4 February 2016

How good could Britain become once it is free again?


It’s been a mixed few days for Leave and Remain.

The Remainers will be pleased at the continuing infighting between the Out campaigns. The decisions of big beasts Theresa May and Boris Johnson to back the PM’s position also denies fresh leadership to the Outers. I’m personally very disappointed – if not particularly surprised – at the Home Secretary. At Manchester’s Tory conference last year she reaffirmed her ambition to reduce net immigration into Britain to the tens of thousands. She knows that ambition is impossible in a European Union where citizens from southern and eastern parts of the continent can freely emigrate to Britain and boost their earnings by up to 400%. Nothing in the emergency immigration brake changes that. Nothing. Her support for the PM’s non-deal has no intellectual or practical justification and is part of the reason why voters are rightly cynical about manifesto promises and the politicians who make them.

Leave will be comforted by the ferocious press reaction to Cameron’s draft renegotiation deal. I agree with Isabel Oakeshott that yesterday’s front pages were probably the worst of Cameron’s leadership. Downing Street now knows that it will not have Fleet Street trotting alongside it as it makes the case for Britain’s continued membership of the EU.

Leavers shouldn’t assume, however, that they’ll get an easy ride from the newspapers or that disappointment with the renegotiation will translate into support for Brexit. Newspaper editors won’t endorse a leap into the dark and the Leave campaigns need to do a much better job of describing what opportunities await a free, independent British economy. While a third of Britain will probably vote for Brexit because of immigration and sovereignty issues, the decisive floating voters need more reassurance that their jobs and incomes will be secure. As David Davis MP says in a speech today: “You cannot beat something with nothing, even if that something is membership of the creaking edifice that is the EU.”

Mr Davis uses his speech to set out some of the reasons why he is confident about Britain’s future outside of the EU. Five stood out to me:

1. Britain will be able to negotiate better trade deals

Davis notes that “Switzerland have seen an increase in growth rates in trade as a result of two thirds of their free trade agreements. The UK has only seen an increase in growth rates in trade from one third of the EU’s free trade deals. So little Switzerland, with its population of 8 million, is able to negotiate better trade deals for itself than the EU does on our behalf. Does anyone seriously believe that Britain, the fifth largest economy in the world, would not be able to negotiate by itself at least as successfully as Switzerland?” We should study what Tony Abbott achieved when he was PM of Australia. Over just two years he negotiated new trade arrangements with Japan, China and South Korea.

2. The EU has an interest in giving us a good new settlement

While EU enthusiasts erroneously claim 3.3 million British jobs are somehow dependent on our membership of the EU “there are over 5 million jobs on the continent that are linked to trade with Britain.” The declining EU economy simply cannot afford to jeopardise those jobs by giving Britain a raw, post-Brexit deal.

3. Use £1 billion of the money we’ll save from EU membership on a world class trade promotion service

“Imagine,” says Davis, “an 0800 number and an email address where a small manufacturer in Lancashire can call Shanghai or Mumbai or Sao Paolo, and find out in English how to negotiate the import regulations, find a freight forwarder, hire a warehouse, translate a brochure, the simple things that stop too many small businesses from operating abroad. They may be small companies, but this is not small beer: I am talking a billion pound project here.” Genuinely exciting. Money currently disappearing into the Brussels bureaucracy can be repatriated by us and used to facilitate a boom in UK exports to the world.

4. More and more companies are rejecting the scaremongering

Davis notes that Toyota, Nissan, Airbus, BMW, Opel and Volkswagen “have now said that Brexit will not hinder their investments in Britain, sometimes in reversal of previous positions.” Many multinational companies invest in Britain because of our language, our culture, our union laws and our corporate tax regime. Those companies are now being honest about that.

5. Outside of the EU we’ll be freer to become even more attractive to inward investors

“We would also have the opportunity to reform our economy, pushing through the changes necessary to create a dynamic, modern economy. Competitive tax rates, a competitive labour market, and effective, rather than burdensome, regulation. After Brexit we can put all that right without asking Brussel’s permission.”

If the Vote Leave campaign can put its recent troubles behind it and find ways of popularising these arguments, it can persuade younger, future-orientated voters that a Britain extricated from the high unemployment, high taxes, high regulation, high welfare EU model will be a much more prosperous one.

Tim Montgomerie is a columnist for The Times, a Senior Fellow at Legatum Institute and co-founder of the new website The Good Right. His “reform of capitalism” report for the Legatum Institute was published on 4th November.