Plenty of mood music but little of substance

Prime Minister Theresa May delivered her long-awaited Brexit speech in Florence last Friday. By now, many of our readers will have had ample opportunity to read both the text of the speech itself and the verdict of all and sundry.

In summary, Mrs May gave a speech which attempted to reassert her leadership of the Brexit process. In the recent negotiations, David Davis has received far more coverage than the Prime Minister, while Boris Johnson’s article in the Sunday Telegraph a week ago was interpreted by some as a leadership bid and an attempt to upstage her. Reports of splits within the Cabinet over the shape of Brexit also made it imperative for the PM to stamp her authority and show to the world that she was not a lame duck presiding over a fractious, chaotic government.

So what did she say? That dreadful phrase “deep and special” which regrettably permeates so many government position papers, appeared twice. Was the speech written by the same person who devised the equally awful “strong and stable” mantra which  proved so unconvincing to the UK electorate last June?  Of course, particularly in a speech like this, a certain amount of diplomacy is necessary, but we are going through a divorce with the EU and the idea that divorcees are likely to want a “deep and special” relationship after ending an uncomfortable relationship stretching back more than forty years  is, quite frankly, ludicrous.

This irritating phrase apart, the mood music was pretty good. Although Mrs May campaigned for the remain side, albeit with little enthusiasm, she articulated the reasons why we voted to leave very clearly and succinctly. “The strength of feeling that the British people have about this need for control and the direct accountability of their politicians is one reason why, throughout its membership, the United Kingdom has never totally felt at home being in the European Union.

And perhaps because of our history and geography, the European Union never felt to us like an integral part of our national story in the way it does to so many elsewhere in Europe…..So the British electorate made a choice. They chose the power of domestic democratic control over pooling that control, strengthening the role of the UK Parliament and the devolved Scottish Parliament, Welsh and Northern Ireland Assemblies in deciding our laws. That is our choice.

Absolutely. All the same, even those – including some within Mrs May’s own Parliamentary party – whose loathing for the EU goes so deep that they hope it will collapse, cannot escape the fact that we cannot and should not cut ourselves off from our neighbours on the continent. “But what we do want – and what we hope that you, our European friends, want too – is to stay as partners who carry on working together for our mutual benefit.

All well and good, but when it came to the details of how this partnership is to work, detail was very sketchy. Mrs May acknowledged the need for a two-year transition period, but didn’t say what sort of transitional arrangement she was seeking, except to rule out EEA membership:- “European Economic Area membership would mean the UK having to adopt at home – automatically and in their entirety – new EU rules. Rules over which, in future, we will have little influence and no vote. Such a loss of democratic control could not work for the British people.”

Not that accurate although at least consistent with earlier statements. This does pose the question as to what Mrs May is proposing instead. Richard North is quite correct to point out that whether you are talking about an interim deal or a permanent arrangement, there are only three options:- the “no agreement” (or WTO) route, EEA membership or a bespoke bilateral trade deal. The last appears to be the preferred choice for a long-term arrangement, even if Mrs May has ruled out using the EU-Canada deal as a model, but if it can’t be concluded before March 2019, it doesn’t leave us with many options for the transitional deal. The only insight we have gained form this speech is that Mrs May seems to have recognised that any free trade agreement with the EU would require some sort of umpire or mutually acceptable superior authority – rather like the EFTA court.

The time factor is crucial in all this, especially as our team has agreed to the EU’s negotiating schedule, which insists that satisfactory progress must be made on the rights of EU citizens in the UK, the Irish border issue and the “Divorce bill” before trading arrangements can be discussed. Mrs May had hinted earlier in the week that an offer of at least €20 billion was likely to be on the table.  In her speech on Friday, she emphasized her commitment to securing a deal which will allow EU citizens currently residing in the UK to remain and added that as far as the Irish border issue was concerned,  “We and the EU have committed to protecting the Belfast Agreement and the Common Travel Area and, looking ahead, we have both stated explicitly that we will not accept any physical infrastructure at the border. We owe it to the people of Northern Ireland – and indeed to everyone on the island of Ireland – to see through these commitments.”

