So now, this is the most important election in British post war history.
It is crystal clear that the EU negotiations will be very difficult for the UK. The EU countries have ALL agreed not to let Britain even start any trade negotiations until our bill is agreed for leaving.
Since Theresa May has already decided she “will be bloody difficult ” with the people who decide our fate, it seems now almost impossible under her leadership to agree any reasonable outcome with the EU.
It is simply not in the interests of any of the EU countries, (who all currently wish to see the EU to continue in the long term), to make it easy or worthwhile for Britain to leave. Their interests are best served by making the UK pay dearly in every aspect for choosing to leave. This will be done even at the cost to the EU of higher trade tariffs for their exports. The EU will see this as a necessary cost of keeping the EU together.
This has nothing to do with disliking Britain, the EU members must take this course as they realise that Brexit could herald the beginning of the end - fifty years of hard won negotiation and commitment.
If the Conservatives believe that this is not how the EU will behave – then they need to put forward a clear argument that supports an alternative. Just to say that the EU will lose more than the UK in trade tariffs is not sufficient – the EU will see this cost as necessary to save the EU overall. This becomes crystal clear when you consider that if they made it easy and efficient for the UK to leave, then the EU would be under severe pressure from all the other ‘leave’ movements across Europe for many years. If they make it clear that ANY country leaving, will lose a great deal in trade and other benefits, then they stop these movements in their tracks, as it will be clear the economic cost in leaving is just too high.
The facts:-
- 15% to 20% of your wealth is now already gone (due to the fall in the pound)
- Expect most prices to continue to rise (due to fall in pound)
- Expect the UK to pay Billions (maybe £50Bn) to leave the EU – this means that ALL the potential savings in leaving shall be lost and probably a lot more – so forget the £350 million per week (£18Bn per year) for the NHS or anything else!
- The risk to the UK economy is very real in the case of a poor or no trade deal:-
- The Bank’s HQ’s are already planning to leave – 30,000 jobs lost at a cost of £1.6 Trillion (Bruegel Research think tank)
- Companies such as Easyjet have already agreed to leave
- Both service and manufacturer exporters to EU will be in dire straights, (estimated £6Bn)
- Importers will pay much more for everything – so many all prices will go up directly due to this
- Massive funding for our research in Universities and research centres will be lost when we leave – this has already started
- More money will be required for completely new regulatory organisations (to control sensible things like quality of good, that is now done by EU organisations)
- In future, if your or your children want to move or work in France, Spain, Italy, Germany, then you maybe wont be allowed to and:-
- Your EU marked passport (all of them) will need to be changed (who pays – you again)
- When you travel, you will not be covered for emergency health issues
- You shall need to apply for a special driving licence
- You will not be able to hire a car
- You may not be able to buy property or run a business easily in any EU country
So what may be the benefits of leaving?
- There may be a little more we can do in the way we allow specific people in to the UK from abroad to work or live here.
- This is not a simple equation as we are all aware of key people from both the EU and elsewhere that work here in very key areas, such as doctors and nurses for the NHS.
- There is also a quid pro quo for UK citizens – we shall not be free to move around and work in Europe, or in other non EU countries if we change their rules of entry.
- We all know that the underlying issue of the arguments against immigration is about jobs, the economy, the NHS and the welfare system – this will not change whatever the outcome of the Brexit negotiations or if we decide to stay in the EU.
What other key areas really affect what the UK can do outside the EU?
- We can drop EU regulation that we do not like – but CST cannot think of any major issue that we need to change. Most of the difficulty in regulation is due to the way our government implements (poorly) the detail of how it is done.
- We can make new tariff and trade deals with other countries such as China, India and USA. But we know that these take a long time and in getting a better trade deal for our exports, we shall need to open up to their demands. For instance India may wish us to open our borders to some of their people for work and education – rather like the EU!
- We can decide exactly what our research institutions do, but often the EU research ideas are those that we would support.
A best case scenario:-
- The EU negotiations go as well as we could possibly hope. The cost of leaving is reasonable, say £25Bn to £30Bn
A new trade deal is done that allows few trade tariffs between the UK and the EU, this would require some movement on EU nationals into the UK
Such a trade deal would necessitate rules being agreed for economic intervention in industries, in core employment issues, in movement of goods across borders, for regulations of many goods and services.
It would provide for all people already living or working in another country to continue as now
- This would mean that the UK would not lose a massive amount and the hit to our economy would be limited. But it would also mean business as usual for many of the areas that control our laws on both our economy and employment. So exactly what would we have gained in leaving?
A worst case scenario:-
- No trade deal, massive costs for leaving.
Protracted arguments about nationals living abroad both ways.
- Much concern for people working here from the EU, many key workers leaving, major difficulties for the NHS and other companies
- Many international companies start moving their headquarters, inward investment dries up
- Much of the finance sector leaves for the EU or just pulls out costing the UK 20% of tax receipts
- Another massive fall in the pound against the Euro and Dollar
- Significant price inflation caused by the fall in the pound
- Many European exporting companies go into administration
- Massive increase in year on year debt as the government tries to shore up industry, research and the health service
- The UK continues with quantative easing, but this now increases the pound’s instability and interest rates soar
- Britain's financial standing is downgraded severely and costs of government borrowing goes up to unsustainable levels
- The UK economy starts to spiral down into an abyss
- Riots and dissent on the streets, youth unemployment reaches 60%
- The national front gets into power, a deal is done with Russia on oil, gas and trade
- The UK starts to re-arm and threaten France and Germany unless they relax their trading terms…… ah well that’s Brexit for you!
CST
