Brexit - The Grim Reaper Has Come Knocking

The benefits of EU and Single Market membership have been illusory, while its costs are real, onerous and unacceptable to the majority of the British people.

Michael Burrage 2017

To remain in the single market the UK must apply all regulations and controls as defined by the EU to its entire economy. So where is the problem? The problem is, only 12% of our total GDP goes direct to the EU, the rest we export to countries outside of the EU. The anomaly in all of this; even from the 12%, approx. 2% travels to Rotterdam or Antwerp for further export leaving the EU. Therefore, you could argue 90% of our GDP carries a burden of EU regulations that are not necessary. This is costly to UK businesses.

Consider rules and regulations governing employment law. Nearly all of our GDP comes from the domestic market: Whether it is health and welfare services, the retail trade, utilities, entertainment, bars and restaurants, services such as dry cleaning and home repairs and maintenance.

The rules and regulations are having and have had a serious impact. Particularly affected by this are the NHS. The EU issued a working hour directive in 2009, limiting the hours a person can work, to 48 hours a week. They must have designated rest periods and regular breaks. Therefore, and as an example, Junior Doctors are restricted as to the number of hours they can work. I can hear you say, so they should be they seem worked to death, but consider that as a Junior doctor you must attain certain skills and experience in order to progress. Individuals are taking much longer to reach the level required, to be proficient, let alone to attain “Consultant” status.  This has a serious impact on staffing levels.  Experience is low, a reduced numbers of Consultants able to practise. This issue is right across the NHS. This is not what a junior Doctor wants when entering this career / vocation.

These rules and regulations apply right across the service sector. A sector that the ‘single market’ has no benefit. It only applies an onerous cost, as Michael Burrage claims refer in the snippet above. 

Membership of the single market is not the same as the customs union. The customs union has been around since the very beginning of the EU, whereas the single market only since 1993. lt is the customs union that decides our tariffs. Within the custom union there are three (3) elements. 

1. Members may not impose tariffs or non-tariff barriers on imports from other member states; 
2. They do, however, impose the centrally agreed tariff rates on imports from the rest of the world, the so-called Common External Tariff (CET); 
3. They give up the ability to negotiate trade relationships with other countries. This power is transferred to the EU. 

Where Theresa May has come unstuck with the negotiation:

1. She wants tariff free trade with the EU whilst not applying tariffs on product and services brought into the UK from the rest of the world. Hence, the cake and eat it scenario. 
2. The election, the result weakened her hand considerably. Although in many ways it should not have done, 80% of the votes were won on a Brexit manifesto.

To achieve 1 above this was always a tall order, a modicum of compromise was always inevitable. But to find ourselves in the situation we are today well, that is due to dishonesty on the part of MPs that have obfuscated beyond their mandate.

For the EU to agree to 1 above this would result in the rest of the world driving their exports to the EU via the UK, therefore avoiding the CET. This would be folly on the part of the EU, not least for the loss of revenue. Of course advocates of the Customs Union are keen we remain a member. But again there are no intrinsic benefits to our membership. Food, clothing and footwear would still have considerable tariffs applied, and of course we would not be able to strike free trade deals from around the world. As I've said before the EU take less of our exports at a time when WTO countries trade has grown substantially. 

Not to make light of the tariffs more to show the bizarre way in which they are applied. Unicycles have a 15% tariff applied, whereby a sub orbital spacecraft has only a 4% levy. Food and beverages are subject to considerably more. Confectionery has a tariff just shy of 30%, some dairy products that's around 50%, Grapes 17% and frozen prawns 20%. If you research the tariff regime it's clear there is no logic to this and nor can anyone explain the rational, it is purely arbitrary. 

I'll leave this blog here. I continue to hope we follow through and free ourselves from these shackles. 

As Margaret Thatcher said:

The benefits of EU and Single Market membership have been illusory, while its costs are real, onerous and unacceptable to the majority of the British people.

Michael Burrage 2017

To remain in the single market the UK must apply all regulations and controls as defined by the EU to its entire economy. So where is the problem? The problem is, only 12% of our total GDP goes direct to the EU, the rest we export to countries outside of the EU. The anomaly in all of this; even from the 12%, approx. 2% travels to Rotterdam or Antwerp for further export leaving the EU. Therefore, you could argue 90% of our GDP carries a burden of EU regulations that are not necessary. This is costly to UK businesses.

