Saw this on FB by someone called A Howard. A very well-reasoned piece, it seems to me, about the perils of No-Deal. Would any of the 'tell 'em to **** off' brigade (which now seems to include Dominic Raab) care to refute it?
Last week on the school run, some fathers were teasing me about my “Brexit obsession” and couldn’t see what I was so worried about. I explained that I have never been so worried and am awake at 4am most nights. We laughed at me being consumed with worries that are none of my responsibility. I compared myself to Maple barking furiously while her owners were out of the house and there was no one there to listen to her warnings.
It became immediately apparent as I explained the consequences of no deal to them and saw the horror on their faces that most people in this country have no real understanding of what no deal really means.
Most people seem to think that if we leave with no deal then we just carry on as normal, right? They think it’s like deciding not to go ahead with a purchase in a shop - don’t we just stick with what we have got instead?
Sadly not. If we have no deal, we leave with nothing and what’s more lose nearly everything we have got as well. The anticipated recession will be worse than the 1930s let alone 2008. it is impossible to say how long it would go on for - some say 10 years others 20 or 30.
The empty mantra of “no deal is better than a bad deal” and nostalgic hopes that Britain is great, coped during the war and can recover its previous glory have blindsided people to reality. It also ignores the way that our country, technology, globalisation and intense competition have changed in the last 60 years or so.
I don’t presume that you want to read my early morning rantings but in case you want more information, here are some basic facts of no deal (boring but important).
If not then skip to the end of the bullets (or tell me to shut up and go back to sleep..)
- everyone describes no deal as leaving on WTO terms. But there are no WTO terms that apply specifically to the U.K. Everyone assumed that we could simply rely on the EU’s Schedule of tariffs. That has recently been blocked by members of the WTO. Understandably. Why should the U.K. as a minor player be able to take advantage of the negotiating position of a large global trading bloc like the EU?
- So we will have to negotiate our own tariffs - Which means getting the agreement of all 160 WTO members. The last successful round of negotiations was in 1994-every round since then has collapsed.
- So unless we can set up emergency cover, we will see a hiatus in trade that will kick in on 30 March with no transition period.
- Even if a U.K. schedule is agreed, we will see tariffs averaging 10% on imports and exports. In some sectors like meat and dairy they are as high as 97%. So U.K. farmers that export lamb and beef will see their prices double and won’t be able to compete with other markets. Their imports of animal feed and fertilisers will also face tariffs so their costs will increase squeezing their margins which are already under pressure. For manufacturing companies that import components and export finished goods, they face double tariffs affecting their ability to compete.
- So ok we pay a bit more money for things and a few companies and farmers go bust. We may not get the full range of things in the shops. So what?
- Only it’s not just about money. We are dependent on imports for a lot of things that we don’t make anymore, never have or simply cannot as they are patented - like life saving drugs, medical equipment and scanners, chemicals, electricity, petrol, milk. We will all be locked out of EU regulatory frameworks and agencies. With another winter NHS crisis and an population that needs heating and feeding, that could cost lives or spread panic and unrest.
- In any event tariffs are not the main problem. The real issue are non tariff barriers like quality standards. The EU has high protection for product safety, food safety and hygiene, child safety, environmental protection, consumer protection and labelling. (Think CE Marks or fire ******ant standards for kids fancy dress, choking hazards, nut allergy labelling). The U.K. currently acts as a gateway to the single market, receiving goods from Asia before they are distributed elsewhere in the EU. The EU will not let in goods that avoid its standards. So we will have to follow those rules in any event leaving us a ruletaker with no say.
- Even if we follow, there will be border checks and inspections - cue months of delays at ports and motorway congestion. Cue perishable goods and medicines going off. Cue insolvency in the supply chain as cash flow dries up.
- But hang on a minute - we can sign up to our own trade deals now! Yes assuming anyone wants to. On 30 March we will be leaving the EU’s 48 FTAs in exchange for .. zero. Those agreements take on average 7 years to negotiate and they have to be ratified within the WTO framework (see point 1 above). In reality, most countries will want to negotiate with the EU first as a major market of 650m customers before they agree anything with the U.K. That is because they have to offer the same terms under the WTO rules to all other states. Commercially manufacturers won’t want to produce small volumes of products for a small market like the U.K. that are different as it is too expensive. If we are lucky we will get the same terms as the EU but we will then be a rule taker rather than in charge of our destiny. So a lot of hassle and delay for not much upshot. We will be turning our back on our largest customer (our trade deficit with the EU is 60%) in exchange for uncertain prospect of other deals. And the volumes of trade under these FTAs will be minuscule.
