The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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Go Now: Call Brussels’ Bluff Leave the EU immediately and without a deal

1. Introduction

Despite Phillip Lee's last minute betrayal of the government, the House of Lord's amendment to the EU Withdrawal Bill was defeated by twenty-six votes on 12th June. Whilst there is doubtless some celebrating, Mrs May is still not out of danger – in fact, the dissention amongst a number of Conservatives would appear to be growing. The latest information suggests that Dominic Grieve (a former Attorney General) led the rebellion, which included other Ministers who are contemplating joining the rebels, in the hope of defeating the government (Rayner et.al., 2018: 10), and forcing a second referendum. The Bill returned to the Lords once more, where it was defeated on 18th June by 354 votes to 235, perhaps only to be expected – as the government (having won the vote) refused to consider the amendments proposed by the House of Lords. In the game of constitutional 'ping-pong', there is to be a second reading (vote) in the House of Commons tonight, and it appears likely that the government will lose. The amendment by the Lords basically states that, once an agreement has been reached (or it has proved impossible to come to any agreement), then parliament should be allowed a 'meaningful vote' on the final terms of our withdrawal (Swinford, 2018:1). It is difficult to see how this amendment might help the government and the country, yet easy to see how it would help the Brexit wreckers and Brussels. Suppose that 'no deal' was voted as being unacceptable to the UK parliament, would the government then be forced to return to Brussels and negotiate further? Judging by what has been said over the past months this is indeed the intention behind the amendment. If this were to happen, then Michel Barnier (the EU Chief Negotiator) and his team would be placed in an even stronger position than they are at the moment: they would face a UK team, knowing that the British (probably no longer led by David Davis), would have to offer further concessions, whilst they have never been instructed to do likewise by the EU Parliament. This could drag on for years, with each new concession to the EU being debated in parliament, and the UK government told to go back to Brussels and give more concessions, until such time as the government lost a vote of no confidence, and May were forced to hold a General Election. Brussels would have to do nothing, merely sit back and watch the UK destroy itself, and probably forget the whole Brexit referendum, or even hold a new referendum. This is, of course, what the Brexit wreckers want: it is noticeable that there is an emphasis on a 'no deal' outcome, yet their Lordships are apparently not concerned that any deal reached might not be acceptable to those who voted for Brexit. In effect, pro-Brexit MPs might feel that they need a 'meaningful vote' if we are not to remain saddled with the CU, or an extra 'transition period' before we finally leave. As far as this author is aware, no such consideration has been voiced by The House of Lords. As a body, the House of Lords has more in common with the EU Commission than they do with UK democracy, which might indeed explain why many appear happy to sabotage the Brexit process. In using their powers in this way, some members are displaying open contempt of the decision of the British people, and despite their protestations over democratic accountability, they may well find that this intervention is their downfall.

As pointed out recently (8th June 2018) by the Foreign Secretary Boris Johnson, there exists the danger that the Brexit 'negotiations' will end in the UK accepting what is generally termed a 'soft' Brexit. This could result in our being tied into the EU Customs Union (CU), still having to accept unchecked EU immigration (and quotas of illegal immigrants), remaining subject to EU law, and at the mercy of a wilful, anti-UK and vindictive EU Commission – headed by a resentful Jean-Claude Juncker, and the vitriolic Michel Barnier. In effect, we appear to be heading towards paying the EU a very large sum of money – purportedly some €60 billion (Foster, 2017) – to supposedly regain our sovereignty and control over our borders, and yet at the same time, being unable to actually leave the EU. Johnson described this as being "…locked in orbit around the EU…" (Rayner and Hope, 2018:1); perhaps a better description might be that by The Eagles in their song 'Hotel California': "You can check out any time you want, but you can never leave." As an editorial in The Daily Telegraph pointed out, normally remarks such as those made by Johnson would have been sufficient to require a resignation, yet the fact that he has been allowed to keep his Cabinet position reflects that he is simply saying what many believe (Editorial, 2018:17). Whether this is interpreted as a criticism of the Prime Minister or not is by and large irrelevant. Under such an outcome, one would be forced to ask why we voted to leave in the first place if vested interests can simply overturn the results of a democratic referendum? And that is the danger that the country faces - now, more than ever before, we are in need of by politicians who accept the outcome of the referendum, and whilst they may not necessarily support Brexit, under no circumstances should they oppose it. It is, after all, the will of the people.

