The voices of Brexit-backing entrepreneurs must be heard over the din of rent-seeking Remainers

The voices of Brexit-backing entrepreneurs must be heard over the din of rent-seeking Remainers

One of the most cheering things about Vote Leave’s winning the referendum was how, over and over again, we won the solid arguments. Remainers love to push the foolish conceit that the vote to Leave was a result of lies compounded by an unholy nexus of little Englanders, far-right lamentables, disaffected Labour voters, whatever.

In reality, it was fascinating to see, for all of us who engaged in debates and other forums, how over and again, we won with substantive arguments: arguments on cost, on taking back control, on how the economy could perform in a reformed UK outside the EU. I did not attend one debate where, when a vote was taken both before and at the end of the debate, there weren’t more people saying they would vote to Leave at the end, than there were at the beginning of the debate – and fewer saying they would vote to Remain.

What was also apparent was how on the economy, the (now increasingly discredited) arguments to Remain were mostly put forth by the Corporate Welfare mob – the rent seekers; those who believe that the best way to move their organisation forward is to cosy up to the government and extract favourable terms and conditions which will allow their organisation to do better than their (often smaller, usually more innovative and forward-looking) competitors.

One almost felt sorry for David Cameron, George Osborne and their civil servants and Treasury officials: they were in a vast echo chamber where large companies forecast woe and American and other investment banks, at the same time as donating 7-figure sums to the Remain campaign, assailed them with forecasts of immediate job losses and threats to move their operations to the Continent (note: employment in the City up 17% in the year since the referendum result); and where the CBI poured further tales of imminent woe into the government’s ear (Brussels was, it became known, most likely the CBI’s largest donor over recent years).

Corporate Welfare comes, of course, in more than one colour; it’s not just money, or favours, or deals (with government expenditure now over 40% of GDP, there are an awful lot of rent-seekers jostling for favour with the government and willing to adopt what they see as the approved government line, in order to make sure they are not summarily dumped from any contractors’ list). It’s also, as we saw to our disgust after the referendum, the opportunity to get a nice gong and prefix to your name. The would-be beneficiaries of Corporate Welfare are numerous and were a strikingly large and visible portion of those businesses who weighed in on the Remain side.

Of course, we want all British companies and employers to do well, to bring home the bacon of the Brexit Bonus for the economy and for the people of the UK. But, are the rent seekers the ones whose welfare the government should primarily be desirous of? Well, no: as we all know, the large corporations, the FTSE 100 companies, the large banks, on average are not the ones who grow the economy and grow employment. Financial services had, by 2016, shrunk to 7.2% of the UK economy from 9.1% before the great recession. The City grew again in 2017, and it’s an important part of the economy, but it’s unlikely to be where the big job growth will come from over the long or even medium term.

A large corporation usually grows exogenously, by merging with another company, or buying a smaller company. The company’s total number of people employed has as a result grown, but in fact there are almost always redundancies as a result of the merger or the acquisition, so that the economy as a whole has lost jobs. Numerous academic studies have demonstrated this. It’s not a controversial thing to point out. New endogenous employment comes from the entrepreneurs: the SMEs, the individuals who have staked all on starting up a business, the scientists who drop out of university to pursue their dream of a new technology. Overwhelmingly, these entrepreneurial classes were in the Brexit camp.

Now, here’s the problem: entrepreneurs aren’t particularly interested in currying favour at 10 Downing Street or with DExEU. They’re too busy gritting their teeth and struggling on with the difficult job of getting their companies to success, and growth. The majority of new companies fail; no entrepreneur wants to be in that losing group. Many of you reading this piece are the ones who are going to grow the economy in the coming years. For many of you, the referendum was a once-in-a-lifetime moment where, in addition to all your hard work building your part of the economy and creating jobs, you stepped into the argument – whether as part of the Business for Britain organisation, with its signatures of one thousand CEOs and entrepreneurs appearing in newspaper advertisements, or in some other way. Well done.

