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Brexit

As the government and shadow cabinet continues to publicly squabble over Brexit negotiations one can only wonder what on earth the rest of the world must be thinking. 

cabinet

Well now we know, thanks to US ambassador to Britain, Robert Johnson. Speaking about his observations on Brexit he said “…Brexit will be a huge success and I have no idea why the British are so defeatist about it…” Ambassador Johnson thinks Brexit is very similar to when American colonists sought independence from Britain, insofar that the colonists, at the time, were very much divided and the future looked uncertain.  However, secede they did and successful they became; crucially though, they remained close to Britain culturally, politically and economically and today America remains our closest friend and ally.  Summing up his confidence in Britain he said: “…Hold your nerve Britain.  I’ve seen what you can do and I know you’ll make a success of Brexit…” After all “…How can a country with this great a history, this great a language, this great a legal system and this great a presence not be successful…?”

US-Independence-Day 

He has a point. Up until the middle of the 20th Century Britain was the most powerful country in the world.  The British Empire was the largest in world history and during the 19th century Britain was the first country to industrialise and embrace free trade. This rapid industrial growth transformed Britain into the world’s largest industrial and financial power.  A blueprint much of the developed world went onto embrace.

 empire

You wouldn’t think that though, listening to many of the glass-half-empty remoaners who constantly reiterate scare stories in an attempt to weaken Brexit negotiations or to try and overturn the result of a democratic referendum.

 

Articles by the regions MEP’s urging we remain in the Single Market and Customs Union or risk economic Armageddon are classic examples of the short-sightedness and lack of belief in what economic opportunities lie outside of the EU. However, as they are MEP’s there is, perhaps, some self-interest.  One can’t really blame them wanting hang onto their jobs and their seats in the EU gravy train buffet car.

 

Just as we should take, with a pinch of salt, Europhile soothsayers of doom, so too the big business executives who talk of massive job cuts if we leave the EU. Frankly, most of these scare stories have more holes than a colander and it’s high time some of them were exposed for the mischief they are.  For example, Aircraft manufacturer, Airbus, recently threatened to quit the UK in the event of a no-deal Brexit. Why? Since 1980 there has been a WTO agreement on trade in civil aircraft and components making such trade tariff-free. Closer to home, Nissan has raised concerns over tariffs on cars. Given that the UK imports more cars from Europe than it sells, German motor giants BMW, VW and Mercedes are simply not going to let that happen. 

 

With this in mind, I am going to add some alternative observations and challenges to the more popular soundbites of project fear and let readers decide.

 

Free Trade?  We are regularly told that access to the EU single market is free. That’s like saying the NHS is free.  It’s not, according to the office of national statistics our net contribution to access EU markets, via membership, is £9.4bn a year or about £26m a day.

export-import

 Exports? Supporters claim that 55% of UK exports go to the EU.  However, a good chunk of this is goods destined for outside the EU being shipped via EU ports such as Rotterdam. The real figure is closer to 44% and declining.  Furthermore, after 40 years of membership, less than 5 per cent of UK companies directly export to the EU, yet all are forced to bear the burden of its regulations.

 

Jobs? The biggest threat to jobs is technology not Brexit.  The UK economy is 70% service based, while good for wealth is poor for jobs.  It’s estimated that by 2030 40% of jobs will be performed by robots and apps.

 

The Future? The EU is not the economic panacea remainers would have us all believe; while it appears sizable, in a global context it’s less impressive and is actually shrinking at an alarming rate; in 2011 the EU market represented 17% of the worlds trade, today it’s 15%, by 2030 it is predicted to be 12% and by 2060 a mere 9%.  An analysis of the world’s top ten economies today place just four EU countries, Germany, Britain, France and Italy respectfully.  By 2030 it is estimated Germany, Britain and France will all drop down a ranking and Italy going out of the top 10 altogether.

 

It is clear the future economic prospects of Britain lie outside the EU and as such, I believe, the country needs an economic Brexit deal that puts long term economic opportunities at its heart and lays the foundation for an economic strategy that will last for the next thirty years not just the next three and advantageous to all, not just the multinationals and the city.

 commonwealth

Perhaps we should look to forge closer links with the Commonwealth again as part of our long term economic strategy?  After all, the Commonwealth comprises of 53 countries, across all continents with a combined population of 2.3 billion people, (a third of the world’s population).  An economic opportunity indeed, no wonder the EU fears a strong Brexit.

paperThis article was first published in the Newcastle Journal on 5 July 2018