- What is more the FTAs will be far inferior to what we currently have for services (which make up 80-90% of our economy). The EU regime is state of the art with mutual recognition and passporting so that U.K. business can trade automatically in 30 EEA states and all their dependent territories around the world. No licences, red tape or authorisations or double regulation at home and abroad. The WTO/GATTs regime is embryonic in comparison. States can discriminate on a discretionary basis and impose barriers like requiring you to requalify as a doctor, accountant or architect under their rules. Most States like India and Singapore don’t want the Brits coming in and taking over their markets.
Most of you will have given up reading by now. Too much detail, too boring, too much naysaying, too much project fear. Too much doing down Britain and not enough patriotic zeal.
I love my country and am immensely proud of what it has achieved. But it has not done that alone. The Empire was not built by white AngloSaxon hands alone...the UK’s success in the last 25 years is due in large part to Thatcher’s vision for the EU single market, where the U.K. shared and cooperated with its European counterparts.
My fears stem from my love of the U.K. and the future of the next generation (including my own children). I refuse to sell them a dud. I want to be able to look them in the eye and tell them I did my my very best for them.
What I don’t understand is the passivity that people have towards their own lives and destinies. They blindly assume that all will be ok and someone will sort it out for them. Or they are in depressed stupor, shrugging it off as all too complicated and what difference can one individual make? But what difference do raindrops make?!
People snort and say the Government won’t let this happen. Sadly I am not that convinced. I have read all 585 pages of May’s deal and the political declaration. While I do think it is the best she could have got (actually better than I expected) it is not a patch on what we have being inside the EU or even EFTA/EEA model. What’s more we will have to pay 60m for the privilege and then no doubt pay annual ongoing payments to buy our way back into specific sectors where we need market access. The cost of Brexit to the taxpayer is already huge. The cost of no deal will quickly subsume the 350m a week with no upside in terms of trade, EU funding and infrastructure. I am convinced that if we leave and taste the fruits of May’s deal or no deal, there will quickly be a move to rejoin the EU. That may take 10-15 years and we will lose the benefit of Thatcher’s hard won rebates, vetoes and kiss goodbye to sterling.
Timing is now becoming critical. I do not think May’s deal will command sufficient votes in Parliament. No one will be able to renegotiate better terms for that deal. That is not the EU being stubborn or a bully - it’s just the hard reality of us deciding to leave the club. That means unless Parliament gives alternative instructions that can be completed and ratified before March, we will leave with no deal.
The politicians are locked in paralysis and take their impetus from what they think their constituents want - as expressed in the referendum. If there is a change then they need to know about it.
Are you going to stand idly by? A witness to your own car crash? With your kids or grandkids strapped in the back?
At the end of the day, as I said before the referendum, it depends on what kind of society you want to live in. There are those that want to align the UK more closely with the US with its low cost, low regulation economy where each man (gender deliberate) looks out for himself. That is good for business and shareholders but it puts profits ahead of people. Low regulations mean lower wages, lower employment protections such as maternity, parental leave and sickness cover. It means lower tax for business but reduced benefits for ordinary citizens in terms of health, education and other public services. Today’s UN report on austerity does not make easy reading but that situation will only worsen when the costs of Brexit work their way through to employees, taxpayers and consumers. I don’t see the likes of R-M and Farage suffering but will hit those hardest that are already worse off.
Sensible policy making involves trade offs and compromises. We cannot have it all. It is time we work out what is more important - stopping immigration or preserving our own rights of free movement, preserving freedom to trade and with whom or maintaining our island independence, upholding the concept of sovereignty or engaging in international dialogue and cooperation, preserving our economy or our personal identity, reinforcing our statesmanship and global influence or just the memory of our Glorious past?
I don’t know the answers but all I do know is that I don’t want our children’s futures to be the collateral damage. And nobody voted to be worse off or to see further austerity cuts to education, pensions or the NHS.