Consider rules and regulations governing employment law. Nearly all of our GDP comes from the domestic market: Whether it is health and welfare services, the retail trade, utilities, entertainment, bars and restaurants, services such as dry cleaning and home repairs and maintenance.

The rules and regulations are having and have had a serious impact. Particularly affected by this are the NHS. The EU issued a working hour directive in 2009, limiting the hours a person can work, to 48 hours a week. They must have designated rest periods and regular breaks. Therefore, and as an example, Junior Doctors are restricted as to the number of hours they can work. I can hear you say, so they should be they seem worked to death, but consider that as a Junior doctor you must attain certain skills and experience in order to progress. Individuals are taking much longer to reach the level required, to be proficient, let alone to attain “Consultant” status.  This has a serious impact on staffing levels.  Experience is low, a reduced numbers of Consultants able to practise. This issue is right across the NHS. This is not what a junior Doctor wants when entering this career / vocation.

These rules and regulations apply right across the service sector. A sector that the ‘single market’ has no benefit. It only applies an onerous cost, as Michael Burrage claims refer in the snippet above. 

Membership of the single market is not the same as the customs union. The customs union has been around since the very beginning of the EU, whereas the single market only since 1993. lt is the customs union that decides our tariffs. Within the custom union there are three (3) elements. 

1. Members may not impose tariffs or non-tariff barriers on imports from other member states; 
2. They do, however, impose the centrally agreed tariff rates on imports from the rest of the world, the so-called Common External Tariff (CET); 
3. They give up the ability to negotiate trade relationships with other countries. This power is transferred to the EU. 

Where Theresa May has come unstuck with the negotiation:

1. She wants tariff free trade with the EU whilst not applying tariffs on product and services brought into the UK from the rest of the world. Hence, the cake and eat it scenario. 
2. The election, the result weakened her hand considerably. Although in many ways it should not have done, 80% of the votes were won on a Brexit manifesto.

To achieve 1 above this was always a tall order, a modicum of compromise was always inevitable. But to find ourselves in the situation we are today well, that is due to dishonesty on the part of MPs that have obfuscated beyond their mandate.

For the EU to agree to 1 above this would result in the rest of the world driving their exports to the EU via the UK, therefore avoiding the CET. This would be folly on the part of the EU, not least for the loss of revenue. Of course advocates of the Customs Union are keen we remain a member. But again there are no intrinsic benefits to our membership. Food, clothing and footwear would still have considerable tariffs applied, and of course we would not be able to strike free trade deals from around the world. As I've said before the EU take less of our exports at a time when WTO countries trade has grown substantially. 

Not to make light of the tariffs more to show the bizarre way in which they are applied. Unicycles have a 15% tariff applied, whereby a sub orbital spacecraft has only a 4% levy. Food and beverages are subject to considerably more. Confectionery has a tariff just shy of 30%, some dairy products that's around 50%, Grapes 17% and frozen prawns 20%. If you research the tariff regime it's clear there is no logic to this and nor can anyone explain the rational, it is purely arbitrary. 

I'll leave this blog here. I continue to hope we follow through and free ourselves from these shackles. 

As Margaret Thatcher said:

Myth and Paradox of the Single Market

Attached is a link to an excellent document put together by Michael Burrage of Civitas. It is an expose of the single market and the limited value, to be kind that membership offers. 

Myth and Paradox of 

the Single Market

How the trade benefits of EU membership 

have been mis-sold

Michael Burrage

Link to: Single Market Exposé

Part One: The Myth of the Single Market’s Trade Benefits

1. A doubling of trade? A minister’s claim to parliament 8

2. Reviewing the evidence 15

3. What business told, and didn’t tell, the Foreign Office 34

Part Two: The Paradox of Who Benefits from the Single Market

4. What would have happened

in the absence of the Single Market? 64

5. Is there a single market in services? 89

6. Does ‘helping to make the rules’

in Brussels help UK exports? 103

Part Three: Conclusions

7. Image without substance 114

8. The case for an EU research agency in the UK 125

Appendices

A: BIS reply to the author’s FOI request 134

B: A 2007 report by EC staff

on the impact of the Internal Market 138

The remainers paint the leavers as liars, thieves and vagabonds.  Consider just a few points below and then ponder over the insistence that we must be part of the Single Market.

