Better to stay in Premier league

MP Anne-Marie Trevelyan gave two main reasons for her support for Brexit.

Sunday, 17th April 2016, 8:00 am

The first was, “Imagine what we could do if we stopped sending £350million to Brussels every week”.

However, this neglects the permanent rebate and grants which flow back. HM Treasury figures show a net outflow of £161million per week. That is still a big number, but let us put it in perspective.

If you work it out, that is about enough to buy each of us one cup of coffee per week (medium size, at Starbucks). The extra cup of coffee would be nice, but we should base decisions effecting the next generations on something more substantial.

The article last week from a farmer worried about lamb and beef exports was on to a far bigger issue.

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The other Brexit argument was that being free of the EU will unleash a surge of growth and trade. History teaches us the opposite.

In 1960 Britain formed the EFTA free trade area with six other countries, rather than join the EEC. We wanted trading deals, not a common market. The arguments then sounded very like the Brexit ones today. EFTA mostly collapsed as the UK, Denmark, Portugal, Austria, Finland, and Sweden all faced the economic reality and left it to join the EEC.

The unbearable pre-1973 situation was free trade amongst the EEC countries and world trade tariffs for the UK. If after Brexit the trade talks break down, or are vetoed, then that becomes the automatic default set-up.

The weakness of the UK position is due to the fact that the EU is not a single country, but many (27 after Brexit). Most of their trade is with each other.

For example, if due to tariffs on UK trading, Germany sells 10,000 fewer cars to the UK, it can off-set it by selling 10,000 more to France. France will need more cars to replace the 10,000 cars no longer coming from Nissan in Sunderland (also due to tariffs on UK trading). Nissan can still sell those in the UK, but our trade deficit and debts would get even worse. France and Germany are unconcerned since they have lost no trade at all.

This situation applies to all 27 countries; we are not the major trading partner with even one of them. For example, we only take seven per cent of Germany’s exports.

Even a large loss of external UK trade can be made up internally. We only make a few things which cannot be replaced quickly, such as Airbus wings.

Some countries would even benefit by eliminating the UK as a competitor.

It sounds good to say that we are the world’s fifth largest economy, but the EU (excluding UK) is over five times bigger. The size of the EU and its structure means we have less economic muscle than we like to think.

I think the outcome of any trade deal will be a ‘Norway 2’. To access the EU market without tariffs Norway must accept most of the rules, including free movement of people, and pay into the budget. It has no influence on future regulations, but must accept them. Thinking we can get better than that is dreamland.

The UK would get a huge advantage over all the other 27 countries if it could get all the trade advantages without the responsibilities. That will never happen; every one of the 27 has a veto. We will have a nail-biting two years.

Article 50 controls the process. It excludes the UK from key decisions, as well as the final vote, and it leaves the EU in charge of the timetable, following which the UK could be presented with a ‘take it or leave it’ deal.

Inside the EU we are part of the world’s largest economic bloc, bigger even than the USA. World economics in the long term will be dictated by the real giants – the EU, USA, China and India.

I want my children and grandchildren to live in a prosperous country, which is an influential team player in the economic Premier League. Then the future will be bright.

Dr B. Brown