Tel. +44 (0)20 7287 4414
Tel. +44 (0)20 7287 4414
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.
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.

Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Lest We Forget

For centuries, wool was the mainstay of our economy; so vital that Edward III ordered his Lord Chancellor to sit on the woolsack. Export of raw wool financed trade and new towns. Flemish and Huguenot weavers fleeing European persecution added their skills. By the 16th century, English cloth dominated European markets. It provided the trade good used by merchants as they opened new markets. From Russia to the Americas and the Orient, English cloth was the driver of a trade revolution universally acclaimed for quality, a reputation that lives on in the name of Spain's biggest department store: El Corte Inglés.

The textile industry was the midwife of the industrial revolution. New production processes demanded new power sources. Steam largely replaced water, and metal replaced wooden frames. Canals were dug and railways built to move raw materials and finished goods. Increased production required imported raw materials from the USA and empire. Supply lines, protected by the Royal Navy, ensured raw materials arrived just in time to feed the mighty mills. Industry, coal, steel, shipbuilding and insurance all flourished as Britain created the modern world.

Traditional industries declined after WW1. For example, textile production peaked in 1926. New industries, including motor vehicle, airplane, motorbike and chemical production arose. This process interrupted by WW2, resumed in the 1950s. As old industries withered and died, managers, politicians and unions fought rear guard actions to preserve them. Despite huge subsidies, they died anyway. Many of our current industries had not been thought of until after WW2. Now, technological developments create a giddying array of potential new businesses almost daily, but with each change, neo-luddites rage against progress and claim the world will end without their businesses or jobs. They deny reality. Up until the start of the 20th century, textiles were a major contributor to GDP and employment. Now, the massive mills are silent, the workers employed elsewhere. Coal, steel, shipbuilding all then essential, but now essentially replaced.

This denialist bleating is reaching a crescendo as EU exit day nears. Car manufactures threaten to move as does Airbus - again. According to the sirens of EU integration, abandoning Brexit will guarantee the future of these industries, but what is the evidence for that assertion? The idea that global businesses show loyalty to a country or region is dangerously naïve. For example, the Renault-Nissan group (RNG) claims that anything other than the status quo will lead to decline and withdrawal from the UK, yet, while France is not leaving the EU, both RNG and Peugeot (PSA Group) have shifted major production processes to North Africa! RNG has even moved some Dacia production there from Romania. The reason is simple: wages in the region are lower there than anywhere in the EU. Recent figures for car firms' monthly labour costs are: France €5,890; UK €3,792; Turkey €925; Romania €950; Morocco €350. Lower wages mean lower business costs. North Africans are literally cheaper than the robots used to make cars in the EU. Much of European automotive wiring harnesses are now made in non-EU North Africa. Note, this does not seem to be an issue in the 'Just in time' system deemed so vital in Theresa May's negotiating strategy.

Japan's ambassador, Koji Tsuruoka, warned that firms might leave the UK if a bad Brexit deal left them unprofitable. Truth to tell, if it is more profitable to conduct business outside the UK or outside the EU, a business will leave anyway, and this is an attitude not restricted to the auto industry. HP sauce and Cadbury's production leaving the UK are examples. There are many more. In the finance industry, some claim a catastrophe awaits us 'locked out' of the EU when, in fact, it is the EU's services single market that is incomplete without the UK!And if the finance industry is more profitable here then, after Brexit, it will die away in the EU in the same way that industries have died when and where they were no longer profitable.

Peter Drucker, the management guru, said, "The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday's logic." Currently, those who cling to yesterday form a disparate troika:

  1. John Mc Donnell, a Marxist, is typical of those who dream of worker control: union barons once again entertained in Downing Street as they dictate our future.
  2. Fanatical followers of the EU theocracy sacrifice economic common sense on the altar of political integration.
  3. Corporations, whose managers' vision seems limited by the next bonus. Kowtowed to by supine politicians, afraid to lead, afraid to let go of nanny's hand.