The EU Withdrawal Bill is a crucial piece of legislation that must not be allowed to be destroyed by a group of ' remainers' (or 'remoaners' as they are increasingly called) who have tabled amendments that would destroy the Brexit process – which is, of course, exactly what they want. David Davis appealed to Conservative rebels not to accept the amendments, pointing out that they risk undermining the UK's whole approach to negotiations with the EU (BBC, 2018). However, this is apparently of little interest to those who remain opposed to Brexit: partisan politics, vested interests, personal greed, and a desire to hurt the government all appear to be derailing the process of leaving the EU. The Daily Telegraph editorial warned that Mrs May "… must reassure Brexiters that her government understands what is required to get the best deal from Brussels but also what the possibilities are for trade if we leave in the right way. The sense of drift must end. We are exiting the EU, but to what purpose?" (Editorial, 2018:17). The problem is, ironically, one that has been caused by inaction on the part of May herself. When she was first chosen to replace David Cameron, instead of immediately triggering Article 50, she dithered for some nine months, and in so doing gave the wreckers a chance to plot, and co-ordinate their activities; we are currently paying the price for May's initial inaction.

2. Brexit On Any Terms?

Whilst many people (such as this author), are concerned with getting the correct outcome (ie., we leave immediately, cutting all links with the CU and the EU judiciary, whilst at the same time ensuring that the 'reparations' paid to Brussels are as little as possible), many more people (both 'leavers' and 'remainers') are increasingly saying that regardless of the way in which they voted, they would now like to see the whole sorry process come to a conclusion as quickly as possible. Such attitudes have been in part shaped by the insidious undermining of government negotiations by ex-Prime Ministers such as Tony Blair and John Major, current politicians (Phillip Hammond and Dominic Grieve), failed politicians (Neil Kinnock), members of the House of Lords, and senior industrialists (both UK and foreign): all have had a highly negative influence on the negotiations that the government is forced to undertake, and their constant undermining of the Brexit vote does their personal reputations little good. The argument presented by many is that they do not want to stop Brexit, but wish to secure the best possible terms on which to base the UK's departure. Such protestations are believed by nobody: the truth is that they never wanted Brexit, but cannot oppose it publically, as it was a democratic referendum that reflected the way in which the majority of UK voters view the EU. The danger is that if the 'remainers' (or 'remoaners' as they are increasingly known) continue with their calls for a second referendum, and their attempts to undermine the government, then it is highly likely that Brexit will fail, and that anti-democratic interests (both domestic and foreign) will have been allowed to overturn the result of the referendum. This must not be allowed to happen, as it threatens the very basis of democracy in this country.

It beggars belief that the remoaners appear not to understand that every time they make public pronouncements against the government and the outcome of the referendum, the message heard by Brussels is that we are disunited, and can be bullied further over the terms of our departure. It is imperative that such people understand the meaning of the term 'democracy' - apparently politicians such as Blair, the current clutch of Conservative traitors and Labour opportunists - have conveniently forgotten this. The last UK election fought by Tony Blair (in 2005) saw Labour take power by 9,567,589 votes to the 8,784,915 polled by the Conservatives, giving Blair a majority of 782, 674 votes, on a 61.4% turnout of the electorate (UK Political Info, 2005). In the 2016 referendum, by contrast, the 'leavers' polled 17,410,742 votes, compared with 16,141,241 for 'remain' – a lead of 1,269,501 votes on a turnout of 72%. In other words, the referendum result was more decisive both in terms of numbers (1,269,501 votes as compared to 782, 674), and of those who actually voted: 72% as compared to 61%. In view of this, how people such as Blair can suggest a new referendum, is difficult to understand. A democracy cannot function in this way, otherwise after every General Election those who were unhappy with the result could call for a re-run. Blair was happy to accept the outcome of the 2005 General Election, yet moans about the outcome of the referendum, and calls on the electorate to 'rise up' against the outcome (BBC, 2017; Mason, 2017; Swinford and Watson, 2017). In his attempt to justify this, Blair claimed that "… the people voted without knowledge of the terms of Brexit. As these terms become clear, it is their right to change their mind" (Swinford, 2017:4). But, as Swift (2018) points out:

"By this logic, one could equally suggest that had people known Blair was going to involve the country in a war in Iraq if re-elected, would it have been appropriate to have re-run the 2001 general election as Blair made no mention of it in the Labour Manifesto, yet subsequently involved the country in a war in which hundreds of UK service personnel lost their lives."

