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May 19, 2014updated 11 Jan 2016 1:29pm

Why Britain is best off in the Customs Union – not the European Union

By Spear's

Author: by Stephen Hill

Yes, we have had the Boat Race and are ready for Henley, but before that we have 22 May, when the UK and voters across Europe will have their first chance in forty years to pass their own ‘In or Out’ verdict on membership of the EU. Recent polls shows UKIP leading the field. What if Nigel Farage delivers his promised political earthquake?

In 1975 the UK voted two-to-one to join what was then called the Common Market, with Conservative PM Ted Heath assuring the nation that no loss of national sovereignty was implied. Both of these assumed facts were fiction: the 1953 Iron and Steel Act and the CAP had locked in continental subsidies for energy, steel and agriculture, and the 1957 supranational Treaty of Rome established a customs union – the right name for a true common market in manufactures but not services – but in an ever closer political union.

This structure was seized upon by the EU bureaucracy, as they entered the EU as the thirteenth unwanted nation state in 1993, via the utterly undemocratic Treaty of Maastricht and its so-called blueprint for the deflationary, job-destroying single currency.

Thanks to George Soros on Black Wednesday (really White Wednesday for the good it did) and Norman Lamont at Maastricht, the UK was spared the affliction of the euro so volubly promoted by Messrs Hurd, Howe and Heseltine, the CBI and the chairmen of BP, BT, Vodafone, Unilever and Goldman Sachs, among many others.

The Single European Act had been signed by a reluctant Thatcher in 1986, having been blindsided by Hurd’s Foreign Office, soon followed by Major’s hollow ‘game, set and match’ victory at Maastricht, where he idly signed away over a thousand years of self-governing constitutional liberty. The Conservative Party’s catalogue of errors will go down as today’s equivalent of a re-enactment of the Hundred Years’ War, which left us retreating in exhaustion from yet another failed entanglement with Europe.

Forty years on from our only referendum on the matter, Britain now finds itself in an incomplete customs union, riddled with subsidies and protectionism, inside a bureaucratically-driven European Union – in fact in an incomplete CU, but within an undemocratic EU, which is now effectively German-led.

This was not what the country voted for or wanted in 1975, and which is why the 2014 Euro election is an important moment, and a potential key milestone in England’s long history of involvement with Europe: but has Farage got an answer to both these issues – the useful CU and the cuckoo-EU?

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Unfortunately, the debate has become bipolar and pivots around In or Out. Nigel versus Nick was characterised by the impartial BBC – which always wanted In – as the ‘In or Out Debate’; the SMEs wanted Out, but the CBI ruled them back In, on the assertion that the alleged benefits of EU membership far outweighed the uncosted disadvantages; the EEF dreams on, wanting In but Out of all the red-tape; the Japanese car manufacturers here want us In, while what’s left of the UK railway industry wants Out, having been run over by the Siemens steam-engine, in what they thought was meant to be a two-way track.

The two Eds and Nick want In, while the Camerons have tried to put off Out until the 2017 ballot. What will we get in the referendum exactly? Cameron had to listen to Merkel tell both Houses of Parliament that she had nothing to offer the UK, except ‘More EU’; that told us just how much he has misread the EU reality. Only Nigel knows what he wants and why – Out. But Out of both the EU and the CU? Or just one?

There is something deeply unprincipled too about the PM’s latest proposition, which merely continues the Conservative Party’s duping of the electorate. Dave promised us a referendum on the Lisbon Treaty, but then found he couldn’t deliver for technical and legal reasons; he promised a bill in this Parliament to enshrine his latest pledge into law, but didn’t realise you cannot legally bind a future Parliament, prospectively.

He will renegotiate after the 2015 general election, but only if he leads his party into it and wins it outright; then he will only find himself pushing on a piece of string anyway, as the EU doesn’t offer à la carte but only the same plat du jour, consisting of second helpings of austerity with more EU on the side. Does he get it yet, or doesn’t he want to?

Worse still, his 2017 date means the UK could not be out until 2020, because of the mandated two-year negotiating period under Articles 50-53 of the Lisbon Treaty, by which time much damage will have been done to the UK’s biggest industry, the City, by Michel Barnier’s federalising EBA, the European Banking Authority, and its crazy regulatory regime for all financial companies, such as the capping of bonuses. And short-selling has just been banned by EU Diktat. Now even the Germans are complaining about his new bank health-check.

The PM’s policy offers nothing in a timely fashion and nothing certain. It’s just a cop out. He may find his referendum comes sooner than he wants – on 22 May 2014.

Meanwhile, all the Ins and Outs are both fundamentally wrong anyway. Why? Because the UK’s best interests are to be In the Customs Union, completely In the CU, but completely Out of the EU. This was what the country voted for in 1975. It’s what Churchill meant when he said, ‘We should be in it, but not of it.’ And those who think joining the European Free Trade Area, EFTA, is a solution don’t know their WTO Rules of Origin, nor the difference between a CU and an FTA, especially as applied to the UK, with many times more manufactures than all the existing EFTA members put together.