The conciliatory tone of the speech elicited some positive comment from senior EU figures, with Michel Barnier describing it as “a step forward” but highlighted the lack of detail. France’s President Macron welcomed the UK’s willingness to move forward, but he and other European figures joined Barnier in bemoaning the absence of clarity. Leo Varadkar, the Irish Taoiseach, sounded more positive after threatening to block the next stage of the Brexit talks a few days earlier.

Reaction from the UK has been varied. “Leave will effectively mean stay” said an unenthusiastic Dr Peter Mullen. Richard North  called the speech “Empty rhetoric” and poured scorn on her claim that “we can do better than this” following references to the EU/Canada deal and the EEA agreement. Richard Tice of Leave.eu said “I fear Theresa May has now given the EU no incentive to agree to anything”. Brian Monteith of Global Britain was somewhat more positive, insisting that “it is not the sellout that so many of her critics who are rushing to judge allege.”

The most telling comment,  though, comes from Michel Barnier in a speech which anticipated Mrs May’s. Just one short sentence:- “At midnight on 29 March 2019, the United Kingdom will leave the European Union and will become a third country.” That’s the rules. No special treatment. The treaties cease to apply and a new relationship of some kind or other will replace our membership of the EU. He went on to say “I would like to be very clear: if we are to extend for a limited period the acquis of the EU, with all its benefits, then logically “this would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply” as recalled in the mandate I received from the European Council, under the authority of President Donald Tusk.” In other words, the only sort of transition he could imagine taking Mrs May’s words at face value would, in effect, be a postponement of Brexit, which would clearly be unacceptable to many MPs in Mrs May’s own party, let alone the wider Brexit-supporting community.

In conclusion, while Mrs May’s speech was peppered with good intentions, its most disturbing feature is that it could easily have been made a year ago. What has been going on behind the scenes in the last few months? As M. Barnier has pointed out, the clock is ticking and Brexit day draws ever closer. There is a great deal of detail to clarify and precious little time in which to do it. We must not stay in, we cannot crash out and all the obvious alternatives have been rejected. What exactly, then, is the route which Mrs May, David Davis and their colleagues suggest we take in order to arrive safely on Brexit day still able fully to function as a country?  We would all love to know.

Deal or no Deal?

Britain faces some challenging Brexit negotiations. However viewed through the lens of best practice identified in a commercial negotiating manual, there is evidence that Britain will secure a deal with the EU.

Pre-election rhetoric suggests that the tone of the negotiation might be ‘competitive’ (i.e. hostile). Much of it will actually be about co-operation on matters of common interest like trade, travel, security, etc.

Power is more balanced than some would say. We might buy more from the EU than vice-versa, but proportionately have more to lose on trade. However needlessly damaging a major customer will harm supply chains, EU exporters, EU nationals working in the UK and sending money home…

Over 50% of UK shares are now owned by international investors. EU holdings in the UK are worth £496bn.  At the G20 meeting in September, Japanese business and government demanded Single Market-type access be maintained by both sides.

Policy on both sides is for free trade. This is obviously not absolute –  the EU won’t suddenly complete the single market or open up sensitive defence procurement. But it is committed to various international agreements that commit towards trade liberalisation, stability and not raising barriers.

The EU is a keen supporter of the World Trade Organization (WTO) whose rules allow regional unions (such as the EU) as a means of easing trade between members, but not to raise barriers to trade. In fact, they must avoid creating adverse effects upon other WTO members

There is plenty of incentive for both sides to reach an agreement – if just because they will have to live together as neighbours. The UK could be a major ally in defence and security, so long as its economy is not crashed. It could also be a substantial makeweight in future joint trade deals?

The global economy is so interlinked that failure to reach a viable deal will affect wider economic confidence and stock markets. In the EU, exposed economies like the Irish Republic and Spain would take a hit, with likely local backlash against EU interests – just before the 2019 European Parliament elections.

A botched deal could see the Euro and Sterling hit, with safe haven currencies like the Yen suddenly soaring, hitting wider currency and export stability.

Another factor is the view of the EU’s ‘social partners’.

ETUC represents EU-wide trade unions. Employers’ bodies include Business Europe (‘a CBI’), UEAPME (representing SMEs) and CEEP (representing public service providers). Seen as influential stakeholders, they wish to avoid austerity and damage to Europe’s workers and companies.

