Project Fear’s incredible No Deal warnings are becoming like a cracked record

Project Fear’s incredible No Deal warnings are becoming like a cracked record

In advance of the arrival of a new leader of the Conservative Party and Prime Minister, we are again seeing the cranking up of the Project Fear machine and the buckets of cold water being dumped on any one or any plan that might dare suggest that we might actually succeed in leaving the EU.

The recent announcement of investment by Jaguar and BMW in electric cars was coupled with dire warnings by the Society of Motor Manufacturers and Traders (SMMT). Every day on the Today programme there is another body or person decrying the idea that we might survive a so-called no-deal Brexit. Yesterday we had the privilege of two with both Carolyn Fairbairn of the CBI and our ex-Prime Minister Mr Blair.

We have also had the reheated Project Fear dodgy dossier from the Treasury being given its monthly outing with the Chancellor claiming that a so-called ‘No Deal’ will cost the economy £80 billion. To back him up, the OBR tells us that, in the same event, borrowing will increase by £30 billion. We have of course heard it all before to such an extent that it is becoming a rather cracked record that, based on past form, can be taken with a pretty large pinch of salt.

However, what intrigues me is the motivation of these siren voices and why they put so much effort into trying to deny or subvert the result of the referendum rather than working towards a future outside the EU. Why are they so keen to stay in the EU, which with every passing day can be seen to be ever more of a rotten institution, an undemocratic, unaccountable empire in all but name?

What really motivates the likes of Blair, Brown, Major, Hammond, Gauke and Stewart as they give lip service to the result of the referendum whilst doing everything in their power to frustrate it? Why? What is so wonderful about the EU that they think we should give up our Common Law, our democratic rights, our independence and, above all, our sovereignty? Being charitable, perhaps they are fearful of the unknown and how little Britain can possibly cope without being tied to the EU’s Aunt Ursula. If this really is the case, one wonders how much smaller countries which value their independence, such as Canada, New Zealand and Israel, possibly manage to pursue successful paths in the world.

What many of these same characters cite is the problems that traders such as myself, exporting to every EU country out of more than 120 around the world, are going to have if we leave – and especially if we leave under a so-called No Deal. Yes, the dynamics of trade will adjust to the new circumstances, but the dynamics of international trade have changed enormously since joining the Common Market and continue to change almost daily. We deliver to our customers in our largest market, the United States, on a next-day basis, customs-cleared. To my mind, that is frictionless trade and that is without any sort of Free Trade Agreement. This would have been unthinkable forty-plus years ago, but is made possible by a combination of technology, simplified procedures and organisation.

The trade bodies like the CBI and SMMT spend much time issuing reports, analysis and manifestos all telling us what a disaster Brexit will be for British industry and in particular their sector. Aside from the fact that I can never understand why the CBI, with barely 2,000 members, is given such credibility, why does it not use its efforts to prepare its members to take advantage of the opportunities after Brexit rather than attempting to usurp the result of the 2016 referendum and overinflate any benefits of Remaining?

As to the SMMT, it is an interesting body as it is representing both manufacturers and traders, those making cars in the UK as well as those importing cars into the UK. A change in trading patterns and the advent of tariffs could be very beneficial to those making cars in the UK, enabling them to increase home market share to the cost of those other members who import from the EU.

There is also a convenient conflating of the proposed closure of Honda’s factory in Swindon with Brexit, however the only other factory they have within the EU Customs Union is also being closed, which would seem strange if the decision was Brexit-related. The other points the SMMT fail to ever mention is that we operate a massive trade deficit in cars with the EU and that whilst exports of cars to the rest of the world have increased massively in the last couple of decades, exports to the EU have been virtually stagnant.

The SMMT as an organisation is trying to ride two horses, representing two frequently opposing market areas and in order not to be caught out seeks to attempt to maintain the status quo by pouring cold water on any suggested alternative.

The OBR and Treasury wrap their Remainerism up in the large bill that they say it will cost us to leave and especially in the event of a so-called No Deal. I believe that these costs are considerably higher than they will be in reality, a conclusion I come to because neither organisation seems able to find any upside from leaving the EU and being able to tailor our trade policy to our own requirements. The Treasury forecast does not even appear to take into account the saving to the Exchequer of no longer contributing to the EU.

There will be costs of adjustment, but these will not be unmanageable and they will be non-recurring. On the other hand, potentially we could face massive costs the longer we remain in the EU due to our potential liabilities to the Eurozone in the event of, for example, an Italian default. There are potential future costs whatever we do and we will not know what they are until we have to spend them – but we can through planning minimise the costs of leaving in a way we can never minimise the potential and largely ignored costs of Remaining.

If on a journey you take a wrong turning, are you going to stay on the wrong road to its end rather than get back on to the right road simply because the cost of the fuel required to do so is going to be expensive? Of course not!