This most basic of errors, of confusing an FTA with a CU, last surfaced in the IEA’s £82,000 award winning BREXIT competition, chaired by Lord Lawson and won by a serving diplomat in Manila, namely Iain Mansfield. The latter’s confusion should not surprise us, as he previously served in the Department of Business, Innovation and Skills.

Now he claims the UK economy would be better off Out by a flea-bite’s £1.3 billion! And what about the net £5.0 billion paid to Brussels? And the £1,400+ CAP-driven spent on an average family’s food budget? Tim Congdon MEP, the noted economist, has calculated in detail the total savings, direct and indirect, of being Out of the EU at £150 billion a year, or 100 times more than Mansfield – or 10 per cent of UK GDP!

So, how to achieve this magic-bullet In-Out status – In the CU but Out of the EU? The first thing to do is give notice to quit under Article 50 of the Lisbon Treaty; then negotiate to stay In the CU, and vote on all trade matters, but on an intergovernmental, not supranational, treaty basis.

By getting Out of the EU we get back control of our own borders, our own fishing rights, we make our own laws and foreign policy, and we preserve our own currency and the future of the City. And we dump tons of Brussels bureaucracy overboard forever – the Social Chapter and the Charter on Human Rights to the fore: we don’t do rights in the UK, we do duties.

By staying In the CU, as opposed to being in EFTA, all our manufactures are duty-free within the CU, and we then press and vote to open up the services markets as well. We also continue to benefit from all EU existing and new trade agreements around the world, accounting for 8 per cent of all our exports. And we stay in NATO and protect the EU’s borders against external attack, as we know only too well that if Europe is attacked, it soon becomes an attack on the UK as well; and we stay in the EEA and Europol, as before.

In the CU – but not the EU – and the leading European NATO member, the UK will walk taller and speak louder in the world, and to the EU too, than being just one voice in twenty-eight, driven by Germany’s single currency-led agenda and drowned out by the EU’s effective QMV gagging mechanism. And historically Britain has worked better for Europe when it has been outside it – no other EU country can begin to claim that. And history shows that those who think we have to be In the EU to have influence in it, are facing the wrong way.

How strong is the UK’s negotiating stance in all this? Answer: very strong. First, the EU exports twice as much in finished goods to the UK than the UK does to the EU; in this exchange Germany is the main beneficiary, note, and they need the UK vote on trade against France’s tendency to protectionism.

Secondly, there is the negotiating power of our net (possibly declining?) contribution to Brussels – to be offset perhaps by a counter-charge for our superior position in NATO? And thirdly, we could bring the Commonwealth with us, or those countries within it that want to be in the CU too.

But what if the bureaucratic-ridden EU behemoth just drags out the negotiations or fails to give any ground? Answer: just tear up all the EU treaties, from Maastricht onwards, and in the time-honoured manner shout ‘res pactae sunt!’ et voila! the UK is immediately a sovereign nation state once again. It’s as simple as that, and this option is always available, like a constant gun at the EU’s head, at any time throughout our CU-In negotiations, regardless of Lisbon’s timescale of two more years of bureaucratic wrangling.

Without agreement, our payments to Brussels stop, and cause a cash shortage in the Brussels bureaucratic ant-heap. And a 10 per cent duty goes on all those EU luxury car imports: the EU would begin to unravel, and the lines from Stuttgart, Munich and Wolfsburg to Berlin and then Brussels, would go red hot, unless…

So, who to vote for on 22 May? If you still want In, vote Labour or Lib-Dem; and if you want Out, vote UKIP; and if you don’t know, vote Conservative, because as a party they don’t know either. But if you want the In and Out magic bullet, who do you vote for?

Tricky as things stand, but one politician even referred recently to the EU as a Customs Union, and has obviously been doing some homework: it was Nigel, in the second BBC debate, and I sensed he was ready to say more, before Nick voiced the fatuous idea that our Parliament originates 93 per cent of our own laws. Nigel had no need to say more to win the debate, without mentioning his Brexit strategy.

What’s holding our man-of-the-people Nigel back – especially as he is working with the grain of history, of bringing power back to the people? It could be UKIP’s own members, many of whom just want to leave by the back-door and slam it in the EU’s face!

Well, some may sympathise with their attitude, but Nigel could win them this coming election, and many seats in the 2015 General Election too, and financial support as well, if he adopted a statesmanlike approach to the CU-In, and finessed an EU-Out exit, via the front door.

Now that would make UKIP the only rational party to vote for at both elections, and the model for any country – France, Italy perhaps? – seeking to regain sovereignty over its own affairs.

It’s time to lead the way out of this zero-growth, debt-ridden, bureaucratic one-size-fits-all EU with its 26 million unemployed, and develop a Democratic Confederate Europe around the CU – Un Union des Patries! – leading by rowing our own boat again. Roll on Henley!

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