HOW DO YOU LIKE YOUR BREXIT SIR, HARD OR SOFT?

The debate about whether a Hard or Soft Brexit is ‘good or bad’ for the UK has raged long and hard. After over a year of trying to figure out what it will mean for the UK I believe I have finally come to a general understanding of it’s net effects for the UK. I will try to explain in simple and brief terms as follows. I am thankful to such experts in these fields as Professor Patrick Minford, Professor Ruth Lea, Nigel Farage and Bill Cash amongst those who have contributed to this. I take all my references from their work and speeches and credit them with the research. If there are any errors, please do let me know.

It concerns 3 major points. I deal with them here individually;

Democracy

Economics

Border Control

Democracy

One man = One vote. This is democracy. It is what every European country has fought for centuries – to be given a voice so that all men, rich or poor, can be heard in how they wish to be governed. It is a fundamental premise of democracy. This no longer exists in the EU. Merkel or Macron, a vote in Europe means little as to how you are governed. Governance comes from the EU. The EU is an unelected, unaccountable and thus undemocratic entity. It is above democracy.

In being undemocratic, there is no learning from past errors as populations are unable to have their voices heard by their rulers. As there is no pressure to change and the status quo merely continues along the same path, justly or unjustly, as committees or ‘group think’ create a dereliction of all individual accountability for actions taken. The EU operates a ‘consensus’ democracy where in a vote the result is already known, as it has been pre-agreed beforehand. That is not democracy. Clearly, if populations do not like the consensus opinion there is nothing they can do about it anyway, as the EU is unaccountable as it is unelectable. There is no voice, as the Greeks found out to their cost (as well as Spain, Portugal and Italy). Yes, they made a noise but it wasn’t listened to. They must follow the marching orders from the ruling unelected elite in the EU. This tells me that the EU is not listening and therefore not learning.

To me, this is not democracy and I believe the UK population does not wish to live under such governance, in particular as the UK entered the EU project under the auspices of free trade NOT increased EU governance. Furthermore, the UK does not appear to have much say in the running of the EU even as it has slowly ceded its powers. By leaving the EU the UK regains its democracy and self-governance. It really is taking back control.

Economics

The cost to the UK of being in the EU is large costing around a net ￡10bn-￡14bn p.a after rebates making the UK is the second biggest net payer into the EU after Germany (yet remember, the UK does not have a big say in EU governance).

The UK net imports (or if you prefer spends) around ￡70bn-￡80bn on goods and services from the EU each year.

The EU is an effective protectionist customs union whereby anyone outside must agree to pay a tariff to sell it’s goods inside and those inside must buy goods from each other at the same tariff. That means, if outside the EU, the UK could buy goods at an overall average cost of c.8% less (figures by Patrick Minford).

The EU imposes costly regulations (as part of the protectionist policy) such as labour rights (maximum working hours, days off, minimum pay, etc) which all considered, costs more than 6% of UK GDP.

Protectionism by its nature encourages a lack of competition, which invariably leads to unemployment. It benefits mostly the incumbents and reduces r&d and thus improvements. What we see currently in southern Europe in particular is this effect when combined with the euro currency.

In leaving all this behind with a ‘hard’ no deal Brexit and using WTO rules with (lower) world prices, the UK will gain an immediate minimum cost saving of around 8% on food, let alone on other products. No doubt cars will become cheaper too as the UK consumers will be free to buy products from other parts of the world that are more cost competitive outside the high tariff EU protection zone. Also the UK will not have to buy the Common Agricultural Policy foodstuffs from the EU at a large premium to world prices. What a difference that could make! The EU is thus not a benefit but more a burden to the UK in this respect.

Ahh you say, but the EU will impose tariffs on UK goods. True, so far the EU response has been belligerent. Tariffs will hurt the incumbent leaders in sectors such as car makers, but as the UK imports more than it exports from the EU by a wide margin does this really affect the UK or the EU? Further, there are no tariffs on services so the city workers in London should survive unscathed unless certain regulations are imposed preventing the UK dealing in EU services. In reality that is improbable as to single out any country goes against WTO rules. Thus the US and other countries may have something to say about such practices (Mr. Macron may not be so sure about luring London based bankers to Paris as a result).

The Folly of a Free Trade Agreement:

The UK does most of its business with the US under WTO rules – it is the UK's largest trading partner. Guess what? There is no Free Trade Agreement in place so why do we need one with the EU? Simply put, we do not but we could have agreement on some industries for good order, especially to allow the incumbent firms to adjust to the new competitive era of non EU protectionism.

So, in summary the benefits are that the UK would keep c.￡10bn p.a. for its economy, have less costly and unnecessary regulations (a saving of c.4% of UK GDP) and is free to source much cheaper imports (food in particular) at ‘real’ world prices without the need for a free trade agreement.

Finally, how does the EU think it can ‘punish’ the UK with no access to the EU? Basic maths shows us the UK is better off outside by a wide margin. It is akin to a sales agent telling his biggest (yes, the UK is a bigger client than the US for the EU) client that he will punish his client if he buys his products cheaper from elsewhere. That logic sounds highly flawed.

Border Control

The UK is successful because it allows migrants to settle. Therefore, it cannot really be called anti immigrant. However, any person in the UK will tell you that currently there is too much migration. When the fabric of society changes so rapidly that the population cannot cope then this inevitably causes pressure on public services (school places, hospitals, benefits, social and non social housing), all of which is currently being felt in the UK. Clearly too much migration is unacceptable and is really a numbers game. Under EU rules we must have ‘open border’ and free movement and thus ZERO control of who comes in or out of the UK. This is clearly not a reasonable position to be in when there are massive migratory moves inwards or outwards. If poor and needy unskilled people come in, chasing free money, accommodation, schooling and hospitals they are natural takers from the social system that has been built up over years through taxes. Allowing those that take out and not to put back in to the system is a recipe for financial disaster and must be controlled. Charity is fine but that is a different concept as one must have the means in the first place to offer charity. The Australian system of ‘fair to all’ is a reasonable model to adopt in this case as it allows those who have required skills to enter under a points system and a government will have a good idea of who will contribute to society and how. This also pertains to UK security. Under the EU this is impossible and has to end.

Of course, this has little to do with other aspects of politics, international relations, foreign policy and other important international policies, which are also highly important. This article deals only with the three main points above.

With that in mind a hard Brexit appears to mean no EU and a soft Brexit means keeping part of the EU rules, tariffs, open borders and costs, which is not Brexit but staying in the EU.

As for how I would like my Brexit? Hard Brexit means Democracy, Free World Trade and Border control. With this information, I see many benefits from a full Hard Brexit. Of course, I would still like to have good relations with our EU neighbours but if they wish not to do so then that is their prerogative.

Furthermore, a Hard Brexit appears to offer a democratic and prosperous future ahead.

SO, HOW DO YOU LIKE YOUR BREXIT?