This flock of Ostriches is blind to the reason for the mill owners', mine and steel bosses' and workers' downfall, and clinging to what might have been, paralyse the present and sabotage the future. As Yogi Berra put it: "It's déjà vu all over again."

In 1841, agriculture and manufacture accounted for 58% and services 33% of our economy. By 2011 it was 10% and 81%. The UK has always been entrepreneurial. Bonaparte missed the point when he called us a 'Nation of Shopkeepers.' Throughout our history, we have been the great adapters. Shut out of European markets, we created new ones and became so successful that we invented the industrial revolution to meet the demand! We survived and prospered because of a determined can-do attitude. Indeed, when Europe turned against us we embraced the world and prospered even more. Watt, Stephenson, Brunel and other great pioneers would not have sneered at Boris island or the building of a bridge to Northern Ireland. They would have formed a company and raised money to build these. Innovation is in our genes. Timidity and self-interest are not.

The troika would have us tied to a political institution that uses protectionism to promote its aims. Protecting inefficient farming increases EU food costs by about 17%. French farmers alone receive €11 billion in EU subsidies while our trade with the EU grows at 1% per annum and the importance of the EU as a market falls every year. Trade with the rest of the world (on WTO rules) is growing at close to 3% pa.

The Single market for services is incomplete which leaves us currently at a disadvantage that in 2017 resulted in a £67 billion deficit. A dispassionate observer would question the sense of membership. When only 6% of UK companies trade with the EU producing 12% of GDP, it defies reason that those representing 88% of our GDP should be hamstrung; locked into a failing political experiment.

Shakespeare's wrote:

There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune.

The Troika sits ostrich-like, engulfed by denialism as the tide rushes past.

However, some are catching that tide. Alexander Dennis, the bus and coach manufacturer, won a contract to supply the city of Berlin with buses. The contract is potentially worth €220 million. Interestingly, the firm's main export markets are WTO ones: Canada, China, Hong Kong, Malaysia, New Zealand, South Africa and the United States.

According to the World Economic Forum's 2018 report, the UK's Drivers of Production places us fourth in the world to benefit from the Fourth Industrial Revolution, ahead of any EU member state. We have leading pharmaceutical companies. British engineering dominates Formula 1. We are world class in many areas: the Arts (Music, TV, and Literature), Education, Medical Research, Financial Services and Law; Aerospace Technology, Artificial Intelligence, Electronic systems, Fashion and high quality textiles. This list is by no means exhaustive. Digital technology - the new kid on the block - is already worth £184 billion and is growing three times as fast as the economy. The sector in London is rated third in the world. The nearest EU competitors are Berlin at seventh and Paris at eleventh. Successes in these sectors have a common denominator – excellence; the quality that ensured British cloth dominated the world.

The world is waiting for us to re-join it. Our biggest trading partner, the USA is to the fore. Robert Lighthizer the US Trade Representative has advised congress:

We intend to initiate negotiations with the United Kingdom as soon as it is ready after it exits from the European Union on March 29th, 2019. The US and the UK are the first and fifth largest economies in the world, respectively, and maintain a broad and deep trade and investment relationship

and seeks

an ambitious trade agreement. ……Developing cutting edge opportunities for emerging sectors where US and UK innovators and entrepreneurs are most competitive.

This is not a time for timidity. We have a simple choice. Rediscover our inventive, mercantile roots and take the flood tide to a vibrant economic and democratic future.

Or accept Chequers and become the EU's Puerto Rico.

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Contact us

Director : Robert Oulds
Tel: 020 7287 4414
Chairman: Barry Legg
The Bruges Group
246 Linen Hall, 162-168 Regent Street
London W1B 5TB
United Kingdom
Founder President :
The Rt Hon. the Baroness Thatcher of Kesteven LG, OM, FRS 
Vice-President : The Rt Hon. the Lord Lamont of Lerwick,
Chairman: Barry Legg
Director : Robert Oulds MA, FRSA
Washington D.C. Representative : John O'Sullivan CBE
Founder Chairman : Lord Harris of High Cross
Head of Media: Jack Soames