We must decouple from the European Union and not enter the backstop

The UK has lots of advantages and if they are used cleverly to decouple from the EU, as well as the new freedom in a good bilateral relationship, then the UK could develop very positively – I’m convinced of that.  Read here

Ueli Maurer Swiss Finance Minister FT 26 March 2017

We must decouple from the European Union

In 2016, we were faced with an extreme version of project fear. Such claims that if we broke from the European union's iron grip then we would indeed face dire consequences. Such consequences would immediately be felt by way of half a million job losses. But, another claim that has not come to fruition, which today has been swept under the carpet so to speak that is FDI “Foreign Direct Investment”, it was claimed that FDI would dry up plunging the UK into a form of Banana republic. 

Here we are in 2019, having enjoyed the best employment rates on record, jobs have grown significantly. Almost daily there is positive news, even this week a headline read that all job vacancies since the referendum have been filled by British Nationals. Now for the papers to print such a headline would be deemed racist, but, is it? How can it be, as the UK is already a cosmopolitan, eclectic mix. Nevertheless, the headline makes good reading, in part vindicates leaving the European Union's iron grip. Of course in addition the headline employment rate makes a compelling story also in support of vote leave.

Foreign Direct Investment "FDI"

Foreign Direct Investment “FDI” not only did it not dry up, investment  have quadrupled coming from across the world. But here's the catch and this should embarrass remainers: we have had record investment since the referendum! Last year our Foreign Investment was second only to China, passing the FDI into the USA. Bizarre as tbis will seem European Union conglomerates are placing investments in the UK looking for a better future. With such a raft of good news why do we still have these daily battles with remain and Theresa May? 

The Japanese perhaps were always seen as the biggest risk to our financial well-being. But, apart from headline grabbing statements exploited by the media this has been no more than an irritant played out to sell newspapers, metaphorically speaking. 

Yes it's true Japanese have over the years invested in the UK to access the European market, but tariffs are not the only reason the Japanese are here.  The UK has a great climate for manufacture which is interference free, a stable environment. Even with the Parliament shenaniggans this continues to be the case. 

The Japanese are not known for their astute interpretation of all things European. In the late 1990s they predicted with equal vigor gloom, despair, almost apocalyptic if we were to snub the Euro. Of course that was not the case. To continue with this "orchestrated" despair we hear noise from French conglomerates, German conglomerates such as BMW who all claim in somehow unison, they predict the worst for their businesses that are in the UK. Of course one assumes there was no political pressure brought to bear on them to make such statements. But, since we seem to be enjoying a boom period. Our economy has outperformed even the stellar German economy within the Eurozone, which we all know is heading for recession.

Free Trade Agreements

It is absurd to assume that we the UK would collapse as an economy even if we end up with a situation of paying tariffs to enter the European markets. This is simply not true! For one, we run a surplus, we sell to European Union two-thirds of our product to that of the European Union products sold to the UK, in real terms, per year we run a £90 Billion deficit. Seriously can Germany walk away from that. On a second point, there are 100s of countries who sell to the EU on WTO including the USA, weakening the argument further Japan also sells product from Japan into the EU with little or no issues. So why is WTO so onerous a prospect? Why do we assume that when entering on WTO we remain on WTO. Rationally, negotiating a Free Trade Agreement can this not be the adult way forward?

When you analyse the-remain argument there really is so little of substance to their points, apart from the term MY! It is always about them and not the collective. Their supply chains, their holidays, their future. Indeed, their arguments are so weak they always resort to insults, such as:

We are Xenophobic, little Englanders, low caste (if such a thing exists). All I can say to that is; many in a number of constituencies with large South Asian populations they delivered Leave votes, including Luton (56.5% Leave), Hillingdon (56.4% Leave), Slough (54.3% Leave) and Bradford (54.2% Leave). All have South Asian populations of 25% and above. It’s not unreasonable to think that such Leave votes could not have been delivered without a significant number of Asian voters opting for Brexit. Read here

The UK has lots of advantages and if they are used cleverly to decouple from the EU, as well as the new freedom in a good bilateral relationship, then the UK could develop very positively – I’m convinced of that.  Read here

Ueli Maurer Swiss Finance Minister FT 26 March 2017

We must decouple from the European Union

In 2016, we were faced with an extreme version of project fear. Such claims that if we broke from the European union's iron grip then we would indeed face dire consequences. Such consequences would immediately be felt by way of half a million job losses. But, another claim that has not come to fruition, which today has been swept under the carpet so to speak that is FDI “Foreign Direct Investment”, it was claimed that FDI would dry up plunging the UK into a form of Banana republic. 