From the beginning (a fairy tale this is not). Early 70s until 2015 there are just 37 FTA agreements that the EU have negotiated with small countries, in some cases collections of countries. This brings the total to 55 as of 2017. The total GDP of these countries is just $7.7trn.

In 2011 A report was produced by the Department for Business, Innovation and skills (BIS). This report was seized upon, misinterpreted forming astonishing results which have proved to be untrue. The Minister of state took the now fabricated version of this report and informed Parliament. He claimed that: ‘

• EU countries trade twice as much with each other as they would do in the absence of the Single Market programme’.

Under the freedom of information act the report was eventually published. Upon examination, it was shown that this claim was a lie. 

• Sir Edward Jonathan Davey MP FRSA is a British Liberal Democrat politician. He has been the Member of Parliament for Kingston and Surbiton since the 2017 general election, having previously been MP for the constituency from 1997 to 2015.

There were no such findings, there was no such research to prove this theory out. In fact the report was based on a report produced in 2007 by three French Academics. This report was taken compiled together with an EU report which was an attempt to find failings with the single market, to prove a case for more integration and central control.

With the upcoming release of the document the Minister perhaps sensing a discomfort added further reports, produced after his claims. In a vain hope to recover his now tattered image these reports were: 

1. An internal report the department had published, but this showed no reliable evidence on the benefits of the Single Market.
2. A Review of the Balance of Competence between the UK and the EU, which was conducted by the Foreign Office. Inclusive of claims by the bastion of impartiality the CBI, TheCityUK and various trade federations and businesses. They each claimed that UK exporters have benefited by ceding responsibility for trade negotiations to the EC.

No report cited any evidence which supported the Minister's claim, clearly he misled the house.

To come to the 55 trade agreements now in place with various small countries and collections of countries. In total a GDP of$7.7trn.  Michael Burrage of Civitas compares here with those negotiated by Chile, Korea, Singapore and Switzerland, four independent countries which have none of the ‘heft’ or ‘clout’ or ‘negotiating leverage’ which the CBI and many businesses consider essential in trade negotiations. 

The conclusions are:

• By contrast the aggregate GDP of all the countries with which Chile had agreements in force is $58.3tn, Korea’s totalled $40.8tn, Singapore’s $38.7tn and Switzerland’s $39.8tn. However, the agreements of these four countries include their agreements with the EU, which has a GDP of $16.7tn.

• About 90 per cent of the agreements of these four smaller, independent countries include services, whereas only 68 per cent of the EC’s trade agreements do so.

• The EC has therefore opened services markets of just $4.8tn to UK exporters, whereas the Swiss have opened markets of $35tn, the Singaporeans of $37.2tn, the Koreans of $40tn and Chileans of $55.4tn. However, we do not know if the EC agreements secured better terms than these independent countries, since the scope of these agreements has never been compared in detail.

• Analysis of the growth of UK exports of goods before and after EC agreements have come into force, for at least five years, shows that in most cases (10 out of 15) the post-agreement growth of UK exports has fallen. The five countries where the post-agreement growth of UK exports rose were Turkey, Chile, Lebanon, Papua New Guinea and Fiji. These therefore are the clear success stories of 42 years of EC negotiation on the UK’s behalf. Their total GDP in 2015 was $1.1tn, which is significantly less than the $1.5tn GDP of Australia with which the EC has yet to negotiate an agreement.

• By contrast most of Switzerland’s agreements (11 out of 15), most of Singapore’s (eight out of 12) and most of Korea’s (four out of five) have been followed by an increase in the rate of growth of their exports to the partner countries. Most Chilean agreements (13 out of 18) have been followed by a decline in the growth of their exports, though they differ from the British in that most of their pre-agreement rates of growth to these 13 countries were unsustainably high.

As you see the obfuscation dates way back, clearly indicating considerable vested interests which are not inline with the UK's or its subjects vested interests.

Attached is a link to an excellent document put together by Michael Burrage of Civitas. It is an expose of the single market and the limited value, to be kind that membership offers. 