Calls for the government to be open over its negotiation objectives are at best naive, at worst simply stupid: in such complex and important talks, it is imperative that Brussels remains unaware of the strategy that the government is enacting and the objectives it has set itself. To tell ones' opponents would be the height of folly. Yet this is what many remoaners are advocating. Have they never wondered why Brussels is not open in its strategy? The Brussels team have no intention of 'showing their hand' as to do so would put them at a disadvantage, so they say nothing, and as the EU Commission is effectively answerable to no-one, the likes of Michel Barnier can get away with such a dismissively arrogant approach, there being nobody to challenge his actions. The Commission does not have to consider questions of democratic accountability; the British government, by contrast, is accountable to Parliament, and the electorate, and as such cannot ignore the pressures placed upon it. It is under these constraints that the UK team of negotiators must operate. David Davis has to contend with the restrictions that the 'remoaners' wish to place on the government: it is akin to playing a game of poker, with your opponent being given details of your cards before the game begins!

Then we come to the actions of the House of Lords.Included amongst this erudite collection of unelected nobles are the likes of Peter Mandleson - who feels he has every right to frustrate the Brexit process; it is interesting to speculate as to whether his opposition is based on concerns for the future well-being of the UK, or on the £35,000 annual pension he receives in his capacity as a former EU Trade Commissioner (Swinford, 2017:4). The Liberal Democrat Lord Paddick complained that "...the British people did not know the full consequences of leaving the EU at the time of the referendum and they did not therefore make an informed choice" (Stone, 2017). This is true, but at the time neither the 'leave' or 'remain' side in the referendum debate could bring sufficient facts into their arguments, and as such the voters were treated to speculation and 'Project Fear.' Furthermore, it is difficult to recall Paddick contributing facts to the debate to enable voters to make an 'informed choice.' Paddick was, therefore, being more than a little disingenuous in his complaint. Baron Peter Hain admitted that "...despite being an unelected peer he has the right to force major changes to the Brexit Bill..." (Swinford, 2017: 4).No he does not. Some Lords oppose Brexit based on democracy: Lord Butler wanted to know why those "...who base arguments for Brexit on the will of the people are now opposed to consulting the people on the outcome of the negotiations..." Bogdanor (2017). An interesting argument, to which one might reply that when we were taken into the EU in 1973, there was no 'consulting the people' – this only happened some two years later, and was prompted by the then Prime Minister Harold Wilson's desire to neutralise the issue of membership of the EEC (as it was then).It would be interesting to find evidence that Lord Butler was given a seat in the House of Lords, based on the number of people who voted for him! It is richly ironic that this collection of unelected, unaccountable, and generally privileged people, feel that they have the right to challenge the government (and Brexit), citing democratic accountability as the basis of their challenge!

3. The EU Commission

To put no finer point on it, those who openly criticise the government, the Brexit process in general, and/or who call for another referendum, are aiding the enemy - in this case, the EU Commission, and the entire EU apparatus - and in effect are acting as a 'Fifth Column' for Brussels. In time of war, behaviour designed to undermine and weaken the position of one's own government is termed 'treachery', and such people would be accused of 'aiding and abetting' the enemy. Whilst the term 'enemy' might be regarded as an overly-dramatic exaggeration, the way in which Brussels has approached the two year negotiation period, places it squarely within the definition of an 'enemy'. According to the Oxford English Dictionary, an enemy is: "A person who is actively opposed or hostile to someone or something" (*). As this exactly describes the attitude and actions of the EU since the two-year 'negotiation' period began, it is not unreasonable to label the EU as 'the enemy.' In general the attitude of the EU Commission (as expressed through Michel Barnier) is vindictive, confrontational, hostile, and by no stretch of the imagination could be described as displaying a civilised approach to what is a process fraught with difficulty.