The risk, however, is that you have now turned your ‘swords into ploughshares’ and have gone back to building your companies. Well, the bad news is that by doing so, you may be risking our losing the ‘Best Brexit’. Have you seen the reports of dinners at Downing Street, tea parties at Chevening? Have you looked at the list of who turns up for those meetings? Those who do are overwhelmingly those same rent seekers that originally moaned about the catastrophes that would come our way after Brexit. Many of them are throwing as much sand into the machinery as possible in order to make the eventual Brexit outcome look as startlingly similar to staying in the EU as can possibly be managed. (In this, as with the referendum result, they are in the minority. Over two thirds of UK voters not only now favour so-called ‘hard Brexit’, but also agree that ‘no deal is better than a bad deal’)

Talks of ‘transition’ disguise a hunger to put the moment of truth off as long as possible, perhaps (listening to HMV James Chapman’s shrill jeremiads on the Today programme, and his former master George Osborne’s equally batty disaster predictions in the Standard), hoping to avoid for as long as possible the moment when their complete discredit arrives when their forecasts of doom are conclusively shown to be wrong. What they are hoping for, were they to accomplish the (actually impossible) fantasy of some kind of halt to Brexit, is yet another aspect of their incoherence. If they expect a Jeremy Corbyn government in 2022 to save them, they must be sadly deluded – as well as stupendously foolish in hoping for such a catastrophically dangerous political outcome.

I’m not saying that there are no Leavers at these government dos – there always seem to be one or two token (usually excellent) Brexiteers among those invited. But imagine what it is like to be a lone entrepreneur, not necessarily predisposed to assertive argumentation, in one of those 1- or 2-hour meetings, the room crowded with those whose entire careers have been taken up with soliciting favours from government. I’ve spoken with some who have attended such meetings as the token Brexiteer – it’s hard, as one person, to get a word in sideways in that mob, when the overwhelming consensus in the room is how catastrophic Brexit is going to be, how much government support, fudge, compromise, help to my business is going to be needed in order to save our country from cataclysm.

The problem therefore is two-fold: first, government needs to reach out to entrepreneurial Brexiteers in order that they hear from the people who are in tune with the country, and on whom the country is going to depend going forward for its economic growth. Second, entrepreneurial Brexiteers need to get back into the fray, and communicate with their MPs, with 10 Downing Street directly, with David Davis and Steve Baker at DExEU, and indeed with Liam Fox’s department to talk about the kind of trade deals entrepreneurs would like to see with the rest of the world.

While reports of the new Cabinet concordat on leaving the Single Market and the Customs Union by April 2019 are reassuring, they only reflect the reality of our having signed Article 50, and we still face who knows what convoluted amendments that Remainers will try to introduce in Parliament during the upcoming legislative sessions. We need to continue to remind MPs and indeed government that:

  • We need to leave the Single Market as soon as possible. The Single Market is not some wonderful mechanism whereby we can happily sell into the vast market of the EU, but rather a stitch-up by the large corporations to set standards that tilt the scales in their favour rather than to their competitors – particularly the entrepreneurial competitors. The costs of the Single Market were estimated – by the Treasury itself, signed off by no less a person than Gordon Brown! – to be hitting our GDP by 7%. A rigorous study by Civitas showed that countries that are not a member of the Single Market grew their exports into the Single Market faster than those countries who are members of it.
  • It’s the Customs Union that’s hobbling our global exports – we need to be out of it immediately, at the end of March 2019. The idea of the Customs Union is not as a cuddly place where everybody can sell products free of tariffs to each other, but rather as a high tariff wall to protect German-manufactured goods and French produce against global competition – so that not only are the citizens of the UK forced to pay more for goods they buy from the rest of the world (around 80% of the global economy, and growing), but that in response, the rest of the world creates retaliatory tariff barriers against us, so that it’s far more difficult for us to sell our own goods and services to the US, Japan, Australia, wherever (the non-EU global market where 60% of our exports already go). Once we leave the EU and take our WTO seat (that has always been there, but that we were forced to leave vacant while we were a member of the EU), we will be able to have our say in setting standards and tariffs for goods, services, produce – standards that will then better reflect the UK’s own needs, rather than the needs of some other member, or members, of the EU. Any talk of a transition period that involves holding off on signing our own trade deals, right from the get-go in May 2019, with countries around the world, will be catastrophically bad for our future success as an economy and must be resisted fiercely.
  • The big prize is Free Trade. We need signature-ready deals for March 2019. When Britain instituted full-on Free Trade in the 1800s, we opened up a glorious era of commerce and prosperity – not just for the UK, but for the rest of the world. We are now at a hugely important moment in time where we could be doing exactly the same in the 21st century. With the pound now trading in what the IMF, before the Brexit vote, said was an appropriate range – and with no forecast for the pound to increase in the medium term – we are set fair for a continuance of our export boom. It’s essential that to maximise that boom, trade deals around the world are agreed as soon as possible, so that our exporters can better access markets worldwide, without suffering from the penalising tariffs that the Customs Union’s existence generates. And speaking of trade deals: many of us have visited America and eaten presumably chlorinated chicken there, and – strange to relate – have not fallen prey to any foul disease in consequence – unlike what we have seen in the recent disclosures regarding insecticide-ridden eggs coming from the EU. We need a Brexit government with bottle: one that recognises that results, not rhetoric, should guide our future safety concerns and that is open to mutually beneficial trade discussions.
  • We must use the Brexit Bonus to deliver a competitive economy. It’s astonishing to hear talk of deliberately pulling back from becoming a competitive economy, in the name of some alleged social solidarity with the EU (translation of that’s phrase: let’s screw up our economy as well, so that we, too can have 10% unemployment and 40% youth unemployment). It’s not as if even the EU believes that talk now. France now gives far more support to entrepreneurs than the UK does: Paris is a hotbed of new start-ups (as indeed is Berlin). Italy, taking advantage of the UK’s economically illiterate rejection of Non-Doms, has set up a Non-Dom scheme that is near identical, except where it is more benevolent, to the Non-Dom scheme that the UK has now abandoned. Our support for entrepreneurs, and our attracting these entrepreneurs (as well as great finance minds, scientists and others from around the world) into the UK was an important part of the reason why the UK grew so much faster than the rest of the EU in recent years. Why should we pull back from that now, particularly if it is being done in the name of some loony, imaginary social solidarity, and in the face of countries that have learned from us (and are presumably startled at why we are abandoning our approach just as they embrace it)?
  • We should not act helpless and supine in these negotiations. There is no financial obligation to pay the EU anything at all after March 2019. None of us want to duck any reasonable obligation, but that should go for the other side too. If Barnier et al really mean it when they say they propose to play dirty with us, we absolutely must make it clear that we know, and accept, what our BATNA (Best Alternative To a Negotiated Agreement) is, and that includes not paying the EU a single penny, should we fail to agree to a deal that we want to accept. (We might well then hear some whistling…)

