Stephen Hill hears the bugles on Horse Guards Parade practicing the sounding of the Retreat
The latest gaggle of geese out to protect the ramparts of (the Treaty of) Rome are thirteen UK Ambassadors, who aver in last week’s Sunday Times that a Brexit will impact the UK’s ability to negotiate overseas trade deals and that foreign direct investment and millions of jobs will be at risk.
What utter tripe! And they declare this as China announces massive investments in UK nuclear, creating thousands of jobs, and yet neither the EU nor the UK has struck a trade deal yet with the PRC. Little Iceland has, however, negotiated one with China by and for itself. Nor do their excellencies know anything about how trade works in today’s global economy, and nothing about industry either.
Let me explain. Industry today is a global pyramid: OEMs – original equipment manufacturers such as BMW, Volkswagen, Toyota, Caterpillar, JCB and Airbus – are supplied by Tier 1 suppliers, who themselves depend upon Tier 2 and 3 suppliers, and so on.
These supply lines today are global, and the EU is itself caught up in a market of 6.5 billion consumers – though the bureaucratic European Commission refuses to recognise that reality. Thanks to the EU’s deflationary single currency, now an antiquated structure, 550 million people continue to experience decline as a percentage of world trade.
Their excellencies should take a lesson from Jeff Immelt, CEO of GE: he said whether the UK was in the EU or not was irrelevant, given the reality of today’s markets and structures. GE makes jet engines, power-generation plants, meditech devices such as scanners, defense equipment and so on. It is America’s largest manufacturer, but not as big as India’s JRD Tata or the odd Chinese conglomerate or two.
Their excellencies should also not forget that the EU is a customs union, which only deals with manufacturing, not services – and Britain’s economy is 13 per cent manufacturing and 70 per cent services. (Agriculture, however, is subject to the restrictions of the EU’s CAP, but would rather not be. Not to mention that we’d like our fishing industry back, too.)
And now tell me, your excellencies, what are the EU’s institutions telling us about their restrictions and regulations for financial services, about controlling the City? That’s nothing to do with manufacturing. Get your tanks off our lawn!
Their excellencies also fail to mention or take any account of the dangers of staying in the second, euro-less, tier of a crumbling German-led bureaucratic, anti-working-time prescriptions and employment law, all new unworkable regulations for the City. No wonder that 95 per cent of UK companies don’t trade directly with the EU at all – it’s too damned expensive and restrictive.
My advice to their former excellencies is to stay out of the debate until they are better informed on the many aspects of the In/Out issues, and then address both sides.
This week Cameron will spell out his demands from the EU in a letter to be published, except he won’t spell it out as they have asked him to, line-by-line. Like everything to do with the EU, he dare not tell the truth, and be hoist with his own petard when his renegotiation backfires. I hear the bugles on Horse Guards Parade practicing the sounding of the Retreat.