Brexit April 2015

BREXIT
April 2015
Issue 2
In Conversation
with Economists
for Britain
Ruth Lea
B
Join ritty Brexit inside
With the
Better Off Out
Roadshow visiting
Boston
From the
editor
Welcome
Welcome to the second edition
of “Brexit”, the magazine that
puts a positive case for
Britain’s exit from the
European Union.
We were overwhelmed by the
response to our first edition.
Thank you very much for
expressing your support and for all your
emails.
This month we are continuing to look at our leaflet campaign,
the delivery of which to well over a quarter of a million homes
around the UK is now nearing completion. This month we
focus on the cost of the EU to the average UK citizen - that
means you!
We also review what is going on in the wider world of
Euroscepticism, have a look at some books in which you might
be interested and offer you the chance to purchase some
branded merchandise to show your support for British Exit and
for Better Off Out. We are also introducing some new features
related to our core message that we hope you will enjoy. As
ever, do please email me with your comments and views, both
about our magazine and about Britain’s relationship with the
EU.
Social Media
You can find us on social
media where you can keep up
with all the latest news, views
and updates from our HQ.
Better Off Out
@BetterOffOut
“Many of the economic
problems in the EU are
due to EU-imposed
excessive regulation,
bureaucracy, the Single
Currency, badly
structured tax rates and
too high interest rates
for the southern
countries.”
- Britty Brexit
Finally, the photo above shows me at the battlefield of Crecy,
where the English archers inflicted a crushing defeat on the
proud army of France in 1346.
All the best
Rupert Matthews
Editor, Brexit Magazine.
Brexit magazine is published and distributed by Better Off Out Ltd of
HMS President (1918), Victoria Embankment, London EC4Y 0HJ.
Letters to the Editor and other communications should be sent to the
Editor, Rupert Matthews, via [email protected]
To follow Britty Brexit
regularly, like us on Facebook
“Better Off Out”.
In conversation
with ... Ruth Lea
Ruth lea cBe is a British political
economist working in the financial
sector. She has also worked as a civil
servant and for the Institute of
Directors. She is now chairman of
economists for Britain.
Brexit magazine - Whatever happens at the
next General election, the question of
Britain’s relationship with the eU will not
go away. And if the conservatives win, then
negotiations followed by an in-out
referendum, will be on the cards.
Where would that leave
Britain in terms of
international trade?
Ruth Lea - The inexorable
decline of the EU’s share of
the global economy is wellknown. Indeed European
Commission President JeanClaude Juncker recently noted
that, by the middle of the
century, Europeans will
represent just 7% of the world’s population.
And he said “…we are the smallest continent.
Our relative part of the global GDP will
shrink. Not one single European country will
be a member of the G7 in 25 years from now.
We will disappear in terms of our economic
weight.”1 Whilst some may challenge the
details, the general gist is surely right.
It is increasingly apparent that Britain needs a
radically different economic relationship with
the EU to fully benefit from the changing
global economy. We need to be free to
Interview
negotiate our own trade deals with favoured
partner countries, which membership of the
EU’s Customs Union prohibits. And we need
to be free to amend and/or repeal business
regulations as circumstances change, which
membership of the EU’s Single Market
prohibits. In the changing world of the 21st
century, nimbleness will be rewarded, whilst
regulatory sclerosis will be punished. Suffice
to say, the EU is an extraordinarily
cumbersome institution when it comes to both
negotiating trade treaties and/or amending
legislation. If said negotiations do not achieve
radical reform, then the UK has nothing to fear
from leaving the EU.
Bm - There is currently a great deal of
speculation about what would be the best
option for Britain if “Brexit”. Would it be
the WTo, Swiss, Turkish, Norwegian or
any other?
RL - Possibly, but may I suggest
we should really be
concentrating on what we know
would definitely happen and
being clear as to what would
also be desirable.
The first point to make is that
the UK’s default position would
be trade under WTO rules,
unless specific trade treaties had
been negotiated. The UK would
resume the full rights and responsibilities in all
matters covered by the WTO Agreements
including tariffs and other trade related
matters.