Although the EU and UK will start negotiations with some diverging and conflicting positions, remember that this is quite normal for negotiations. Demands tend to be padded so that compromises are seen to be made. Spain has already gone back on the EU ‘demand’ over Gibraltar. In practice, there will be a lot of common ground (e.g. on expat rights). Expect positions to converge.

Despite pre-election rhetoric to appear ‘tough’, it has long been seen that May will play safe and trim to a position that can be pushed through Parliament under tight timescales. This indicates arrangements very similar to being in the Single Market (EEA) as a fallback while the ideal of moving to a bespoke Comprehensive Free Trade Agreement (CFTA) is worked on as arrangements stabilise.

In March, Michel Barnier, the EU’s chief negotiator, appeared to be leading the UK in the direction of EEA membership as the Brexit option with the least disruption.

Threatening to walk-away was part of that rhetoric. Neither side wants ‘Mutually Assured Destruction’ that ‘no deal’ would give. You can bet there will be a deal, even if it’s part agreement, part provisionally keeping respective ships afloat while talks continue.

Negotiations are often about saving face, getting a deal that can be sold to key audiences. The UK might, for example, get better trade terms in exchange for saving the EU a budget shortfall before 2021. Except it won’t be billed as a cave-in, at least in the UK. It might be portrayed as a goodwill gesture to have a joint ‘Brexit adjustment fund’?

Other areas of ‘compromise’ short term might be over accepting EU standards and judgments (which the UK might do anyway in ‘nationalising’ EU laws), or free movement of people. Theresa May has refused to guarantee less EU immigration, consistent with keeping EU citizens’ ‘acquired rights’.

Attitudes to paying the EU vary from ‘they’re getting nothing’ (apart from for joining in specific programmes) to ‘£60bn is nothing to pay for winning back our priceless democracy’. The EU is already preparing for economies after 2021 in its budget, which might reveal the real expectation. However with Germany’s election coming, Angela Merkel and the EU will not want to be seen as saddling Germany with extra contributions. We can expect a harder line short-term.

As an alternative to direct payments, the UK might gesture on recycling saved payments into projects of common interest like defence or tackling irregular migration?

A successful negotiation is one where both sides can claim some success at the end, even if some concessions leave bruises!  Experienced negotiators will recognise that the other party will need to maintain its image too, and they will not seek to humiliate.

Earlier perceptions that the EU might want to ‘punish’ the UK to deter it or others from leaving have been overplayed. Its luminaries might have been exorcising tensions immediately after the referendum shock, and the line taken since has typically been more conciliatory as heads cool. In practice, there is little evidence that any other member state currently wants to follow the UK out of the EU.

European Council President Donald Tusk has quipped that Brexit is ‘punishment enough’ as the UK copes with some upheaval.

There are already outline solutions to some identified problems. The EU can give legal exceptions (derogations) on border measures which might ease the Irish situation. The WTO ‘waiver’ might allow provisional preferential trade agreements to run for a couple of years should there be difficulties (e.g. time-wise) in finalising what is necessarily a complex deal.

The Lisbon Treaty focuses the EU towards the vision of ‘an area of prosperity’ marked by cooperation with neighbouring countries.

Lord (Paddy) Ashdown sees the UK getting a tailored Norway-like deal with a work permit system. He’s not just a Lib Dem peer; he’s President of the European Movement federalists in the UK.

http://www.newalliance.org.uk/ref617.htm has references used for this article.

Rejection of Theresa May’s little Englander ‘Brexit’ is splendid news

By Ambrose Evans-Pritchard. This article first appeared in the Daily Telegraph.

For liberal, free-market Brexiteers, the election shock is a gift from Mount Olympus. We are dancing cartwheels and quaffing our sparkling Kentish wines.

Theresa May’s plummeting star is an entirely unexpected chance to refashion British withdrawal from the European Union along different lines. It re-opens the possibility of a ‘Norwegian’ solution or close variant, an option that she shut down prematurely without debate because it limits her ability to control inflows of EU workers.

