Opinion from Lord Digby Jones

At the end of the day, it all boils down to Trade….

Published Thursday 29 December, 2016

With the Supreme Court deliberating in the grandfather of all reality tv shows and with MPs apparently talking of little else as they selfishly seek party or individual political advantage (plus ca change.......!), one could be forgiven for thinking that Brexit and how it will all pan out is actually a Westminster Show. 

The reality is hugely different. Not politics; not the delaying machinations of Remoaners; not the soothsaying of those accurate (not!) forecasters, the Experts; at the end of the day, it all boils down to Trade. 

After their Learned Lordships have opined, after Parliament has exercised its sovereignty and voted, after everyone has had their say and, as my Grandmother used to say, put in their two penn'orth, the UK will be leaving the Single Market and the Customs Union. Just get your mind round that Mr Farrand and SUMO......Shut Up, Move On!

The Brexit-lite film-flam is not just an irrelevance, it is a dangerous distraction. Its call for being told in terms what the Government intends to ask for (whatever the Remoaners and pompous Parliamentarians say that is what they want), will weaken this Country's position, increasing uncertainty and damaging current trading relationships. 

The Prime Minister needs to get a grip; a clear statement is required: we are going for a hard Brexit and leaving the Single Market; period. Now let's start there, Brussels. We don't want your self-styled jewel in the crown, Single Market Membership. 

From the UK side, control of immigration is what the 52% voted for and that is impossible to achieve whilst remaining inside the Single Market. If ever Parliament is to respect the wish of the majority it is to deliver that. It is important to note that does not mean no immigration. From food manufacturers to the NHS, this Country's private and public sectors need immigration but control of who, from where, when and how many is entirely incompatible with membership of the Single Market. So is establishing the supremacy of U.K. Courts over the European Court of Justice in Luxembourg..... and the 52% voted for that as well. 

When those proponents of staying in the Single Market shout their case, they are really seeking EU-lite....... and that is unachievable. That's nothing to do with us and what we want; it has everything to do with the other 27 countries in the EU and what they want. Basically, what Germany and France want, Germany and France will get, with Berlin not Paris calling the shots. To keep the EU dream alive, to give the flickering flame of a United States of Europe a chance (no matter how ill-advised that might be and regardless of the lasting damage to Southern Europe that has been caused) Brussels must show that a leaving country is worse off outside than inside.....pour encourager les autres.

And that comes back to Trade. Brussels will want us outside the Single Market so that, they think, our trade will become more expensive; but it is our wish to control our own borders that will lead to us being outwith the Single Market and any additional costs are seen by millions of Brits as a price worth paying.

But will it be more costly to the UK? Will Brussels succeed in its ambition to hurt us? 
Whenever I was involved, as a Trade Minister or Director General of the CBI, in tariff negotiations at World Trade Organisation Summits the parties were trying to reduce tariffs not increase them. We will start our negotiations with them at zero, in both directions. What German car maker, Italian shoe manufacturer or French farmer (volatile lot, those French farmers!) wants his goods to cost more in Britain simply because an unelected Eurocrat in Brussels says so!? Trade will trump (if you'll forgive the expression) revenge politics; the jobs in Stuttgart will say so. 

What will exist as a cost to business in both directions that people seem to ignore is the added bureaucracy, the additional delays and the administrative deterrent of the form-filling and "sales prevention team" attitude at borders as goods that have previously enjoyed free movement meet the usual Customs barriers seen the World over. That will be the same in both directions so it will not be in France's interests (for that is where most of the border controls for EU-UK trade will be) to punish us since (and I do so hope that we will play hardball in equal measure) Berlin will have something to say about it.

The answer for UK businesses, large and small, right now is to tool up ready for the Brave New post-Brexit World. Train our people better (and schools could help by making sure that after eleven years of free, compulsory and full-time education paid for by you and me, the product of our schools can read, write and count) and thus become more productive. Invest in better kit..... and don't stop! Get out there and forge new deals in new markets around the World. We are the only country currently in the EU that trades more outwith the EU than within it.......so let's make that count.

One bullet in the magazine we need in our fight for prosperity in a brutally-competitive, globalised economy is entirely down to us. No Eurocrat or protectionist Frenchman can be blamed for this one: productivity enhancement is essential. Output per hour worked or/and pound invested in our Country is not good; way behind the Americans and the French. The majority of the workforce is not skilled enough, the investing class are still too short-term in the expected financial return horizon, the fear of failure and tall poppy syndrome grips us like a social disease, there is a poverty of ambition 

In fact, for evidence you need look no further than the relentless gloom shouted from the rooftops by the Remoaners. We are not Norway for Godsakes! We are the most globalised trading Nation on earth. Believe it! But we MUST radically and swiftly pump investment into our physical infrastructure (to get our goods to market and our people to work more efficiently) and get the skills base up; the public sector would benefit from this just as much as the private sector and taxpayers would get more bang for their pound. But self-belief and fact-based optimism are essential ingredients too; and that brings us back to the here-and-now; get on with it Mrs May! Lead us! 

It may be an inconvenient truth Mr Farrand but when all is said and done, when the Judges and the Politicians have had their moment in the sun, it will all come down to Trade........and quite how we play our hand of cards from that deck (and how a revenge-thirsty Brussels plays its) will define what sort of Brexit our children and their children will inherit.