Here we are in 2019, having enjoyed the best employment rates on record, jobs have grown significantly. Almost daily there is positive news, even this week a headline read that all job vacancies since the referendum have been filled by British Nationals. Now for the papers to print such a headline would be deemed racist, but, is it? How can it be, as the UK is already a cosmopolitan, eclectic mix. Nevertheless, the headline makes good reading, in part vindicates leaving the European Union's iron grip. Of course in addition the headline employment rate makes a compelling story also in support of vote leave.

Foreign Direct Investment "FDI"

Foreign Direct Investment “FDI” not only did it not dry up, investment  have quadrupled coming from across the world. But here's the catch and this should embarrass remainers: we have had record investment since the referendum! Last year our Foreign Investment was second only to China, passing the FDI into the USA. Bizarre as tbis will seem European Union conglomerates are placing investments in the UK looking for a better future. With such a raft of good news why do we still have these daily battles with remain and Theresa May? 

The Japanese perhaps were always seen as the biggest risk to our financial well-being. But, apart from headline grabbing statements exploited by the media this has been no more than an irritant played out to sell newspapers, metaphorically speaking. 

Yes it's true Japanese have over the years invested in the UK to access the European market, but tariffs are not the only reason the Japanese are here.  The UK has a great climate for manufacture which is interference free, a stable environment. Even with the Parliament shenaniggans this continues to be the case. 

The Japanese are not known for their astute interpretation of all things European. In the late 1990s they predicted with equal vigor gloom, despair, almost apocalyptic if we were to snub the Euro. Of course that was not the case. To continue with this "orchestrated" despair we hear noise from French conglomerates, German conglomerates such as BMW who all claim in somehow unison, they predict the worst for their businesses that are in the UK. Of course one assumes there was no political pressure brought to bear on them to make such statements. But, since we seem to be enjoying a boom period. Our economy has outperformed even the stellar German economy within the Eurozone, which we all know is heading for recession.

Free Trade Agreements

It is absurd to assume that we the UK would collapse as an economy even if we end up with a situation of paying tariffs to enter the European markets. This is simply not true! For one, we run a surplus, we sell to European Union two-thirds of our product to that of the European Union products sold to the UK, in real terms, per year we run a £90 Billion deficit. Seriously can Germany walk away from that. On a second point, there are 100s of countries who sell to the EU on WTO including the USA, weakening the argument further Japan also sells product from Japan into the EU with little or no issues. So why is WTO so onerous a prospect? Why do we assume that when entering on WTO we remain on WTO. Rationally, negotiating a Free Trade Agreement can this not be the adult way forward?

When you analyse the-remain argument there really is so little of substance to their points, apart from the term MY! It is always about them and not the collective. Their supply chains, their holidays, their future. Indeed, their arguments are so weak they always resort to insults, such as:

We are Xenophobic, little Englanders, low caste (if such a thing exists). All I can say to that is; many in a number of constituencies with large South Asian populations they delivered Leave votes, including Luton (56.5% Leave), Hillingdon (56.4% Leave), Slough (54.3% Leave) and Bradford (54.2% Leave). All have South Asian populations of 25% and above. It’s not unreasonable to think that such Leave votes could not have been delivered without a significant number of Asian voters opting for Brexit. Read here

Brexit disjointed

Brexit - Our Food is Expensive Benefits Who?

Owen Paterson, formerly Secretary of State for Environment, Food and Rural Affairs, has estimated that when the UK withdraws from the CAP, the price of food to UK consumers will drop by about 7%, thereby adding to their real incomes.

The UK has been and will continue to be a net loser under the rules of CAP, ‘Common Agricultural Policy’. The European Union applies tariffs to imported food and subsidizes farmers such that price in the shops are artificially high.  Some tariffs on Dairy products are as high as 50%, the average sits at 35%. Other tariffs, sugar as an example there is a 25% tariff, cereals 15%. This is a burden on our weekly shopping bill, hence, why Owen Patterson claimed our weekly shopping bill will reduce by 7%.

However, by leaving the EU, opening the door to imports we will impact our home farmers.  Some level of debate will be needed to assist farmers to expand new ways of land use, perhaps environmental and tourism, this would require some form of public subsidy in the short term.  Regardless, support will be needed much as there was support prior to our entry to the Common Market back in 1973.