Mrs May sees Brexit through the fatal prism of migration, borders, and criminal justice – the déformation professionnelle of the Home Office – strangely oblivious to the immense economic risks of pursuing a narrow strategy to the detriment of all else.

Her vision is irksome to those of us who backed Brexit chiefly in order to restore the law-making prerogatives of Parliament, and to keep a safe distance from an EU that must evolve into a unitary political state if the euro is to survive. Such a destiny is self-evidently incompatible with British democracy and self-rule.

Mrs May is a Remainer who tries too hard to compensate. She has misunderstood the subtleties of Brexit, hijacked the Referendum for the better part of a year, twisted its contours, and seems unaware how her strategy is playing into a corrosive and false narrative taking hold in the world: that the British people are turning nasty and nationalist. So let us begin again.

The shrunken Tories will have to rely on the Ulster Unionists (DUP), who will not brook a hard economic border with the Republic of Ireland.

They will also have to listen more attentively to the Scottish Conservative leader Ruth Davidson and with her triumphant vanguard of Westminster MPs. She is pressing for the “largest amount of access” to the EU single market.

The balance of political power has changed. To the extent that this safeguards the unity of these Isles – the foremost priority – it is a blessing.

The election was not a rejection of Brexit, as Europe’s press seems to suppose. Some 84% of votes went to Brexit parties. But it was certainly a rejection of Mrs May’s particular variant of Brexit. Call it ‘hard’ if you wish. I prefer to call it insular, pedantic, and illiberal.

The natural fit at this stage is the European Economic Area (EEA), the Norwegian option that was once held out as the Holy Grail by Brexiteers of gradualist philosophy, but was subsequently rubbished by the tub-thumpers and Burka banners. The party of this ideology secured 1.8pc of the vote on Thursday, nota bene. It has no legitimate veto over anything.

The EEA would in principle allow Britain to preserve open trade with the EU single market and retain passporting rights for the City of London, the goose that lays the golden egg for a very vulnerable British economy.

“We should use the EEA as a vehicle to lengthen the transition time,” said Lord (David) Owen, one-time Labour foreign secretary and doyen of the EEA camp.

“Theresa May’s massive mistake has been to allow talk of a hard Brexit to run and run, and to refuse to frame a deal in a way that makes sense for the Europeans. The logic of the EEA is irrefutable,” he said.

Lord Owen said the EU’s withdrawal clause, ‘Article 50’, is designed as a deterrent to stop any country leaving. It leads to a cliff-edge, facing Britain with a take-it or leave-it choice when the clock stops ticking. “This puts us in a dangerous position,” he said. The EEA is a way to overleap this Article 50 trap.

Meredith Crowley, a trade expert at Cambridge University, says the great worry is that tariff barriers into the EU will jump to 12pc or 15pc overnight on UK exports of cars, engines, auto parts, and a range of machinery, setting off an exodus of foreign investment. “Joining the EEA would shut that threat down,” she said.

Critics argue that the Norwegian route is tantamount to remaining in the EU, but on worse terms, with no vote over policy: “While they pay, they don’t have a say,” said David Cameron before the Referendum.

This is a canard. EEA states are exempt from the EU’s farming and fisheries policies, as well as from foreign affairs, defence, and justice. They are free from great swathes of EU dominion established by the Amsterdam, Nice, and Lisbon Treaties.

Above all, EEA states are not subject to the European Court’s (ECJ) limitless writ over almost all areas of law through elastic invocation of the EU Charter of Fundamental Rights. The ECJ would no longer be able to exploit the Charter – in breach of Britain’s opt-out under Protocol 30 – whenever it feels like it. We would no longer be under an EU supreme court asserting effective sovereignty. These are not small matters. They are elemental.

Yes, the Norwegian option is a compromise. We would continue paying into the EU budget. This would do much to defuse the escalating showdown over the €100bn bill for EU reparations, poisonous because of the way it is presented. The transfers would become an access fee instead. Norway’s net payments in 2014 were £106 a head. Let us not die in a ditch over such trivia.

Britain would have to tolerate relatively open flows of migrant workers. But contrary to widespread belief, the EEA does not entail full acceptance of the EU’s “four freedoms” – movement of goods, services, capital, and people. Nor does it give the European Court full sway on these issues.