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(*) https://en.oxforddictionaries.com/definition/enemy

Brussels does not wish us to leave, but if we are determined to go ahead with this (in their view) 'folly', then they are equally determined to ensure that we pay heavily for the temerity of having openly challenged the vested interests of those who run (and personally benefit from) the EU. The Eurocrats who actually run the EU (as opposed to the MEPs) seem to ignore the fact that the decision to leave was a democratic decision, and as the EU purports to be a model of democracy, equality of opportunity, compassion and understanding, one might have expected more from them. Indeed, according to the EU's own website, it: "… supports democratisation and fundamental freedoms in partner countries, recognising the crucial importance of encouraging broad participation in political decision-making and local ownership of development processes." (https://ec.europa.eu/europeaid/sectors/human-rights-and-democratic-governance/democracy_en). Given this declaration of intention, one might have expected that, whilst perhaps expressing their disappointment at our decision to leave, the EU decision – makers would have done all in their power to make our departure as painless as possible. However, as events over the last eighteen months have shown, the opposite is true, and we have become increasingly exposed to the EU in its true colours – which do not make for a pretty sight. Not only has the EU Commission proved uncooperative and unhelpful, but it appears to have deliberately gone out of its way to make the process of Brexit as difficult, painful, degrading, divisive, and expensive as possible.

This is undoubtedly a reflection of their intense annoyance at our decision to leave, which has two very important consequences for the remaining EU member states: (1) it will mean that the inflated and wasteful EU budget loses a major contributor in future, and (2) it will show the growing numbers of anti-EU voters in countries such as France, Italy, Sweden, Austria and Hungary, that there is life after the EU. This latter point is what worries the Eurocrats most: if what the UK has done is allowed to go unpunished, then the break – up of the entire EU could easily result. This, in turn, would result in the loss of thousands of highly-paid jobs, many of which also attract lucrative expense accounts: they are worried and feel cornered – and the only thing they can do is lash out at the cause of their unease – the UK. As the ex-President of France, François Holland said about the UK vote to leave: "There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well..." (Foster and Day, 2016: 18). More recently, in response to the new populist Italian government that has threatened to vote for wide-ranging reform throughout the EU, Juncker is reported to have said: "I expect Europe's politicians to stand in the way of populists. Otherwise populism threatens to destroy our Europe" (Squires and Crisp, 2018:12).

The likes of Juncker cannot (or will not) see that in a modern democratic society, functionaries such as himself are paid to carry out the wishes of the people they purport to serve. Janet Daly, writing in The Sunday Telegraph pointed out: "You might have thought that the European Union would at least have thought of reforming itself. Given that so many problems which it finds infuriating – Brexit, the Italian election debacle, the rebellions in the Eastern bloc over migration, the rise of antagonistic populist parties – all come down to the same complaint, that the EU Commission is seizing too much power…" (Daley, 2018: 3). It was, therefore, inevitable, that control by Brussels (based on centralised absolutism) would eventually clash with populist governments such as that of Italy – or countries that expressed a desire to leave the project altogether. Daley went on to point out that the fact that such governments were democratic "…was thought to have little redeeming value since, left to their own parochial inclinations, electorates had shown an alarming tendency to vote for the wrong people" (Daley, 2018: 3). What better illustration of the complacency, arrogance, and anti-democratic attitudes that pervade Brussels could one find? Juncker is scared that populism will topple the whole corrupt EU edifice, and bring down him and his well-paid cronies in the process. Rather than seeking to address the complaints, in a breathtaking display of arrogance and complacency one un-named EU diplomat (referring to the recent pronouncements by the newly-elected Italian government) was quoted as having asked: "When was the last time an Italian politician kept their promises?" Obviously the implication is that Italian politicians are incapable of following rhetoric with action or even that they tell lies for political gain – an arrogant assumption to say the least, and whether such an assessment is deserved or not, it little beholds EU diplomats to comment on the supposed mendacity of Italian politicians, when Juncker himself is on record as having admitted that he tells lies: in an interview in 2011, he admitted that, if things become serious "... we have to lie. The same applies to economic and monetary policy in the Union, I am very serious about it" (Pop, 2014).

That Brussels should apparently dismiss the outcome of a democratic referendum should come as no surprise to those who have studied the corrupt, anti-democratic, and opaque way in which Brussels has functioned over the last sixty years or so. The EU (generally through the Commission) has deliberately kept the peoples of Europe in the dark as to their ultimate intentions - the formation of a United States of Europe. Furthermore, there has been a long-term strategy to undermine national institutions - such as national parliaments, legal systems, diplomatic representation, educational provision, and defence. As Margaret Thatcher pointed out in her famous Bruges Speech in 1988: "We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level" (Thatcher, 1993: pp.744-745).

4. Trade Outside the Customs Union

The question of international trade seems to exercise the minds of remoaners far more than one might have anticipated, as it is being used as an easy way of persuading people that they were wrong to vote to leave, as they will suffer economically. In effect, it is a re-run of 'Project Fear'. In view of the importance attached to international trade, however, it might be useful to briefly examine some of the claims and issues that surround it.

