Let’s look forward to embracing the benefits of being a fully self-governing nation state once again

Let’s look forward to embracing the benefits of being a fully self-governing nation state once again

Brexit is an exciting opportunity for the UK. We will regain the democratic authority to have all our laws made by our own elected government and Parliament – and enforced by our courts – with Britain’s national and economic interests at heart. We will control our own borders and fully determine our immigration policy – ensuring that it is tailored and honed to the specific needs of British-based businesses and the economic, infrastructural and social realities of the UK.

We will take back control of the taxpayers’ money that Britain, as a net contributor, currently pours into the EU’s coffers – spending it instead in Britain on British priorities. We will regain control of UK fishing waters and determine our own agricultural and fisheries policies. We will, for example, have the capability to reduce wasteful discarding and enable our fishermen to sell more of their catch to their customers whilst at the same time taking less fish out of our waters. We will also be able to grow and produce more food in the UK.

And we will have the democratic capability to build Global Enterprise Britain – establishing a host of new commercial opportunities to increase our nation’s prosperity through higher volumes of trade across the world. We will have the freedom to negotiate our own free trade deals – rigorously pursuing them across the US, Canada, China, Australia, New Zealand, India, Japan, Singapore, the Middle East and elsewhere. And, as senior EU officials have conceded, trade deal talks with the EU can progress – because the realities of interconnected markets and international business ultimately transcend the political obsession to construct a single federalised state.

I am confident that the EU will make the rational decision not to harm its own businesses and citizens, maintain its lucrative export market with the UK and opt to go down the positive path of signing up to a comprehensive trade deal with Britain – even if it waits until the first quarter of next year to do so. It is clearly in the overall economic and commercial interests of businesses, industries and consumers based in the European Union for the EU to maintain tariff-free trade with the UK. The EU exports far more goods and services to the UK than vice versa.

Office of National Statistics figures show that the size of the trade deficit was as high as £72 billion last year with the UK buying EU imports worth £348 billion – significantly more than the £276 billion in exports that Britain sold to the other 27 EU members. By contrast, the UK’s ongoing trade surplus with the rest of the world reached £43 billion. Of course our trade with EU-based businesses and consumers is very important but equally, so is all the trade we have successfully built up with a multitude of other countries. 44% of UK exports in goods and services went to the EU last year. This percentage share has declined by 10% since 2006 as a consequence of exports to countries outside the European Union increasing at a faster rate. 56% of total UK exports now go to businesses and consumers located in nation states outside the EU. In the case of the UK car industry, for example, approximately 60 per cent of exports now go to the rest of the world.

And the EU’s negotiators should be aware that failing to secure a trade deal with Britain would have costly implications for the European Union. Professor Patrick Minford’s Economists for Free Trade (EFT) estimates that it would cost the EU in excess of £500 billion if it turned down the opportunity of a mutually beneficial trade arrangement with the UK. This includes incurring a huge net loss in tariff costs – caused by the size of the UK/EU trade deficit – paying tariff revenues of £13bn a year to the UK Treasury through to 2030 under the World Trade Organisation (WTO) rules that would be applied. In addition, it would face a one-off loss of both its balance of trade surplus with the UK – worth an estimated £36 billion – and the £38 billion financial settlement payment that Britain would keep. In contrast, the EFT predicts that the UK would be in pocket by up to £650 billion. This includes a net gain of £433 billion in tariff revenues. Add to this a trade-driven increase in GDP of up to 9% – equating to up to £180 billion – and the £38 billion saving, and it is clearly hugely in the EU’s interests to avoid this scenario.

It is also vital that Brexit must mean the UK leaving the EU Single Market and Customs Union.

Outside of the Single Market, the UK will gain the power to set its own regulations and take a much more global perspective on regulatory impositions – aligning them where it is overall in the economic and commercial interests of British business to do so and, equally, in time, disaligning where our UK-based businesses would fair better commercially as a result. For decades, the UK government has had no choice but to accept an avalanche of EU regulations governing multiple areas of UK economic, commercial and trading activity, even though the proportion of our GDP generated by exports to the EU is little more than 12%. Taking back regulatory control will become especially important as we establish new trade deals beyond the EU – making use of the freedom to take a broader geographical trading outlook.

As Mark Carney, Governor of the Bank of England, has stated, Britain will have the ability to, for example, free its banking system from the burden of excessive EU red tape – focusing instead on significant rules which keep the financial system safe. Moreover, the EFT has estimated that EU regulations currently cost UK industry and business an alarming £120 billion annually – equivalent to 6% of our GDP. And if, as expected, the pace of EU economic and political centralisation (federalisation) continues at its present trajectory, regulations, including the overly burdensome ones, are forecast to amount soon to a staggering £240 billion imposition. Consequently, we will at last have the opportunity – once freed from the Single Market – to assess the impact of each regulation on our businesses on a case-by-case basis and to then liberate our industries from the EU’s excesses. We will be able to iron out unnecessary regulations and cut costs by anything up to a third.

Just as importantly, Britain must exit the Single Market so that it can set its own VAT rates. We could, as John Redwood has recommended, choose, for example, to remove the tax from winter fuel payments and for specific goods such as female hygiene and “green” products. Crucially, Britain also has to exit the Single Market if it is to control the level of migration from the EU into the UK.

Meanwhile, outside of the Customs Union, we will no longer be held back from building and maximising trade with countries outside of the EU’s jurisdiction as we will gain the freedom to form our own trading arrangements with them. Many of the external tariffs in the Customs Union are protecting inefficient continental manufacturing and continental agriculture that has no benefit for UK consumers or businesses. In the long term, such protectionism harms the businesses it purports to help. Britain, once outside the Customs Union, will have the power to reduce and phase these tariffs out. Moreover, the mooted so-called “customs partnership” compromise would render the UK akin to a colony – raising taxes for the EU without having any say on the levies. The British government would be left imposing tariffs on goods entering Britain from outside the European Union at the levels set by the EU, collecting the money raised and then handing it over. No EFTA country would ever accept such political subjugation..

As Jacob Rees-Mogg, chairman of the European Research Group has outlined, post-Brexit the UK could use its new tariff-setting powers to zero rate certain goods imported from anywhere in the world. We would of course make sure that we do this in those circumstances where the UK has no domestic production on any significant scale or if the tariff rate is below 15% – in which case such British-based domestic producers will have already benefited through the fall in the pound, which will compensate them for the tariff removal concerned. Such forward-looking measures will benefit the least well-off UK consumers most since the highest levies are applied to food, clothing and footwear – products that take up a larger percentage of the lowest household incomes.

And crucially, let’s call the EU’s bluff on the Irish border question. In the practical world of commercial reality, the last thing that the Republic of Ireland wants or needs is a hard border with the UK from which it could face massive tariffs on key export products supplied to Britain. Seamless and invisible borders are already in place for VAT, excise duties, corporation tax and different currencies – the euro in the Republic of Ireland and the pound sterling in Northern Ireland. Consequently, creating a tariff-free customs border utilising modern technology and innovation is an obvious and practical solution that could be built into a wide-ranging trade deal. Britain has the expertise to rapidly develop the mechanism and present it to the EU. The UK’s position must therefore be firm: stubborn rejection by the EU would be responsible for a no deal.

So I look forward to the day when the UK at last becomes a fully self-governing nation state once more – in control of its laws, regulations, borders and finances and with the freedom and capability to strike its own trade deals worldwide. The invisible but very real hand of free trade and enterprise – identified by the renowned economist, Adam Smith – opens up a plethora of prosperity-generating international opportunities for the UK that will turn our nation into a global enterprise beacon.