I had the need to visit London yesterday on medical grounds, collecting a copy of the London Evening Standard to read on my way home. Important editorial warning of the ever-increasing likelihood of London rising to tier 3 because of the rapid increase in Covid-19 infections is consigned to the bottom corner with the blazing headlines and main editorial focused on the doom and gloom of a no BREXIT deal. Whilst I appreciate that, overall, the vote in London to remain in the EU was marginally more than 50%, and the former schoolboy Chancellor now editor George Osborne is heart on sleeve Remainer, what happened to balanced reporting? And, of course, the doom and gloom can only be described as originating from the stable of Lord Haw-Haw.
But who are these people in London who cannot accept that we have already left the EU and now want to ensure that UK sovereignty is not compromised by any future arrangements with the EU? I know that some have vested self-interests which can only be described as selfish and certainly not in the long-term best interests of the UK. Remember the Corn Law wars. Others probably have property within the EU and selfishly do not want any added burden to their usage thereof. But surely there has been enough press on these negotiations to understand that the EU is fearful of the future enterprise of the UK embarrassing the EU and thus want to have the capability to rein in and stifle such economic prosperity as there is no doubt that the UK will certainly lead the EU in technology and innovation. You only need to see how many very bright young people have already departed the EU to the UK, USA, Canada, and Australia to know where they think their future lies.
Let us blow one myth currently touted by Remainer – the people of this country did NOT vote to leave the EU with a Trade Deal, they voted to rid themselves of the shackles of the EU. The current so-called Trade Deal is a blatant attempt by the EU to replace some of the shackles to UK prosperity and well-being all in the name of maintaining the integrity of the Single Market, the most protectionist market in the World. A no-deal BREXIT is by far a better scenario than one which continues to shackle the UK to the delusions of grandeur of the EU elite. Let me make my argument.
The EU, as a trading bloc, is possibly, but not certainly the largest trading partner of the UK as some UK business recorded by the EU is only in transit through the EU to non-EU destinations. These transactions will certainly continue regardless of the outcome of trade discussions. The UK’s largest single trading partner is the USA, and the UK is the third largest export market of Germany. Yesterday a German Minister was reported to state that a no-deal BREXIT will cost some 700,000 jobs in Germany, a serious economic impact.
The current net trade imbalance between the UK and the EU is EUR1 billion per WEEK in favour of the EU. Thus, the UK is an important trading partner for the EU.
The UK imports some EUR37 billion of perishables from France per year. What will happen to this produce if France throws its toys out of the pram and blocks this business, or prices it out of the market with tariffs? The French Government finally alerted producers in France last week that the UK has already sourced some 50% of this produce outside of the EU at cheaper sourcing prices, and the EU is not currently able to absorb this reduction in trade. These are perishable good with a finite usefulness so cannot be stored or held up by unwieldly red tape at ports. We are talking of EUR 700 million per week which is much transport logistics, and many thousands of people’s livelihoods. If these products are not freely and swiftly delivered, I predict the producers and supply chain will be on the streets in French cities, and some will burn.
Another French childish idiosyncrasy is the announcement that UK citizens will only be allowed to visit France for up to 90-days in any 180-day period. Considering that President Macron was a former banker does he not understand that people who choose to have extended visits to France spend money there which probably supports the economies of towns and villages they frequent?
Another announcement that also is absurd. The EU have announced that transport from the UK can only be single destination within the EU, the same with pick-up. Economically and environmentally ridiculous. Have the Londoner Remainers not noticed how may distribution hubs have been built in the UK this past year? The UK can play this silly game by restricting foreign lorries to one of these hubs from where goods will be distributed throughout the UK by local transport thus providing jobs here.
Another myth is there will be significantly more paperwork involved in a no-deal structure. Do the people of London think that UK firms only deal with the EU? Do the people of London think that UK trade with the EU will continue with existing paperwork in the event of an EU trade deal? Trading paperwork will comply with International Standards thus for exporters not wholly exporting to the EU little will change. In any event they will find that astute corporates have already reduced their exposure to the EU.
I heard a cynical so-called expert from the fishing industry (where does the media find these ‘experts’) say there is little or no benefit of UK fishermen resuming control of UK waters because most of the catch goes to the EU who will block trade. I remember when the fishing industry in the UK was decimated by the UK submission to the Common Fisheries Policy. It will take time to rebuild UK fishing fleets. An opportunity exists for existing UK fishing fleets. The shop and restaurants of the EU will still need fish. Where else can they get them? If the EU wants to impose tariffs the cost will be borne by the EU buyers, not the margins of the fishermen.
Another, no doubt, tale to spook is BMW intend to transfer production of the mini to Germany. Good luck with that one. They should learn by the woes of Jaguar Landrover who, a few years back, announced they wanted to build Jaguar cars in the USA, that is until they were told in no uncertain terms by the Jaguar Owners Club in the USA that their members would only buy cars built in the UK. Although Jaguar Landrover may have heeded that warning they decided to build the Landrover Discovery Sports in Croatia only to find that they cannot sell them in the UK. Production is now being transferred back to the UK. No knowledgeable car manufacturer will move production from the UK if they want to sell their vehicles. The Mercedes F1 racing team is not only championed by a British driver; the car is designed and built in Northampton, UK. Only the Mercedes badge is possibly produced in Germany.
The biggest laugh for me is the EU demand to have some regulatory control over the activities of the City of London, the financial capital of the World. I was part of the Passport negotiation with Jacques Delours and Prof Tickle with M. Barnier as a bit player. They came with demands from Germany to levy withholding taxes on trades with German citizens and any trade in German Bund. Delusional. They were told that they comply with International trading rules or go away. They now say the financial community in the City will only have restricted access to the EU. They forget that the Euro is and will remain cleared through London – embarrassing for such an important (in their mind) institution. The EU has no financial capacity to absorb the EU based derivatives so will continue in London. If any member State, or EU corporate wants to raise capital it must come to London. This will not change. So much for the mighty EU.
If I were strategically managing negotiations with the EU, in the event they are not willing to remove all the cynical Sovereign handcuffs from the deal I would concede to a no-deal scenario and prepare for WTO rules. I predict, by first quarter-end 2021 the EU will be back looking for a deal. The UK will have a bumpy transition but would under either scenario, and it’s clear that the Stock Market investors are not concerned either way. Investors are the people who put their money where their mouth is so others should listen. It should also be remembered that losing the UK will have far reaching negative impacts on the EU from which they might not recover. The German economy is built on a similar incestuous model as was seem in Japan in the 1970/80’s until it imploded. The UK does not want to be anywhere close to the EU when this happens. I shall also watch with interest as Putin imposes and interferes with the much-weakened EU, especially because the insane energy policy of Germany leaves them totally exposed to Russia. Without the influence of the UK, I think Putin will become emboldened in his dealings with the EU.
In summary I would suggest that Londoners still sleepwalking wake up to the reality that we have already left the EU. Whether or not we have a trade deal with the EU is of small consequence against our long-term freedom and prosperity. I would suggest when Londoners are free to travel the globe again, they stop someone in the street where they are and ask them a simple question – can you show me on a map where the EU and its capital, Brussels, is located? Then when their confused look diminishes ask them where the UK and its capital, London are located. Then remember what it is to be British and think of that quintessential Englishman, Captain Sir Tom and his true blue British view that tomorrow will be a better day.
Another magnificent piece – keep it up and keep in touch. Best. Tony C