Currently, as a member of the EU, the UK enjoys unfettered access to the Single European Market (SEM), through the EU Customs Union (CU). Although it is true that this provides a ready (and easily-accessible) market for UK goods, the regulations and external tariffs under which it operates make the EU increasingly uncompetitive in non-EU markets. So much so that Lord Bamford (Chairman of JCB) is of the opinion that "...the cost of European regulations to business is so burdensome that even leaving the single market would be a 'price worth paying' to escape the EU diktat" (Editorial, 2016: 25). The downside of remaining within the CU (as some remoaners have suggested) is that the UK would be prohibited from making bilateral trade deals with third party countries – all such trade deals are decide on and negotiated by Brussels, and have to apply equally to all member states, regardless of any special relationship they might have with any other country. One of the key objectives of leaving the EU was to free us from control of external trade by Brussels, and so to maintain membership of the CU would defeat the objective of having decided to leave in the first place. As Boris Johnson explained: "Unless you have the guts to go for the independent policy, you're never going to get the economic benefits of Brexit" (Rayner and Hope, 2018:1). Thus, we must have trade independence, yet at the same time we still wish to retain our membership of the CU: Brussels say that this is impossible, but they are trying to force our hand, and hope that if we wish to retain CU access, then we will come to the conclusion (however reluctantly) that to do so requires staying in the EU. This, of course, is nonsense: currently Norway, Iceland and Liechtenstein have access through the CU to the SEM, yet none are members of the EU – this is the so-called "Norway Model." Furthermore, this author claims that the EU will eventually be forced to offer us a free trade agreement, for two major reasons: the 'divorce' payment and secondly, the EU-UK trade balance.

The 'Divorce' Payment

In the event of no agreement over our departure, the €60bn referred to previously would obviously not be paid, as it forms part of an agreement that would never have been ratified. This would mean that the money could be used in a variety of ways, from giving subsidies to agriculture and fisheries, to funding the provision of market research abroad to scope out possible new markets. It could contribute towards the NHS, or any of a number of other sectors of the economy, such as education. The lack of this 'reparations' payment would hit the EU hard, as they have deliberately tried to extract this exorbitant sum from us to allow them to continue to fund their overblown expenditure over the next few years. They could cut back significantly on expenditure by, for example, closing the EU Diplomatic programme – known as the European External Action (EEA) service, which in December 2013 had some 140 diplomatic 'missions' throughout the world, at an estimated annual cost of around £240 million (Mendick and Malnick, 2013). Since then, it is likely that the budget for this unnecessary EU appendage will have increased. The 'Divorce Payment' is a major bargaining tool that we have, and we should only be prepared to pay once a new free trade deal has been signed with the EU. Finally, it is to be hoped that this outrageous sum if paid, will not be paid all at once: payments (if appropriate) should be made to the EU over a period of say 2-3 years, and instantly withheld if the EU appears to be reneging on the free trade agreement.

The EU-UK Trade Balance

Despite claims by 'remoaners', the EU is not our largest foreign market – the number one export destination for UK goods is the USA, both in terms of volume and value: we sold US $ 60.4 billion to the USA in 2016 - representing 14.8 % of our exports, by value (Workman, 2018). As was pointed out by the UK ONS 'Office for National Statistics', in 2015 "…44% of the UK's goods and services were exported to the EU, while 53% of our imports came from the EU. In the same year, UK exports to the EU were valued at £223.3 billion, while UK imports from the EU stood at £291.1 billion" (ONS, 2015). This perfectly illustrates the problem that faces EU exporters to the UK: the imbalance of trade which, under normal circumstances would be to our disadvantage, now appears to be a strength in the current negotiations. If we were to leave the EU without having come to any agreement over trade, we would lose tariff-free access to the SEM and CU, which would mean that commercial relationships between the EU and the UK would be based on World Trade Organisation (WTO) guidelines. This would basically mean that trade would be conducted through the imposition of import tariffs, customs inspections, and increased paperwork and bureaucracy. This is a scenario that is wanted by nobody in business, and UK exporters legitimately complain that they would be hampered by a lack of 'free trade'. UK firms do not want tariff-based trade - according to Enterprise Nation, which represents around 71,000 small businesses:

"Small firms don't want borders and time-consuming border checks. Hold-ups at borders could be disastrous for British food producers, for example, with products with a short shelf-life. For those operating in a world where we expect orders to be fulfilled very quickly, border checks would put them at a big disadvantage. Staying in the single market, would mean less bureaucracy to worry about — like different VAT regimes or import duties" (Wasik and Gordon, 2017).