Myth and Paradox of 

the Single Market

How the trade benefits of EU membership 

have been mis-sold

Michael Burrage

Link to: Single Market Exposé

Part One: The Myth of the Single Market’s Trade Benefits

1. A doubling of trade? A minister’s claim to parliament 8

2. Reviewing the evidence 15

3. What business told, and didn’t tell, the Foreign Office 34

Part Two: The Paradox of Who Benefits from the Single Market

4. What would have happened

in the absence of the Single Market? 64

5. Is there a single market in services? 89

6. Does ‘helping to make the rules’

in Brussels help UK exports? 103

Part Three: Conclusions

7. Image without substance 114

8. The case for an EU research agency in the UK 125

Appendices

A: BIS reply to the author’s FOI request 134

B: A 2007 report by EC staff

on the impact of the Internal Market 138

The remainers paint the leavers as liars, thieves and vagabonds.  Consider just a few points below and then ponder over the insistence that we must be part of the Single Market.

From the beginning (a fairy tale this is not). Early 70s until 2015 there are just 37 FTA agreements that the EU have negotiated with small countries, in some cases collections of countries. This brings the total to 55 as of 2017. The total GDP of these countries is just $7.7trn.

In 2011 A report was produced by the Department for Business, Innovation and skills (BIS). This report was seized upon, misinterpreted forming astonishing results which have proved to be untrue. The Minister of state took the now fabricated version of this report and informed Parliament. He claimed that: ‘

• EU countries trade twice as much with each other as they would do in the absence of the Single Market programme’.

Under the freedom of information act the report was eventually published. Upon examination, it was shown that this claim was a lie. 

• Sir Edward Jonathan Davey MP FRSA is a British Liberal Democrat politician. He has been the Member of Parliament for Kingston and Surbiton since the 2017 general election, having previously been MP for the constituency from 1997 to 2015.

There were no such findings, there was no such research to prove this theory out. In fact the report was based on a report produced in 2007 by three French Academics. This report was taken compiled together with an EU report which was an attempt to find failings with the single market, to prove a case for more integration and central control.

With the upcoming release of the document the Minister perhaps sensing a discomfort added further reports, produced after his claims. In a vain hope to recover his now tattered image these reports were: 

1. An internal report the department had published, but this showed no reliable evidence on the benefits of the Single Market.
2. A Review of the Balance of Competence between the UK and the EU, which was conducted by the Foreign Office. Inclusive of claims by the bastion of impartiality the CBI, TheCityUK and various trade federations and businesses. They each claimed that UK exporters have benefited by ceding responsibility for trade negotiations to the EC.

No report cited any evidence which supported the Minister's claim, clearly he misled the house.

To come to the 55 trade agreements now in place with various small countries and collections of countries. In total a GDP of$7.7trn.  Michael Burrage of Civitas compares here with those negotiated by Chile, Korea, Singapore and Switzerland, four independent countries which have none of the ‘heft’ or ‘clout’ or ‘negotiating leverage’ which the CBI and many businesses consider essential in trade negotiations. 

The conclusions are:

• By contrast the aggregate GDP of all the countries with which Chile had agreements in force is $58.3tn, Korea’s totalled $40.8tn, Singapore’s $38.7tn and Switzerland’s $39.8tn. However, the agreements of these four countries include their agreements with the EU, which has a GDP of $16.7tn.

• About 90 per cent of the agreements of these four smaller, independent countries include services, whereas only 68 per cent of the EC’s trade agreements do so.

• The EC has therefore opened services markets of just $4.8tn to UK exporters, whereas the Swiss have opened markets of $35tn, the Singaporeans of $37.2tn, the Koreans of $40tn and Chileans of $55.4tn. However, we do not know if the EC agreements secured better terms than these independent countries, since the scope of these agreements has never been compared in detail.

• Analysis of the growth of UK exports of goods before and after EC agreements have come into force, for at least five years, shows that in most cases (10 out of 15) the post-agreement growth of UK exports has fallen. The five countries where the post-agreement growth of UK exports rose were Turkey, Chile, Lebanon, Papua New Guinea and Fiji. These therefore are the clear success stories of 42 years of EC negotiation on the UK’s behalf. Their total GDP in 2015 was $1.1tn, which is significantly less than the $1.5tn GDP of Australia with which the EC has yet to negotiate an agreement.

• By contrast most of Switzerland’s agreements (11 out of 15), most of Singapore’s (eight out of 12) and most of Korea’s (four out of five) have been followed by an increase in the rate of growth of their exports to the partner countries. Most Chilean agreements (13 out of 18) have been followed by a decline in the growth of their exports, though they differ from the British in that most of their pre-agreement rates of growth to these 13 countries were unsustainably high.