Trade can flourish under WTO rules. Take, for
example, China. China joined the WTO in
December 2001 and does not, as yet, have any
special trade agreement with the EU. And yet
Sino-UK trade has boomed. In the decade
2003-2013, the UK’s exports of goods and
services increased nearly 5-fold to China, but
increased by only 47% to the EU and 74%
globally. And UK imports from China rose
“The EU is an
extraordinarily
cumbersome
institution”
Interview
nearly 4-fold, but grew by only 52% from the
EU and by 69% globally.2
UK-Chinese trade was, therefore, significantly
more buoyant than UK-EU trade despite the
alleged allure of the Single Market and the
Customs Union. This underlines the fact that
trade is overwhelmingly driven by commercial
opportunities associated with economic
growth. It is, in addition, obvious that no
country has to be in the EU to trade with the
EU. China is not “locked out” of the Single
Market! Moreover, China has to deal with the
EU’s product regulations and customs
procedures when exporting to us. And,
conversely, we have to deal with China’s
product regulations and customs procedures
when exporting to them. These are the facts of
commercial life.
If Brexit the UK would, of course, face the
EU’s Common External Tariff (CET).
According to a House of Commons Library
Note the average weighted tariff is now about
1%, though there are tariffs of nearly 10% on
cars, for example.3 In addition, there are no
tariffs on services and about 40% of total UK
goods and services exports were services in
2013.
Bm - can we improve on the WTo option?
RL - While trade can flourish under the WTO
rules, the UK would be in a perfect position to
negotiate preferential agreements with
favoured partners. We are a large and
prosperous market and tend to run significant
trade surpluses with key partners - not least of
all with the EU, in general, and with Germany,
in particular. I cannot envisage any German
exporter, for example, wanting any disruption
to or diminution in their trade with the UK.
The notion that we would not have the “clout”
to negotiate is simply bizarre. Moreover, it
would surely be easier to negotiate agreements
bilaterally compared with the EU28, where
competing country interests and sensitivities
can dilute, disrupt and delay the negotiations.
Negotiations for preferential agreements
should, therefore, be pursued with, firstly, the
EU itself, secondly, countries such as Korea
which have bilateral agreements with the EU
(which we would lose on Brexit) and, thirdly,
countries including the USA, where the trade
negotiations are struggling, and Australia,
where there are no negotiations at all.
Bm - There is much talk about eFTA,
where might that fit in?
RL - I think that the UK should consider rejoining European Free Trade Association
(EFTA). Not merely would we then have
preferential access to the EFTA countries’
markets, we would also have potential access
to EFTA’s very impressive network of trade
agreements between EFTA and third countries.
Bm - Are there any elephant traps the UK
would need to avoid on Brexit?
RL - There are two to avoid. The first is the
“Turkish option” within the EU’s Customs
Union. As already implied under this option
Interview
we would still be unable to negotiate our own
trade deals, a big drawback.
References
The second is the “Norway option”, within the
European Economic Area (EEA), based on the 1 EUObserver, “Juncker: ‘time to deepen
Single Market and its “four freedoms” goods, European integration’”, 17 March 2015.
services, capital and labour. (Incidentally, if
2 ONS, “United Kingdom Balance of
we left the EU we would also leave the EEA
Payments: the Pink Book”, 2014 edition. The
as we are currently members of the EEA by
export figures relate to both goods and
virtue of our EU membership.) As already
services.
implied under this option we would still be
3 House of Commons Library, “The economic
unable to amend and/or repeal businessimpact of EU membership on the UK”,
damaging Single Market
Standard Note SN/EP/6730,
regulations, the costs of
September 2013.
which arguably outweigh
4 Business for Britain,
“I
think
that
the
UK
4
the benefits. The other
“Britain and the European
major disadvantage of the
Union: what business
should consider
EEA is that the UK would
thinks”, November 2013,
re-joining the
still be unable to develop its
concluded that by 46% to
own migration policy,
European Free Trade 37% businesses thought that
preferably one based on
the costs of Single Market
non-discrimination between Association (EFTA).” regulations outweighed the
EU and non-EU citizens.
benefits.
BETTER OFF OUT HOODIE
These quality garments are worn by
Better Off Out staff and volunteers at our
Roadshows and other events. Now you
can have your own and show your
commitment to the Eurosceptic cause
while keeping snug and warm at the same
time.
The hoodies are available in the following
colours: Black, Blue, Brown, Burgundy,
Green, Grey, Maroon, Navy, Orange,
Pink, Purple, White or Yellow.
Sizes: Small, Medium, Large, XLarge,
XXLarge.
To order your hoodie send a cheque for £25 made payable to “Better Off Out” to “Hoodie
Offer, Better Off Out, HMS President, Victoria Embankment, London EC4Y 0HJ”, or you
can pay via PayPal to [email protected]. In either case remember to tell us your preferred
colour and size of hoodie by covering letter or email.