It's important to bear in mind two points 1. Farming in the UK generates only 1% of our GDP, manufacturing provides for 10%.  2. If you look to the other countries for examples then you quickly see that New Zealand were faced with a similar dilemma in 1985, tariffs were removed brining competition to an already desperate wine industry. Prior to 1985 New Zealand had a wine industry that only had an internal market.  The reason for this can be explained by a quote from Sir Lockwood Smith, former NZ High Commissioner to the UK, he referred to their wine industry, he likened it to drinking battery acid.  Today 30 years after the abolition of the tariff New Zealand has a vast international market and is respected for producing excellent wines.

When we are able to free ourselves from excessive EU regulations particularly around concerns for health, safety and environment, all of which do little for any of those three points they only add to the protectionist nature of the EU.

Since 1992, the EU has approved 2404 experimental GM field trials for research. In comparison, over the same time there have been 18,381 GM trials for research in the USA. In crops for commercial use, there is only one GM crop, an insect resistant maize variety, that is grown commercially in the EU and no GM crops have yet been approved for human consumption as fresh fruit or vegetable. In comparison, there have been 117 commercial releases in the USA since 1992 and in other countries outside Europe.

Source: Royal Society

GM is a controversial subject, many will see the EU as standing up for values but there are many studies that show the risks as limited. To not embrace GM in some regulated fashion severely handicaps the EU, particularly as global population increase. Currently the status quo protects a few interested parties, producer's at the expense of the consumer. We must open our minds and remove the shackles if for no other reason the family budgets are stretched way beyond the point where life is enjoyable.

There will be considerable adjustment required within the farming community, some may find it painful. But in the medium to long term they too will benefit should they make the adjustment alongside government policies. Just as the New Zealand wine producers did.

Owen Paterson, formerly Secretary of State for Environment, Food and Rural Affairs, has estimated that when the UK withdraws from the CAP, the price of food to UK consumers will drop by about 7%, thereby adding to their real incomes.

The UK has been and will continue to be a net loser under the rules of CAP, ‘Common Agricultural Policy’. The European Union applies tariffs to imported food and subsidizes farmers such that price in the shops are artificially high.  Some tariffs on Dairy products are as high as 50%, the average sits at 35%. Other tariffs, sugar as an example there is a 25% tariff, cereals 15%. This is a burden on our weekly shopping bill, hence, why Owen Patterson claimed our weekly shopping bill will reduce by 7%.

However, by leaving the EU, opening the door to imports we will impact our home farmers.  Some level of debate will be needed to assist farmers to expand new ways of land use, perhaps environmental and tourism, this would require some form of public subsidy in the short term.  Regardless, support will be needed much as there was support prior to our entry to the Common Market back in 1973.

It's important to bear in mind two points 1. Farming in the UK generates only 1% of our GDP, manufacturing provides for 10%.  2. If you look to the other countries for examples then you quickly see that New Zealand were faced with a similar dilemma in 1985, tariffs were removed brining competition to an already desperate wine industry. Prior to 1985 New Zealand had a wine industry that only had an internal market.  The reason for this can be explained by a quote from Sir Lockwood Smith, former NZ High Commissioner to the UK, he referred to their wine industry, he likened it to drinking battery acid.  Today 30 years after the abolition of the tariff New Zealand has a vast international market and is respected for producing excellent wines.

When we are able to free ourselves from excessive EU regulations particularly around concerns for health, safety and environment, all of which do little for any of those three points they only add to the protectionist nature of the EU.

Since 1992, the EU has approved 2404 experimental GM field trials for research. In comparison, over the same time there have been 18,381 GM trials for research in the USA. In crops for commercial use, there is only one GM crop, an insect resistant maize variety, that is grown commercially in the EU and no GM crops have yet been approved for human consumption as fresh fruit or vegetable. In comparison, there have been 117 commercial releases in the USA since 1992 and in other countries outside Europe.

Source: Royal Society

GM is a controversial subject, many will see the EU as standing up for values but there are many studies that show the risks as limited. To not embrace GM in some regulated fashion severely handicaps the EU, particularly as global population increase. Currently the status quo protects a few interested parties, producer's at the expense of the consumer. We must open our minds and remove the shackles if for no other reason the family budgets are stretched way beyond the point where life is enjoyable.

There will be considerable adjustment required within the farming community, some may find it painful. But in the medium to long term they too will benefit should they make the adjustment alongside government policies. Just as the New Zealand wine producers did.