The Federation of Small Businesses, however, could see both sides of the argument:

"We would be deeply concerned about the impact on small businesses of leaving the customs union. Having said that, we recognise there are potential longer-term opportunities that leaving it could bring in terms of making trade deals with countries outside the EU" (Wasik and Gordon, 2017).

EU exporters also want free trade with the UK: the boss of BMW said that a free trade deal was essential for both the British and German car industries; he said: "What is clear is we need free trade. We can't invest into the future if you don't have any free trade agreements. If everyone plays hard it will be difficult; if there is nothing, then probably both sides would lose" (Collingridge, 2017).

Furthermore, whilst neither side wants future trading relations to be based on tariffs (with all that this includes) at the national - as opposed to individual company - level, the motivation for EU exporters to agree a free trade agreement is even higher than it is for our exporters; a consequence of the imbalance of trade, as the EU sells far more to us than we sell to them. Bearing this in mind, and viewed through the lense of reciprocity, it is in the interests of EU exporters NOT to become involved in a tariff war with the UK, as this would have the immediate effect of making all EU exports more expensive. For example, German cars would be suffer an increase in retail price if the tariff cost were passed on to UK consumers, which would be of great benefit to UK and Japanese producers, who might be able to persuade domestic UK customers to switch brands. For BMW, the UK is their second most important foreign market, at 9.8% of foreign sales – only behind the USA (14.4%) and the home market of Germany itself (12%). Added to this, we should consider UK sales of Mercedes, VW, Audi and Porsche, and the value of the UK market becomes apparent. Thus, it is immediately apparent that the German car lobby has a great deal to lose in a tariff war with the UK, and would undoubtedly pressurise Chancellor Merkel (whose government is currently in trouble) to broker a free trade deal with the UK.

The top two export markets for our most successful vehicle manufacturer (Jaguar Land Rover – JLR) in 2017 were China, where the company sold 146,400 vehicles (an increase of 23% over the previous year), and the USA, where 128,100 vehicles were sold – an increase of 9% in the same period (Tovey, 2018). The same source noted that in Europe, sales of JLR vehicles were some 138,000 for the same year; Europe (which includes the EU and other European countries) is only third in terms of importance to exports. Another source quoted the sales and marketing manager as explaining that "…the world is not just the UK and Europe…." JLR export around 80% of their UK production, and some 80,000 vehicles are produced in China, in addition to "…5,000 vehicles a year in India and 7,000 in Brazil" (Massey, 2018). Thus, the major UK car producer is already looking to non-EU markets, having identified the potential in the growing markets of China and India.

Aside from cars, imports of food and drink would be hit: once again, the EU exports far more to us than we do to them, making for a highly-damaging trade war. We import French wine, cheese, butter, jam, fresh fruit and fruit juices – despite the fact that UK farmers are desperate to sell more to the UK consumer, but are largely undercut in price from the heavily-subsidised EU farming sector. Whilst the author would be amongst the first to attest to the high quality of wines from Spain, France, Italy and Portugal, it is also true that wines of equal quality come from Argentina, Australia, California, Chile, New Zealand, and South Africa. Following our departure from the CU, it is highly likely that that we could negotiate even lower tariffs on the importation of wines from such areas. Currently, Australian wines attract an import tariff of between €0.131 and 0.209, depending on the strength of the wine. This is levied under the EU Common Customs tariff (AGWA, 2017: 3). However, once we are free to enter into bilateral negotiations with the Australian government, there exists the possibility that this tariff payment could be reduced, or scrapped altogether. As "Wine Australia" pointed out, there are other dangers for EU exporters, as the EU referendum revealed a "…distinct animosity towards all-things European and this sentiment could well play into wine buying habits – especially if the E.U., in particular the French and the Germans, are seen to be punishing the U.K. for leaving" (Wine Australia, 2017). UK consumers could well reject EU produce in its entirety, opting instead for substitutes from non-EU countries. Tropical fruits can be sourced from the Americas and Africa – again, without the forced imposition of EU tariffs; many foodstuffs can actually be grown in the UK, it is simply that EU exporters can produce them more cheaply, and consequently UK growers have not generally considered investing in polytunnels. In future, however, with the possible imposition of tariffs on imported fruits and vegetables, coupled with a reduction in cheap seasonal labour supply from the east of the EU, growers may be forced to radically review their growing and harvesting strategies. Moreover, prices of food imports are currently a consequence of the Common Agricultural Policy (CAP) subsidies, and our departure from the EU should provide funds to help (at least initially) UK producers. As a report by the Dutch Wageningen Research Institute concluded: "The UK currently contributes an estimated €7.9bn to the CAP budget, from which its farmers receive €3.8bn." (LEI, 2016:43). Thus, by not contributing to the wasteful CAP, and using the money saved, UK agriculture could be approximately €4bn better off.