The arrangement allows “a lesser degree” of free movement than within the EU. The language covers the issue of residence, an entirely different matter from the rights of EU citizenship created by the Maastricht Treaty. The EEA permits the sort of emergency brake on migrant flows that was denied to Mr Cameron in his last-ditch talks with the EU before the Referendum.

The point in any case is that the EEA would be a temporary way-station for ten years or so, giving us time to negotiate 80 trade deals with the US, China, Japan, India, Mercorsur, and others without a gun held to our head.

Britain is a contracting party to the EEA. The agreement is binding on all members, and entails rights under the Vienna Convention on the Law of Treaties. Yes, we would need the goodwill of the EEA-trio of Norway, Iceland, and Liechtenstein, and the EU itself.

It is possible that some in the EU are now so intent on punishing Britain – or carving up post-Brexit spoils – that they would stop us pursuing this course. But that would be a hostile act. It would certainly clarify the issue. We would then know exactly what the real agenda was in Brussels. It is better to know this sooner rather than later.

There is no such thing as a soft Brexit. Wise statecraft can nevertheless work through this thicket. The EEA option is the best political solution on offer given the new circumstances. It is a graceful way out of the impasse for all parties, not least for a divided EU with a looming budget crunch and a mountain of other problems to deal with.

Tory ultras might balk at a settlement so far short of total liberation. I balk myself whenever I have to listen to the insolence of Jean-Claude Juncker. Yet Tory ultras did not win a mandate in this election for their hair-raising adventure into uncharted waters.

The vote changed the dynamics of Brexit. Compromise is now ineluctable. Jeremy Corbyn and his army of the young may have done this nation a favour.

Yet more media muddle

As we reported yesterday, Mrs May is not giving much of her Brexit strategy away at the moment. For anyone wishing to find out more, great care needs to be taken as some reports in the press are, shall we say, somewhat less than helpful.

Writing in the Independent, John Rentoul informs us that “Finally, we know what Brexit actually means – Theresa May intends ot take us out of the single market.” Has  Mr Rentoul spotted something that the rest of us have missed? He noticed that Mrs May made it clear that “‘we are not leaving only to return to the jurisdiction of the European Court of Justice.”  He therefore concludes that, “given that the ECJ is the court that enforces the rules of the EU single market, this was confirmation that she intends to take us out of it.”

QED – except that it isn’t true. Whatever the role of the ECJ in enforcing the single market regulations among EU member states, it has no power over Norway, Iceland and Liechtenstein, the non-EU countries who are part of EFTA and access the single market via the EEA Agreement.  Robert Oulds’ book Everything you wanted to know about the EU explains the difference clearly (p189) :-

Whereas the European Commission and the European Court of Justice regulate the EU’s compliance with the terms of the EEA agreement, EFTA’s side is managed by its own institutions.”

In other words, Mr Rentoul is jumping to conclusions. Mrs May has said that “it is not going to be a Norway model”, but she said nothing to preclude the Liechtenstein model – in other words,. re-joining EFTA and accessing the single market via the EEA agreement but invoking Article 112 of that agreement to reduce migration from the EU.

Another piece to take with a very hefty pinch of salt is this piece in the Irish Times by Professor Vernon Bogdanor, David Cameron’s former tutor.  Entitled Why Brexit will be Margaret Thatcher’s revenge, the piece claims that “those most likely to have voted for Brexit will suffer most after Article 50 is triggered.” It goes on to say that “Contrary to popular perceptions, article 50 inaugurates a withdrawal process, not a trade agreement.” I would like to know how many people Professor Bogdanor has met who really think that invoking Article 50 was anything to do with a trade agreement. I certainly haven’t met any!

