There is no cliff edge when we leave the EU. There will be no economic cataclysm as Remain forecast. How many more absurd scare stories are they going to run? They have suggested Airbus will be selling planes without wings as they will not be able use the ones we supply; that planes will be grounded on the continent without permits to fly to the UK; and that all factories requiring imported components from the continent will suffer from some unspecified blockade which will stop the parts getting through.
All of these are based on some foolish misunderstandings of how trade functions and how modern factories operate. UK suppliers of Airbus wings are locked in by contract to carry on supplying, and every plane Airbus delivers after March 2019 will need those same UK wings, already certified as good to fly. It was particularly odd to read that they might switch to Chinese ones, as China still has not become a member of the EU – even though they say we have to be in order to sell such products. Continental airlines are busy selling tickets to fly to the UK after March in the knowledge that arrangements will be made to allow them to continue to use UK airspace and to land at UK airports. Their wish to do this ensures the continental countries will make reciprocal arrangements for UK airlines going to France or Germany.
Just-in-time supply chains currently use both EU and non-EU components without special problems if they come from outside the EU. I do not expect the UK authorities to create extra delays at our ports for such imports, but if they did the factory ordering the parts would just require the supplier to send the parts by an earlier truck or train to combat the longer transit time.
It is time the Treasury and the wider government swept aside its stupid gloom about Brexit, and set out just how it will use the new freedoms and the extra money it will have to spend as soon as we leave the EU. If we leave next March without signing the penal Withdrawal Agreement we could give a welcome boost to UK factories. Why not announce zero tariffs on all imported components for assembly, cutting the cost of non-EU items currently taxed? Why not take control of our fish, and more fish in UK ports and build a bigger fish processing industry at home? Why not promote more home-grown food, imposing some tariffs on the continental competition where they pay no such tax at the moment? We could at the same time cut tariffs on non-EU food to limit price rises.
Stopping large contributions to the EU budget will immediately improve our balance of payments account, as all that money has to be sent abroad as if we were paying for imports, though we get nothing for it. It would also release large sums to spend at home. Let’s have tax cuts to boost home ownership, help the car industry, and encourage work and enterprise. Let’s also boost the economy by hiring more teachers, doctors and nurses, and improving our transport systems with new investment.
The overall impact would be to boost national income and output by 1% next year and 1% the year after if we spent the £39 billion over the time period.
Could they blockade our exports? Under WTO rules, as they are and we will be, they are not allowed to charge tariffs on us which they do not impose on others, or impose new non-tariff barriers to trade. I don’t believe the stories that Calais will go slow to damage our exports, as our trade through Calais is crucial to that port’s jobs and success. Were they to do so, Rotterdam, Antwerp and other Dutch and Belgian ports would love to take the business off them.
It is time the Government moved on from seeing Brexit as some problem to be managed, to seeing it as full of opportunity for more jobs, more growth and more prosperity. That is why many of us voted Leave. The Treasury should back us and go for growth based on new freedoms we will win on departure.
John Redwood’s How to Take Back Control: Trading Globally Through the WTO is published today by Politeia
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