people voted for had visibly morphed into a monetary union with a planned political union on top that we sought a referendum on this fundamental change of character in the EU.

The most likely outcome of a second referendum is another win for Leave, which would presumably do nothing to appease those who lost last time and now demand another go. Were the second to narrowly reverse the first, then Leave would rightly feel cheated and would ask for best of 3.

Campaigners say we need to vote now we know the terms of exit. The truth is of course we do not have a clue what the terms of an agreed exit will be, and might not know them for 2 or 4 years were something like the Withdrawal Agreement to resurface or were there to be a delay for more talks.

Second voters also cannot agree the question to put. It is insulting to put the same question again, telling 34 million people they did not know what they were doing last time and they have to have another go.
Justine Greening and others propose a three way question – do you want to just leave, or to remain, or to have a negotiated exit. What is the third one? How can this bring the country back together again, when the winning proposal may only have 34% support? That would be a huge invitation for continued unhappiness and more debate over what a three way vote actually meant, and why the majority was thwarted.

Some say they want a vote between some negotiated agreement and remain. That means most Leave voters are disenfranchised because our preferred model is left off. Some say lets have a contest between a negotiated departure and no deal. That is the least offensive one. It is a new question. It cannot take place before there is an agreed option. It would annoy Remain enthusiasts as their option is not on the table, so it is difficult to see the point of it. Meanwhile the law says we leave on 29 March whilst Remain MPs are still trying to thwart Brexit.

I will be writing soon about how this is our best way forward. It is not “crashing out” but cashing in, as we will keep the money the EU wanted to extract via the Withdrawal Agreement.