Getting off on a bad note, he then parades even more ingorance than Mr Rentoul about the EEA. “Matters would be easier, of course, were Britain to emulate Norway and join the European Economic Area, ” he writes. Excuse me! As a mamber of the EU, the UK is ALREADY a member of the EEA. What I presume he means is that we should remain a participant in the EEA by re-joining EFTA, but it isn’t what he said. He then goes on to claim that “The EEA obliges member states to incorporate not only current EU laws, but also future legislation, into domestic law, and to accept the principle of free movement.” Wrong again. The EFTA countries who are part of the EEA are only required to transpose legislation specifically marked “EEA relevant” into domestic law.  Last October, Dr Richard North calculated that only 4,947 out of 23,076 pieces of legislation – in other words, about 21% of the total Acquis – had been incorporated onto Norway’s statute books, much of it technical in nature and much of it also originating with international bodies like the WTO, with the EU merely acting as a conduit.  As for free movement, there is some freedom to restrict it using Article 112 of the EEA, as we have aready noted.

Neither Messrs Rentoul nor Bogdanor seem aware of the Norwegian veto of the Third Postal Directive in 2012, which insisted on deregulating postal services across the EEA. This proves the point that non-EU countries cannot be touched by the ECJ and thus have far greater latitude in dealing with EU legislation, even when marked “EEA relevant.”

Next comes another myth:- “Per head, Norway currently pays around 83 per cent of the British contribution.” In 2015,  Norway paid £1.66 per head of population to access the EEA. We paid about £150. Either the great Professor inadvertantly included Norway’s voluntary contribution to various EU schemes or his calculator seems to be suffering from a chronic malfunction.

He then rounds up his dismissal of any EEA-type relationship by repeating the “regulation without representation” nonsense. Dear Professor Bogdanor, please get your facts right. Norway is represented on the Committess which create EEA-relevant law, even though the country does not have a vote. Read these words of Anne Tvinnereim, a Norwegian politician, who knows what she is talking about. “We do get to influence the position,” she said. “Most of the politics is done long before it {a new law} gets to the voting stage.”

Professor Bogdanor then rejects the Swiss option, which virtually everyone else has already done, but this leaves him with only the WTO option as a possible route, something which Mrs May, by proposing the nationalisation of EU law (in other words, giving laws passed by the EU their authority from our Parliament rather than the EU via the 1972 Accession Treaty) seems to have ruled out.

He is right to conclude that newly-independent UK will be more global. “The irony is that…..leaving the EU will expose Britain to more globalisation, not less.  Brexit, therefore, will be Margaret Thatcher’s revenge. It will suit the vision of the Tory right which hopes that, outside the EU, Britain could become like Hong Kong or Singapore, a global trading hub.” However, he then falls into the common trap of saying that this is exactly what Brexit voters don’t want. Vernon, old chap, I was accused by my opponent in one debate of selling a vision of an independent UK which was just that – “Singapore on steroids” to quote his words.

There are many of us who are excited by the global trading opportunities which Brexit will provide. A recent Fabian Society report linked the Brexit vote with economic deprivation and the lack of government spending on areas populated by the white working classes, but a look at the Brexit vote map shows that this is only part of the story. Many prosperous areas in the South East also voted for Brexit. In rural East Sussex where I live, plenty of large houses, presumably inhabited by people who are not at all economically deprived, displayed large “Vote Leave” boards in their gardens and outside their gates.

On one point I would agree with Professor Bogdanor:-  “Britain….has a deep-seated skills problem…. The priority, if May’s socially responsible capitalism is to be become a reality, must be a radical skills policy. That means more resources devoted to further education colleges, currently the Cinderellas of the education service, and to university technical colleges, for those whose skills are technical and vocational rather than academic.” Yes indeed, to make the most of Brexit, our education system needs to be signficantly re-vamped from top to bottom. Last year, we published Generations Betrayed, a booklet by Chris McGovern, which shows how much the history syllabus needs to be reformed. This, however, is only one of many features about the UK education system which is unsatisfactory.

In conclusion, however, after having ploughed through these confusing articles, the abiding thoughts they leave is a fervent hope that the people who are advising Mrs May about the best Brexit route are considerably more clued-up than Messrs Rentoul and Bogdanor and actually know what they are talking about.

Photo by NS Newsflash

June’s result must be respected

The result we achieved on 23rd June 2016 was a key victory but it is clear that this was not the end of the war. There are still key obstacles to be overcome before we find ourselves fully disengaged from EU membership.