The Government are just not hearing these arguments coming from enough Brexiteers. You, as you read this, may not be the CEO of some large FTSE 100 company, climbing the corporate career ladder all your working life, with complacent shareholders and a large PR department to push your special pleading. You are actually more likely to be someone who is growing jobs and growing the economy. It’s essential your voice be heard.

And for the Government, please, please stop putting your fingers on the scales by inviting – as the overwhelming majority of those you talk to – the rent seekers, the Corporate Welfare crowd. You’ll only hear one story from them – delay; dilute; defer to Brussels.

The problem as I see it is endemic to the nature of a Conservative government, and to the nature of those of us who voted Brexit. Conservative governments tend not to be wary enough of crony capitalism, while to entrepreneurs, the thought of cuddling up to government is usually incomprehensible. There’s a parallel in the Conservatives’ current failure to counter Gramski’s infamous ‘long march through the institutions’. Left-wing governments populate the leadership of government and quasi-governmental institutions with their placeholders; the current government seems strangely indifferent to reversing that.

Astonishingly, Labour dignitaries continue to be appointed here, there and everywhere – Mandelson to chair the Design Museum; Hunt to run the Victoria & Albert Museum; James Purnell to run most of the BBC; and Dame Helen Ghosh to slide effortlessly (and likely with sighs of relief from each previous employer) from the Home Office to the National Trust to Balliol College. (One can always make the case for one or another of these appointments: it is the cumulative weight of so many, and so predictable, appointments, and the lack of counterbalancing Conservative or entrepreneurial figures, that is so depressing.)

Back to Brexit: we need our voice heard. By all means, continue to write letters to the media, and speak up whenever you find the opportunity. But the focus (from September) now shifts to Parliament where the Great Repeal Bill, and other bills focused on such topics as Agriculture and Fisheries, are to be debated, most likely amended, and voted on. MPs must be contacted (particularly if your MP was or is a Remainer), by phone or letter or email; articles must be published; letters to Ministers written. Brexiteers must get involved in the political process, as much as they possibly can.

In less than a month, a series of debates and motions in Parliament will set the ground for what this country will look like once we leave the EU. Almost certainly, a majority of the people who are reading this article played their part in the great referendum win. You now have to sigh deeply, gird your loins, and go back on the attack, to make sure not just that we leave the EU (that, at least, is for sure now that we have signed Article 50), but that we leave it in a way that reaps all the potential rewards of that vote for our country, and our country’s people. Get to!

Photocredit: David Guerra Terol