Activities
About the Roadshow
The Better Off Out Roadshow takes the positive Eurosceptic message around Britain. We visit
towns and cities to campaign for Britain’s exit from the EU, to gauge support for our message
and lay the ground for future success. We try to meet local opinion formers, make contact with
the press and we always set up a street stall to talk directly to the local people.
If you want the roadshow to come to your town, email Rupert Matthews on [email protected].
Chichester
We took a formal stall at the Chichester Saturday Market on
28 March and were out in force with four local activists moving
among the shoppers both in the market and High Street. With
Sir Mark Worthington leading our team we made a real impact,
showing the flag to market goers and rallying the public to our
cause. We got a good response and enjoyed the day - especially
the bacon sandwiches!
Bournemouth
On 6 March the Better Off Out Roadshow hit Bournemouth.
The team was led into the fray by Campaigns Manager Rupert
Matthews. Rupert reports: “There was something about the sea
air that got everyone’s enthusiasm going. Bournemouth has
something of a staid reputation, but we found the locals keen
to engage in debate and the majority were wanting to see
Britain free of the stifling embrace of the European Union.”
Leicester
On Friday 20 March we paid
a flying visit to Leicester as
we were in the county for
other meetings. Although the
Better Off Out stall was up
for only an hour or so we
managed to handout nearly
100 leaflets.
Boston
Better Off Out went to the historic town of Boston
in Lincolnshire on 14 March to run a street stall near
the busy market. Once a member of that medieval
international trading organisation the Hanseatic
League, Boston is dominated by the The Stump, the
272 foot tall, 15th century church tower. We
campaignedin the shadow of The Stump and got an
enthusiastic response from the shoppers who were
out in force. We met with both the Conservative and UKIP Parliamentary
candidates for the Boston & Skegness constituency. Video interviews with both are available
on the gallery page of our website.
Features
They’ve tried this before...
Philip II of Spain
In the later 16th Century Philip Hapsburg made
a determined effort to unite all Europe under his
own rule. As with so many who seek to rule all
Europe, Philip cloaked his ambition in high
sounding rhetoric. In his case he declared that
he sought to return Europe to the fold of the
Catholic Church and to defeat the cause of
Protestantism. No doubt it was merely a
coincidence that driving the Protestant Queen
Elizabeth I of England from her throne involved
a Spanish invasion that would have ended with
Philip in control.
It must be admitted that Philip of Spain didn’t
do badly before he became unstuck, managing
to become King of Spain, King of Portugal,
King of Naples, King of Sicily, King of
Sardinia, King of Navarre, Archduke of Austria,
Duke of Burgundy, Duke of Milan, Count
Palatine, Vicar of Siena and Lord of the
Netherlands, not to mention Duke of five
smaller duchies, count of ten places plus so
many minor titles that even his own court was
not entirely certain how many titles he held.
Philip also controlled the vast Spanish Empire
in the Americas and Far East together with the
enormous wealth that brought him.
The high point of Philip’s ambitions came in
1588 when he sent the vast Spanish Armada to
invade and conquer England. The defeat of the
Armada by the English fleet led by Sir Francis
Drake and Lord Howard of Effingham rallied
Protestant lands and other rulers to
oppose Philip’s ambitions for a united
Europe. His dreams of great power were
over. In 1596 he was forced to declare his
government bankrupt.
SLOGAN COMPETITION
This month our competition is to come up with a slogan for us to use
at our Roadshows. We are looking for something short and snappy that
can be used on press releases, leaflets and other materials. Try to keep
it to under 8 words if you can.
Please send your entry to the Editor, [email protected], before 30 April
2015. The best entry will win a Better Off Out hoodie. The winner will
be contacted by email. The judges’ decision is final. By sending us
your email you are giving us permission to use your entry in our
campaigning and for other related purposes. Left: A volunteer wearing
our hoodie with our ship in the background.
leader
estimates of the cost to Britain of
being a member of the european
Union vary wildly, often depending on
the political views of those making the
estimates. Here Better off out’s
campaign manager Rupert matthews
seeks to get to the truth.
Everyone agrees that the European Union
costs Britain a great deal - even the most
fervent Europhile accepts that. But exactly
how great that cost is remains open to
question. Different people include different
things. Obviously the billions of pounds in
cash that the UK government hands over every
year should be included, but what about
indirect costs such as extra regulations and
extra bureaucracy? And then there are even
more indirect costs such as unemployment
caused by lost opportunities, such as the lack
of a free trade deal with China. How should
those be costed in?