Furthermore, the EU represents a very small percentage of world market demand – larger markets are to be found in Latin America, Asia, Australasia, and Africa. Continued CU membership prevents us from establishing new, more lucrative deals with other nations. When non-EU countries trade with the EU they are subject to a common external tariff – this means that the EU decides on the tariff charged for, say, imported wine from Australia, and this must be applied by the importing EU country. This is despite the fact that it might be possible for an EU member state to reach a bilateral agreement with a non-EU state: Brussels regulations relating to international trade prohibit individual states from making any such bilateral arrangements. The claim made by EU negotiators (and supported by remoaners) is that if one wants a free trade deal (to remain part of the CU and SEM), then freedom of movement is still required. This is a red herring, as a deal can be anything to which those involved agree. To arrive at a free trade agreement, why does the EU Commission insist that we have to remain part of the current CU and SEM? There is no reason why a separate free trade agreement cannot be drawn up between the EU and the UK, one that functions in addition to current arrangements. Erixon (2017), for example is confident that some form of free trade deal can be negotiated, as "…neither side can afford to throw away huge volumes of trade." Such a deal must ensure that the UK remains outside the CU, and is therefore, free to negotiate its own deals with third party countries. This is the sort of trade deal that we can expect to see – but one that will not be agreed until the very last minute, as Brussels feels they have us 'on the ropes' and will continue to press for more UK concessions until the last minute. Despite the protestations of Merkel and Juncker, it is perfectly possible to agree a trade deal that allows EU-UK free trade, and permits the UK to develop its own independent bilateral arrangements with non-EU markets. It is the unelected EU Commission, rather than EU industrialists, who are blocking this option, and they are doing this for political rather than commercial reasons. However, if the government keeps its nerve, and makes no trade concessions, Brussels will be forced to find a way out of the impasse at the eleventh hour. They cannot afford not to; by contrast, in addition to the advantage that our trade imbalance with the EU gives (discussed earlier), the UK has truly global trading connections and experience. We can afford to leave without a deal, and should do so, as this will give us another 'bargaining chip' – the so-called 'divorce payment'

5. Conclusion

The real question that the EU should ask itself is whether it can survive in the event of a 'no deal' outcome of negotiations with the UK? No deal (generally referred to as a 'hard' Brexit) would present problems for both the EU and the UK. A 'no deal' would place EU exporters to the UK at a financial disadvantage (compared to UK exporters to the EU), and they would suffer comparatively more that we would. Whilst the imposition of tariffs would hurt both sides, we should always remember that the EU needs us far more than we need them, and all that is required is to keep our nerve and refuse to budge. They will give in eventually, and offer us some form of 'free market' deal which means that both EU and UK exporters can trade freely, whilst at the same time the UK can develop foreign trading relations as it sees fit.

The government must, therefore, actively encourage preparations for a 'hard' Brexit, and be prepared to walk out of negotiations. Our best allies are EU exporters who would find it hard to replace the UK as an export destination: by pointing out the economic realities of international trade, they will eventually put pressure on the Eurocrats. Mrs May said some time ago: "No deal is better than a bad deal." It is to be hoped that she really meant this, and is prepared to carry through her argument. As Swift (2018) warns:

"In the final analysis, if the UK does not abide by the results of the most important referendum since 1975, and take us irrevocably and immediately out of the EU by 31st March 2019, whilst at the same time ensuring that we do not have to pay billions in what is effectively EU blackmail, then democracy is lost. To hold the government accountable to the will of the people is surely the essence of democracy?"

References

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Foster, Peter and Day, Matthew (2016) "EU 'must stand firm against UK demands.'" The Daily Telegraph (8th October), p 18

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Two years on from the EU referendum victory
The EU’s influence on UK energy policy
 

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Monday, 23 July 2018

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