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Why a no-deal Brexit is nothing to fear – The Spectator – 4 August 2018
A viable alternative to an EU trade deal is ready and waiting
Warnings by Remainers about the consequences of a ‘no deal’ Brexit are beginning to resemble a game of oneupmanship worthy of Monty Python’s Yorkshiremen. Not content with claims that the M20 to Dover will be gridlocked with lorries waiting to undergo customs checks and that the North Ireland peace protest will break down, Doug Gurr, Amazon’s chief in the UK, apparently told Dominic Raab at a recent meeting that there will be ‘civil unrest’ within a fortnight of Britain leaving the EU without a deal. Next, they will have us living 150 to a shoebox.
Those who peddle this relentless doom-mongering fail to understand the protections which will remain in place for the UK under international law. Far from ‘crashing out of the EU’, failing to secure a free trade deal with the EU simply means that the UK will trade with the EU on terms set out by the World Trade Organisation (WTO).
The pundit class tends to scoff at the WTO option. They dismiss it as a recipe for chaos. But that is to ignore the huge progress that this body has made in promoting global trade over the past two decades. The government should from the beginning have presented the WTO option as a viable counterpoint to the EU’s hardline, all-or-nothing stance.
The WTO oversees a system of trade rules for its 164-member countries, which together account for no less than 98 per cent of all global trade. Under the WTO General Agreement on Tariffs and Trade (the GATT), tariffs on most manufactured goods between the UK and the EU would stay quite low, averaging around 3 per cent.
While EU leaders like to threaten us with hints that our exports would be unsellable in the EU, the fact is that non-tariff barriers such as arbitrary health and safety inspections and borders would be prohibited under the WTO’s Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) agreements. The UK intends to retain conformity with EU regulations following Brexit, at least for the time being, meaning that the existing low levels of health and safety risks to the public in UK products will not change in the days after Brexit. There would, as a result, be no grounds for the EU to exclude our goods from its markets.
The WTO’s new Trade Facilitation Agreement obliges the EU to maintain borders which are as frictionless as possible, using modern technologies such as pre–arrival processing of documents and electronic payments. Discrimination against foreign products through all sorts of internal regulations is forbidden. These rules are enforced by a well-respected international tribunal which has a high rate of compliance and cannot be overruled by the European Court of Justice.
While tariffs on some EU goods — agricultural goods and automobiles in particular — would be higher than 3 per cent, economic gains secured from an independent trade policy and a more pro-competitive environment should compensate UK consumers.
The WTO’s coverage of services is incomplete and would not grant UK firms the level of EU market access they enjoy under the single market, but the UK is well placed to take a leading role in developing the new Trade in Services Agreement, due to resume over the next few years, as well as multilateral negotiations for services at the WTO. Roberto Azevedo, the director general of the WTO, announced that he is looking forward to having the UK back as an independent champion of free trade.
Breaking free of the EU customs union will enable the UK to boost trade with other countries around the world, taking advantage of WTO rules which allow countries to offer preferential trading arrangements to nations with which they negotiate a Free Trade Agreement (FTA). In charge of its own trade policy, the UK should be able to roll over many of the EU’s 60-plus FTAs with third countries, some of which have already indicated that they intend to offer the UK terms as good as they did to the EU.
Canada has even suggested that the UK may get a better deal than that which was offered to the EU under the Comprehensive Economic and Trade Agreement (CETA) two years ago. The UK Department of International Trade has already begun discussions with several countries with which the EU has failed to do trade deals, most notably the US. Since 90 per cent of world GDP growth in the coming decades is expected to be outside the EU, it makes sense that the UK looks beyond this region, which now accounts for less than half of its overall trade. The UK will no longer be required, as it is at the moment under EU rules, to impose tariffs on products which it does not produce, such as tropical fruit — reducing prices for consumers and giving us leverage when it comes to negotiating trade deals. The country will be in a strong position to do trade deals faster than the EU has managed because it will not be encumbered by a long-winded ratification process involving 27 member states.
Why, then, has the government damaged its negotiating position by seeming to exclude the WTO option and giving the impression that it is desperate to extract a trade deal with the EU at all costs? The UK has approached the EU as a supplicant, or worse, a wounded animal. Theresa May’s Chequers deal would have us clinging to a weak version of the single market and customs union, which would deprive us of the freedom we ought to win through Brexit. Even that is not enough for Michel Barnier.
Yet it is the EU which has more to fear from these negotiations, being nervous about having a large, liberated, pro-competitive economy on its doorstep. The government should have initiated this process, proposing an FTA based on CETA but better, with deeper access for services such as finance, and lower tariffs on a broader range of products. At the same time, the government should have been making parallel arrangements for a no-deal WTO option.
Thankfully, there are signs that UK negotiators are now moving in this direction. The UK government announced recently that it has submitted its schedule of tariff commitments for certification by the WTO. The UK’s new Trade Remedies Authority — set up to regulate international trade disputes — will shortly be up and running and the ports are being built up to handle the minimal extra customs checks which will be needed.
In any negotiation, there is no strategy worse than giving the impression that you are desperate for a deal at all costs. With the WTO option as an entirely acceptable, workable alternative to a trade deal, the UK is truly in a position to walk away. And that’s a good place to be.