The waters can become very muddied indeed,
even when talking about something as
straightforward as cold hard cash.
cold Hard cash
Let’s take an example where the figures are
not in dispute and see how they can be
presented in different ways by people with
different agendas. In 2012 the UK paid direct
to the European Union a shade under £20
billion in three forms: Direct government
contribution, customs fees and agricultural
levies. Of that, about £8 billion was paid
straight back again in the from the Budget
Rebate and agricultural levies. That leaves a
direct payment of around £12 billion from the
UK to the EU.
But it does not end there. The EU then spent
around £6 billion on projects in the UK. These
included such diverse things as a roadshow for
carbon management visiting businesses in the
Midlands, a media campaign raising
THE COST OF
THE EU
awareness of broadband digital technology
among businesses in Newcastle and a
Wellbeing Innovation Centre in Cornwall.
So here is the first question, should that £6
billion be deducted from the £12 billion.
Europhiles, the European Commission and the
UK government routinely do so. That enables
them to say that EU membership costs only £6
billion per year. Some would argue that much
of what the EU spends money on the UK are
not things that the UK government would
fund, still less would you spend your money
on these things if it had not been taken off you
in taxes in the first place - and that is not even
mentioning the high levels of money lost in
EU waste and fraud. Taking that view, the £6
billion spend in the UK should not be
deducted, leaving the direct cost of EU
membership at £12 billion. So £20 billion, £12
billion or £6 billion - take your pick. And that
is when everyone agrees on the figures.
Regulation, Regulation, Regulation
Costs become even more difficult to work out
when dealing with indirect costs. Take
regulations on business. Obviously there have
to be some rules, but EU regulation tends to be
overly bureaucratic, costly and geared toward
the politically correct. Even worse, EU
leader
regulations apply to 100% of
British businesses, even though less
than 10% of them export to EU
countries. The EU Commission
itself reckons this costs around 4%
of GDP, something around £70
billion for the UK. But there are
additional knock-on costs as well. If
a business delays expansion
because of regulatory costs they are
not employing extra staff, landing
the government with a bill for
unemployment pay and associated
social costs.
Other costs fall on all of us. The
Common Agricultural Policy is a
double-edged sword. We all pay
directly in the form of higher food
prices, but we pay indirectly as well
because the CAP subsidises farmers
to grow crops that can be grown
cheaper elsewhere instead of
concentrating on agricultural
activities where they could lead the
world. The Common Fisheries
Policy has similar problems, plus
the way in which it degrades fish
stocks.
Non-Financial costs
Then there are non-financial costs. A person
who is unemployed due to regulations is not
just a cost to the state. The cost in low selfesteem, lost skills training and increased
dependency can be high, if difficult to cost in
cash terms. And what of the worker’s children
who miss out on a holiday, on little treats or in the worst cases - warm clothes and quality
food on the table? The leftie do-gooders who
routinely support EU membership happily
condemn the weakest and most vulnerable in
society to impoverishment and lack of
opportunity without a second thought.
Total costs
Given the complexities of the thorny problem
of working out the costs of Britain’s
membership of the EU, you could be forgiven
for giving up in despair. Clearly it is
impossible to get everyone to agree. Nick
Clegg will minimise the costs just as fiercely
as Nigel Farage will maximise them.
But finding agreement is a will o’ the wisp.
Finding the facts is easier. By studying the
figures and making reasonable assumptions
we have arrived at an estimate of about £6,000
per family per year. We think that is a price
too high to be worth paying.
Britain would be better off out of the
European Union.
Activities
HOW TO JOIN BETTER OFF OUT
Better Off Out is a cross-party campaign, putting the positive case for the United Kingdom
leaving the European Union. The campaign is supported by MPs, MEPs, business leaders,
academics and thousands of Britons who believe that Britain would be Better Off Out. We
aim to explain why the United Kingdom would be Better Off Out of the European Union.
And, incidentally, we are based on HMS President, which served in World War I as an Uboat hunter armed with guns and depth charges. Rather apt, we think.
By joining as an Associate Member you will playing a more active role in working for a
better future for Britain. You will also receive:
*
Printed quarterly magazine via post
*
Invitations to events, many at discounted prices
* Free co-membership with our
sister organisation The Freedom
Association.
To become an Associate Member, send
a cheque for £30 to Better Off Out,
HMS President, Victoria Embankment,
London EC4Y 0HJ or phone 020 7936
2232 with your credit card details.