As you see the obfuscation dates way back, clearly indicating considerable vested interests which are not inline with the UK's or its subjects vested interests.

The EU Single Market Issues

The EU single market

Patrick Minford's - Economist and advocate for free trade explains:

"The Single Market is simply the geographic area within which EU regulation creates ease of doing business and around which the EU creates a protective trade barrier as well as mandating free migration. Thus to be ‘in’ it requires that one submits to the regulation, the protection and the free migration".

To explain in more detail it is a single market that all can sell into provided each market follows the regulations as set out by the EU regulations. It is also a protectionist market that prevents products and produce from landing in Europe undercutting produce grown in the EU. Such as: Oranges from South Africa, Bananas etc. These can be shipped into the EU but are subject to tariffs. Hence, why Jacob Rees-Mogg refers to cheaper food, clothing and footwear. We can lift these protectionist tariffs.

I guess you have to ask was this Baroness Thatcher’s vision as she pushed the single market agenda. The simple answer is no! Baroness Thatcher was an advocate of few regulations and envisaged a market as such. Since the introduction of the single market regulation has gone through the roof.

To be outside we can reduce the burden on business. But! We have to adhere to EU regulation if we are to sell into the EU. This could mean two types of manufacturing process. So why are we leaving? It's simple much of our business is outside of the EU. But currently today we have to adhere to all this regulation, this is a substantial burden on business. Look to our growth with the EU it has been a lack lustre event at best, since 2008 we have dropped from 55% down to 44% of our exports. Meanwhile, WTO countries have increased 27%.

On a point of note, UK exports between 1973 to 1992 grew sharply under the Common Market. Since joining the single market our exports to the EU have declined sharply.

The myth in all of this is the way it's portrayed.  There is a reverence paid to the single market. It's as if, ifwe are not inside we will not be able to trade. Therefore, we should be at least partly in, partly out, or even as though we should have access for parts of the week and not other parts. This is a myth! Everyone has access to the single market, whether it be India, USA or Indonesia.  All trade perfectly well inside the EU.  And, as I've said before they in fact trade better under WTO.

The EU Euro zone GDP is poorly performing and has done so since 2008. Its underperformance is significantly below that of the USA, Canada and the UK. Today it would appear they will slip into recession.

We must leave, and leave cleanly!

The EU single market

Patrick Minford's - Economist and advocate for free trade explains:

"The Single Market is simply the geographic area within which EU regulation creates ease of doing business and around which the EU creates a protective trade barrier as well as mandating free migration. Thus to be ‘in’ it requires that one submits to the regulation, the protection and the free migration".

To explain in more detail it is a single market that all can sell into provided each market follows the regulations as set out by the EU regulations. It is also a protectionist market that prevents products and produce from landing in Europe undercutting produce grown in the EU. Such as: Oranges from South Africa, Bananas etc. These can be shipped into the EU but are subject to tariffs. Hence, why Jacob Rees-Mogg refers to cheaper food, clothing and footwear. We can lift these protectionist tariffs.

I guess you have to ask was this Baroness Thatcher’s vision as she pushed the single market agenda. The simple answer is no! Baroness Thatcher was an advocate of few regulations and envisaged a market as such. Since the introduction of the single market regulation has gone through the roof.

To be outside we can reduce the burden on business. But! We have to adhere to EU regulation if we are to sell into the EU. This could mean two types of manufacturing process. So why are we leaving? It's simple much of our business is outside of the EU. But currently today we have to adhere to all this regulation, this is a substantial burden on business. Look to our growth with the EU it has been a lack lustre event at best, since 2008 we have dropped from 55% down to 44% of our exports. Meanwhile, WTO countries have increased 27%.

On a point of note, UK exports between 1973 to 1992 grew sharply under the Common Market. Since joining the single market our exports to the EU have declined sharply.

The myth in all of this is the way it's portrayed.  There is a reverence paid to the single market. It's as if, ifwe are not inside we will not be able to trade. Therefore, we should be at least partly in, partly out, or even as though we should have access for parts of the week and not other parts. This is a myth! Everyone has access to the single market, whether it be India, USA or Indonesia.  All trade perfectly well inside the EU.  And, as I've said before they in fact trade better under WTO.

The EU Euro zone GDP is poorly performing and has done so since 2008. Its underperformance is significantly below that of the USA, Canada and the UK. Today it would appear they will slip into recession.

We must leave, and leave cleanly!