The benefits of BREXIT (part 2)

I am a regular listener to BBC Overseas Service and I am absolutely appalled at how negative their coverage of BREXIT has been, so much so that one listener actually queried why BREXIT? And the OS folks totally missed the implications of that query. They had failed to tell their listeners why a significant majority of British people actually favour leaving the EU. Their coverage failed to inform as to the benefits of BREXIT.

There are solid reasons why Britain should leave the EU. Many of these were set out by Jonathon Arnott MEP for Northeast of England.

1.     Centralised bureaucracies like that in Brussels or Washington disempower local people and emasculate their sovereignty while their local institutions still have to function. The American people have recognized that the bureaucracy in Washington is a problem (swamp). Unfortunately, they sent another “swamp” to fix that swamp, and he does not have a clue as to what is expected of him. The UK joined a common market and found itself in a United States of Europe which now wants its own army that will add significantly to annual membership fees. In the meantime, the bureaucracy is brainwashing the gullible as to how much better it is in getting things done – rubbish! Bureaucracies like these the world over have destroyed communism and socialism not only by their massive cost but also by their unproductivity and corruption. It is far more efficient for countries to work together in loose trading blocks. The main problem with BREXIT is that the bureaucracy in Brussels needs to send a message to other potential exiters by heavily penalizing the UK for its daring!

Compliance with EU legislation

2.     The EU Procurement Directive won’t be able to force the UK to give State contracts to overseas businesses. At present, the UK has to accept tenders from across the EU which means that local businesses often lose out on getting contracts and creating jobs;

3.     The UK will not have to comply with the VATMOSS legislation which will boost jobs in the UK. This legislation makes it very difficult for UK businesses to trade with other European Union countries as it requires such businesses (even if they’re below the VAT threshold) to charge VAT at the applicable rate in the country they’re selling to within the European Union. Instead, the UK businesses now trade more with America, Canada, Australia and New Zealand;

4.     UK business compliance costs will be lower outside the European Union;

5.     The UK will not have threats like the Copyright Directive to the free functioning of the Internet. However, requiring ISPs, search engines, and social media platforms to use automated crawlers to delete content suspected of being copyrighted will result in the removal of substantial amounts of legitimate content as well;

6.     The UK will not have to comply with EU State aid regulations… Sometimes it’s necessary to take rapid action to protect local businesses. When SSI in Redcar closed, there were many reasons: the strong pound (at the time), China dumping steel below cost price on world markets, high energy prices, etc. In such situations, it’s often appropriate to give State aid to allow a business which should be profitable to survive a tough time (and when the State aid is less than the redundancy/unemployment payments the State would have to make if it didn’t). However, Articles 107 and 108 of the TFEU prevent the UK from giving such State aid without the EU Commission’s approval. The UK government could hide behind that, didn’t ask for Commission approval, and SSI went under – costing thousands of jobs both directly and in the supply chain. With BREXIT, the UK will also regain the power to enforce its own trade defence mechanisms, which would have avoided the delay whilst 28 countries all negotiate what to do. Different countries took different approaches; the result was paralysis at a time when the UK couldn’t afford it;

7.     BREXIT should finally end the madness of double-testing products which had already been fully tested to some of the highest standards in the world; these required re-testing because of new EU legislation requiring testing to take place at EU level. This led to the disappearance of some products from the market which could not justify huge fees being paid along with job losses;

8.     BREXIT means the UK will not have to comply with rules restricting ‘natural monopolies’. There are certain

‘natural monopolies’ in the UK – the postal system, for example: it’s inefficient to have competitors duplicating the same work. In these situations, privatisation basically doesn’t work well and national ownership makes sense. EU legislation has watered this down;

Freedom to Act

9.   The UK will now be able to reclaim its valuable 200-mile fishing resources (worth billions of pounds annually). Since joining the EU, the UK billion pound fishing industry has been decimated. The EU hijacked these resources by claiming that they were “common” to the other EU members and had to be shared with quotas that have proven to be completely ineffective, leading to the ‘discards problem’ amongst other issues – where dead fish are thrown back into the sea to avoid breaching quotas. The various attempts at EU level to resolve this problem have failed. In the meantime, EU-flagged vessels have the right to a majority of the value of fish in UK waters. Furthermore, the system of sales means that much of the ‘British’ quota in our own waters still goes to foreign vessels;

10. The UK will now be able to negotiate its (own) trade deals with third countries – trade deals that are more appropriate for the UK, which now has a negative trade balance with the EU. At the same time, the UK already has the largest exports extra regional of any EU country;

11. The UK will, ultimately, save the net (not gross) membership fee paid to the European Union amounting to £180 million per week (or so). This will be a genuine saving once the ‘divorce bill’ amounting to 350 billion pounds has been paid for the first couple of years. Note: in a no deal (hard BREXIT) this penalty will not have to be paid by the UK either;

12. The EU-mandated VAT is one of the most inefficient forms of indirect taxation on the planet, costing billions every year to businesses and the Treasury through costs of compliance, fraud, etc. Outside the European Union, the UK will be free to choose a fairer and simpler form of indirect taxation;

13. Immigration control will be a benefit of BREXIT. One of the key problems with uncontrolled immigration from the EU is an oversupply of unskilled and semi-skilled labour which drives down wages. By prioritising skilled immigration over unskilled, this downward pressure on wages will be reversed – whilst developing the skills base within the economy.

Peter Webster is a retired Portfolio Manager of the Caribbean Development Bank and a former Senior Agricultural Officer in the Ministry of Agriculture.