Future Events
McWhirter Memorial Lecture
All the way from Germany
On the evening of Monday 26 October,
Better Off Our will be present at the
McWhirter Memorial Lecture. This year
this prestigious event is being held in the
Captain’s Lounge of HMS President,
moored on the Thames by Blackfriar’s
Bridge. Speaking this year will be Charles
Moore, with this talk timed to coincide
with the publication of his new book
“Margaret Thatcher - Liberty, not
Equality,” Volume II of Margaret
Thatcher - The Authorized Biography
Better Off Out will have a stand at the
Bruges Group Conference at which Bernd
Lucke of the Alternative for Germany
political party will be speaking. Details to
be announced. For further details contact
the Bruges Group on
[email protected]
If you have any events that you think our
readers might like to attend, please send
details to the Editor on [email protected] for
inclusion in future editions.
News
options facing the UK. This led him to the
conclusions that ”the debate is not about being
in or out [of the EU] it is what we do if we are
in and what we do if we are out.”
He then argued that "Britain needs to be
thinking more globally than it has done” and
that in regard to Britain’s economic interests
"We don't stand up for our financial sector like
the way the French stand up for their
agriculture."
Dr Lyons went on to say that “future Eurozone
The chief economic Advisor to Boris
relationships between those in and not in the
Johnson, mayor of london, Dr Gerard
Euro will become key” and that “we should
lyons, has given a highly impressive
have no qualms about leaving the EU if we
account of his report "The europe Report – take a global approach.”
a win-win situation" at the Global Britain
The event then enjoyed a lengthy discussion
morning conference held in Westminster.
with Dr Lyons taking questions on future
foreign investment towards London and the
Explaining how the future might look for the
UK, Goldman Sachs' intervention, business
London economy and, by implication the
concerns about the fear of the unknown and
wider UK economy, Dr Lyons gave a rational the different attitudes between SMEs and large
and thoughtful discourse on the relative pros
multinational corporations. The event then
and cons of trying to reform or leave the
finished with wine, cheese and sandwiches.
European Union.
You can read the entire report on the Global
Dr Lyons explained how his research paper
Britain website, or go to:
had taken a long term view of twenty years,
http://www.london.gov.uk/sites/default/
unlike many other economic reviews of the
files/europe_report_2014_08.pdf
THE EUROPE
REPORT – A WINWIN SITUATION
News
Business for Britain exists to give a voice to
the large, but often silent, majority among
Britain’s business community who want to
see fundamental changes made to the terms
of our eU membership. They are
independent and non-partisan, involving
people from all parties and no party. As a
campaign, they aim to reflect the views of
our business signatories, and the campaign
is represented in the media and at events by
people with real business experience.
Business for Britain will ensure that the
British people understand that many UK
business people want a better deal from
Brussels and are not scared to fight to
achieve that change.
“THE CHANGE
WE NEED”
REPORT
Britty Brexit
The reforms required are in response to
problems identified by Business for Britain in
its previous publications and research
including the influential ‘Change, or go’
pamphlet. The list has been compiled
following polling, consultations with BfB
members and discussions with other
Ahead of the General Election, Business for
Britain has published ‘The Change we need’, a organisations involved in the EU debate. The
list provides much needed clarity over what
new pamphlet setting out a list of key EU
EU reform should look like and is a clear
reforms that a future Prime Minister must
secure in order to keep Britain in the EU. The agenda to better position both the UK and EU
ten changes suggested are not exhaustive, but for the global race.
represent a measure against which the success The Changes we need
An end to ‘ever closer union’
of any future EU renegotiation can be judged. 1.
2.
Cut EU red tape for SMEs and start-ups
With the ongoing Eurozone crisis, it is vital
3.
Return control over social &
Britain secures an ambitious new deal that
employment laws
reforms the EU to make it more competitive,
Protect the City and financial services
truly opens it up to trade across the globe and 4.
5.
Protect the UK from Eurozone
protects the UK as a non-Eurozone member
meddling
state.
6.
Fast track international trade deals
7.
Cut the EU budget to save taxpayers’
money
Outside the Eurozone,
8.
Apply UK transparency laws to the EU
Britain has halved the
9.
Give member states control over
government deficit as a
migration
percentage of GDP.
10. Restore Britain’s right to veto EU laws
Think how much better
we would if we left the
EU completely.
To follow Britty Brexit
regularly follow us on
twitter @BetterOffOut”
Read the whole thing on the Business for
Britain website, or go to:
https://view.publitas.com/business-forbritain/the-change-we-need/page/1