David Collins is a professor of International Economic Law at City, University of London.
When total funding is calculated per head, English councils are once again worse off.
“What these figures show is that when there is real power over public spending choices outside of Whitehall, it makes a difference” Jo Miller, Solace president
In 2018-19 English councils are receiving, on average, £1,423 to spend on services per person. This is more than a third lower than what their counterparts in Wales and Scotland are given to spend per person this year – £2,309 and £2,237 respectively.
While the amount of per capita funding made available to councils in Wales and Scotland has increased by 5.2% and 0.2% respectively in absolute terms since 2010-11, England has witnessed a 29.8% reduction in the last eight years.
Commenting on the findings, Jo Miller, president of the Society of Local Authority Chief Executives & Senior Managers, who writes on the issue for LGC today, said: “What these figures show is that when there is real power over public spending choices outside of Whitehall, it makes a difference. With a comprehensive spending review on the horizon, and the need for a preserved union of Great Britain and Northern Ireland post Brexit, the case for genuine devolution within England grows ever stronger.”
Both the Treasury and the Ministry of Housing, Communities & Local Government declined to comment on the findings.
However, in his Budget speech last month chancellor Philip Hammond said English local government had “made a significant contribution to repairing the public finances”. He pointed to £1bn extra funding for social care, and the removal of the housing borrowing cap, as proof the government was giving councils “more resources to deliver high quality public services.”
Mr Hammond also said “longer-term funding decisions [for English councils] will be made at the spending review.”
In an interview with LGC, local government minister Rishi Sunak said he did not recognise the national disparities highlighted by our analysis but added “we have a devolved country so whatever Scotland and Wales want to prioritise is up to them. It’s not for me to tell them what to do.”
Mr Sunak said that while he preferred to “focus on outcomes, not necessarily just inputs”, the extra money in the Budget amounted to a “pretty serious statement of intent”.
A Welsh Government spokeswoman said its councils had been “protected from the worst effects” of austerity. She added: “We value local government services in Wales and believe in strong local government. We recognise their importance, particularly for some of the most vulnerable in our society, and the role these services play in enabling people to achieve their potential and to live independently, in supporting safe and prosperous communities and in building local economies.”
A spokesman for the Scottish Government said: “We have treated local government very fairly despite the cuts to the Scottish budget from the UK government.”
It’s probably a bit late to ask this question, given that this scheme has been in place for 30 years now.
That said, the proof must already be there, especially in London where working class areas, that were a foreign land for those with means, are now fashionable and sort after locations for the young professionals, earning big money.
Exposing social housing to the open market , in high demand areas, where demand is the through roof and prices constantly rising, inevitably means the original tenant, very soon becomes the ex-owner.
It might seem like a a very worthy ambition, giving everybody currently sitting at the bottom of the pile and trapped in social housing – as certain people view it – a chance to own their own home. However, assuming that hat was even the original intention and it wasn’t just about killing off the bulk of social housing as we knew it, it’s also had the effect of depopulating our city centre of those of modest means, otherwise known as the working classes.
So all those people who used to empty the bins, sweep the streets, dig up the roads, drive the delivery van, serve in the local shops and do the thousand and one other menial, but vital jobs that keep a city running, now live a journey away from their workplace.
in some cases that journey may mean up to an hour spent on a bus, or train, travelling in from a remote housing estate where everybody else is doing exactly the same thing. The effect of this, is that nobody actually knows who their neighbours are anymore and therefore certainly little, or no sense of community, because there’s so little actual time spent in the company of those who live near us.
Back in what used to be the social housing areas that haven’t been flattened and turned into expensive apartment blocks for the upwardly mobile, the housing has been gutted, extended and beautified, to make it desirable and more importantly, significantly more expensive than it was. Again, just like the workers they displaced, the lack of community will be clear, but this will be by choice in most cases, because their social lives take them elsewhere and opportunities more diverse.
Job done. All those rundown, poorly maintained sink estates cleared out from our city centres And that ‘unpleasant’ working class riff raff removed to where it belongs, when it not actually doing the work that needs doing.
The added bonus is, those who grabbed the social housing as soon as the first tenants where starting to sell, can now maximise their returns, over and over again, by renting to the high earners who need to live close to the city centres.
If Right to Buy was really about getting those of modest means on to the housing ladder, it was a fatally flawed concept. It depopulated our cities of the ordinary working class people, by selling off the only type of housing they could ever have afforded to live in. If that was always the intention, shame on you Margret Thatcher.
The Housing should have been retained and those who wanted to buy their own property should have offered equivalent grant funding to purchase their own home elsewhere. This could have been in a privately built, or publically funding housing developement, such as in the new towns.
It was claimed that this would have forced people to move out of houses, or places they’d been in for many years and possibly spent money on. This is complete nonsense and just a smoke screen used by government to justify to the orignal scheme.
Why should social housing tenants have been given that benefit on top of the massive discounts they received for the ‘equity’ they’d supposedly built up? How was they were any more entitle than somebody forced to rent a property in the private sector, where the end of lease meant the most you were likely to get back was your deposit if you were lucky?