Brexit for Dummies

7 mins. to read
Brexit for Dummies

A missive through the letterbox from Jezza & Co. I had supposed that Mr Corbyn had gone on holiday, so little have I heard from him during the referendum campaign (and at his age, that would have been quite understandable). But no, the Labour Party has been up all night producing killer arguments for – not REMAIN, but – LABOUR IN. As regular readers will know, I am not a Labour natural; but I do sometimes try to see things through the eyes of my staunchly Labour grandfather. So I sat down and read…

Labour IN for jobs. British jobs would be lost if we left the EU. 3 million depend on trade with Europe – we need to stay to protect working people and vital industries, like manufacturing, which sell their products abroad.

Is Labour saying then that, post-Brexit (which would not be earlier that two years from an OUT vote), ALL trade with the EU would cease? At the last count about 45 percent of our exports went to the EU. That’s a lot: but the idea that, for the first time in 3,000 years, we would stop exporting British woad and importing Saxon amber – even if tariffs were imposed on both sides – is surely barmy.

And let’s talk about “vital industries”. A lot of us believe that if we had had the power to impose tariffs on Chinese Steel, then the Tata steel plant in South Wales would still be in robust good health.

Sir James Dyson got it right in an interview with The Daily Telegraph[i] recently when he called this line of argument absolute cobblers. We are running a trade deficit with the EU in the order of £100 billion a year. And if they were to impose a 10 percent tariff on our imports we would impose a 10 percent tariff on our imports from Europe. That would net UK PLC some £10 billion a year – which we could use, mutatis mutandis, to reduce VAT. Though, in point of fact, the weighted average import duty imposed by the EU on countries outside the single market is more like three percent.

True, our exports might be less competitive in Europe; but so would their imports here. So there would be an import substitution effect. I wrote recently about the Kent winemaker, Chapel Down. For myself, I’d love to see an excise regime that favoured English wine, which has a very bright future. That could benefit British jobs.

As for trade deals with India, China and the United States of Back-Of-The-Queue, well I hope you read my colleague Adrian Kempton-Cumber’s article last Friday. Adrian pointed out that New Zealand has trade agreements with all these countries. In extremis, we could drop-ship all of our trade with Back-Of-The-Queue through New Zealand brass plaque companies. I’d be happy to let the Kiwis skim one percent off each deal. That would be pay-back for having screwed them back in 1973. For this idea alone, Adrian should surely be reclining on the plush red leather benches of the House of Lords…

Labour IN for rights at work. Our rights at work like paid leave, equal pay, maternity and paternity leave and protections for agency workers are guaranteed by the EU. {PHOTO: woman with large bump at computer screen – no head}.

I worry for New-Old Labour (as I call them) if their self-esteem is so low that, nearly 125 years after the British Labour Movement was founded, they attribute all the gains in work-place rights in the UK, not to successive Labour governments, but to a tribe of paunchy Eurocrats who dream up directives over a second bottle of Chateau Pétrus’94. No mention also that the Minimum/Living wage here at £7.20 an hour is more or less the highest in Europe.

There is also a fundamental misunderstanding of how EU directives are enforced. All labour legislation is actually passed by the British parliament – though, decidedly, it is supposed to conform with EU directives. There is no reason at all why a government presiding over Brexit would want or need to change labour laws unless and until it decided that it would be desirable to do so. For example, it might be necessary to loosen some of the strictures of the EU Working Time Directive. But, in order so to do, any such legislation would have to pass through the British parliament.

It is typical of New-Old Labour that it trusts Brussels more than Westminster. I actually heard Chuka Umunna – often mooted as a future leadership candidate – describe the European Parliament as more democratic than the House of Commons (because it is elected by proportional representation). The only problem is that Members of the European Parliament (MEPs) can’t vote on legislation: it is handed down by the EU Commission. They just talk. More democratic?

Anyway, call me old-fashioned, but I still reckon that the greatest right that a worker can have is the right to work. All these directives on work-place rights are not much good to you if you don’t have a job – like 25 percent of all Spanish workers and 50 percent of young Greeks. It might have been appropriate for Labour to have compared unemployment rates across the European Union before handing out this guff. Because they would have found that the UK scores best. And why? Flexible labour markets, of course.

When you drill down into what socialists mean by workers’ rights it almost always comes down to the ability of powerful labour unions to preserve their privileges in a changing world – just look at the resistance of the CGT towards quite trivial labour reforms in France. With the result that other unprivileged working people are thrown on the scrap heap.

Labour IN for the NHS. Leaving the EU would hit the economy – even the Leave campaign admit this is the case. This would mean less money for the NHS…

I have been one of the Leavers who have argued that we shall have a period of turbulence until the shape of the new dispensation becomes apparent. Meanwhile, I would just point out that, while Mr Osborne has made mischief by threatening punishment budgets, the national finances are declining anyway. IN or OUT, he is unlikely to balance the books by 2020, given that growth is slowing, spending is still out of control and we are probably due for another cyclical recession sometime soon.

I could venture that the current level of (EU and non-EU) migration is putting further strain on the NHS – but I shan’t. The NHS will continue to be under strain whatever happens – as long as it is politically impossible to contemplate structural reform. One of my themes in the second half of 2016 will be that, fortunately, the up-coming generation of tech-savvy kids will want to take control of their healthcare with robot doctors and health data monitoring – but all this is not even on Jezza’s radar,

Labour IN for lower prices – holidays, cars and the weekly shop are all cheaper because we are in…

Sorry, Jezza. Holidays, cars and the weekly shop are all cheaper because the internet has bought about incredible efficiencies in production, distribution and exchange. And by the way, the European budget airline du jour is Norwegian Air – domiciled outside the EU. The price panic has come from a report by USDAW, the shop-workers’ union. The key assumption here is a 20 percent fall in the value of the Pound – which, as I have said, could happen temporarily (though I doubt it). As for food prices, they might medium-term be cheaper if a future UK government decides to support farming more generously than Brussels. No sane government will put up barriers where they are not needed.

Anecdotally, it’s your own core support base, Jezza mate, which is most sceptical about Europe – and the main reason, for better or worse, is immigration. Smug, middle class Labour, of course, disapproves. One of the most nauseating things about this entire referendum process has been the sound of Polly Toynbee, Owen Jones, Paul Mason and Billy Bragg telling working-class people why the Leave campaign has nothing to do with them. But I think they’ve been rumbled.

On Monday the Pound surged as Brexit looked less likely and it has continued to rise this morning. But hang onto your hats. One thing is for sure: if the Pound falls on Friday, the Euro will start to plummet on Monday as the markets realise that Brexit is Europe’s problem too…

As the Chinese curse goes: May you live in interesting times.

[i] Interview with Allison Pearson, Daily Telegraph, Saturday, 11 June 2016, page 13.

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