The first issue is to ensure that we all agree, at least broadly, on what our negotiating strategy should be. Here, a broad consensus has emerged. Starting with trade, unless there are massive and permanent –  and thus very unlikely – derogations, we will have to be outside the Single Market, if we are going to secure control of our own borders, to reduce very substantially our payments to the EU and to be outside the jurisdiction of the EU’s Luxembourg Court. Ideally, we should then combine this with a Free Trade deal with the rest of the EU, which would keep our existing trade relations in place more or less as they are at the moment.

There is a school of thought which says that we would be better to be outside the Single Market but in the European Economic Area (EEA). This might be easier to negotiate but it could still leave us with obligations on free movement of labour, payments and jurisdiction which nearly everyone who voted Leave would like to avoid. Being outside the EEA – but in the European Free Trade Area (EFTA) – would therefore be a better bet, but this could be more difficult to negotiate. To secure a deal along these preferred lines, therefore, we may well need to be willing to walk away altogether from free trade with the EU, falling back on World Trade Organisation (WTO) tariff levels which are actually quite low – averaging around 3%. UK willingness to do this, however, if push comes to shove, may concentrate minds on achieving a free trade deal, which would make much more sense for everyone, within the two year period stipulated by Article 50 in the Lisbon Treaty.

Sorting out our trade relationships with the EU would very probably be the most difficult part of our Brexit negotiations, but it would leave a large number of other areas where co-operating with other countries in Europe on the right terms would make sense. Here our objective should be to ensure that there is maximum continuity but on the basis of inter-governmental co-operation rather than the UK being part of the EU’s federal project. As co-operation in all these areas is in everyone’s mutual interest, hopefully, reaching agreement will not be too difficult.

Having set the scene on where we would like to be, how are we going to make sure that we get there? There are significant obstacles in the way.  There is a large majority – probably between 75% and 80% – of MPs who were not Leave supporters. Some of them – ignoring the clear referendum result – are threatening to derail negotiations by opposing them on principle rather than in detail, either by calling for a second referendum or by having reversing Brexit as part of their manifestos for the next general election.  Others are preparing to oppose details of negotiations in such a way that the effect will be the same.

These are dangerous tactics, however, for those who want to win elections.  The outcome of the recent EU referendum was a decisive vote for Brexit. Those who feel they have the right to overturn the biggest vote ever in the UK for any proposition put before the electorate do so at their peril. A recent poll showed that 69% of those questioned thought that the decision taken on the referendum should be respected whether or not they agreed with it and only 22% were against.  Voters are not likely to be happy with either political parties or individuals who fail to support the electorate’s clearly expressed view. Eurosceptics should make sure that those standing for election know this.

Our Chairman’s letter to the Derby Telegraph in the aftermath of the referendum

Sir,

I am astonished at the downbeat response from many industries about the decision to leave the EU.

They appear to have been deliberately misinformed by the government – and to have swallowed it!

Around three quarters of EU legislation is geared to nudging us ever nearer to the Single European State – a country called Europe. That is the main purpose of the EU – “Ever Closer Union”.

The remaining 25% relates to trade regulation of the European Single Market, the only part of the EU project in which industry is interested. Arrangements already exist for non EU member countries to be in the Single Market without being in the EU political project. It is called the EEA – European Economic Area – the “Common Market” part of the project.

You can Google the detailed plan for continued participation in the Single Market. It is called “ FLEXCIT” . There are two versions – a forty eight page pamphlet and the full policy which extends to some 420 pages.

One objection to this policy is that the EEA involves the acceptance of the principle free movement of people. But, under Article 112 of the agreement, EEA member states can unilaterally impose restrictions when they experience excessive immigration. They do not have to ask anybody’s permission.

Another development which the government failed to mention is that most new business regulation is now global and comes from bodies like UNECE (United Nations Economic Commission for Europe) which, for instance, sets the standards for motor vehicles. Whilst there is an EU Directive about this, it was not made in Brussels but merely transcribed from what UNECE agreed in Geneva.

As an EU member Britain has no voice at the real “top table” in Geneva. As an independent country, it will be able to influence matters there.

So there is every reason to look forward to a period of greater British influence in the way world trade is regulated.

Yours faithfully

Edward Spalton