The deadline for an EU “deal to be done”, as Prime Minister Johnson put it earlier this week has been extended yet again. That’s a good thing, although I suspect that neither Britain nor the EU wish to give the impression that they are the first to walk away. Which means these so called “talks”, will likely continue all the way until midnight on December 31.
But Boris has made it very clear that the sides are very far apart on key issues. For those who have not been following the unfolding events, Britain demands control of all of its laws, all of its territory fishery waters and refuses to be locked into the EU’s regulatory orbit.
The whole point of voting to leave the European Union in June 2016 was not just about sovereignty and getting laws passed in Westminster, but having our own economic policy. I always knew there would be a big bust up over the fish, even though, in terms of value, it is less than 1% of our trade with the European Union. But the British fishing industry could once again return to become a future thriving enterprise, which may also make the Scots think twice about breaking away from the United Kingdom.
If Britain and the European Union fail to agree on a trading deal, the EU will NOT receive its £39 billion, which they desperately desire. But the EU are equally desperate to stop Britain in a post EU world, of having corporation tax rates slashed to 8%. I am told by an insider that this is another key area of dispute between Britain and the EU.
If the British Chancellor is able to lower corporation tax to 8%, Britain could become the Singapore of Europe and it would attract huge inward investment and become a major trading nation.
There are now many sensible remainers who rightly say, “Either we become completely independent or remain a major part of the EU”. None of this halfway house business, because it makes no sense whatsoever to leave the seat at the table, opt out of the vote, give away a veto, but still be under some sort of EU jurisdiction. Which is why Britain must be free of any EU regulatory restricted bureaucracy and attain full access to its fishing waters.
There are just a few days left to get an agreement agreed, signed off, approved in the House of Commons and in the EU and get it set up from January 1. But Britain needs to be ready for WTO terms and the government has made huge preparations for this, especially in the last two years.
Either way, whatever happens Britain will do very well as an independent nation free to make its own laws and trading agreements. The reduction of prices on food, clothes and footwear coming into Britain from outside of the EU will benefit consumers, because Britain can lift those tariffs. For example, up until now, the customs union protects Spanish orange growers. Now I wish Spanish orange growers every success, but why should we pay higher prices to protect continental producers? There is a 10.2% tariff on vehicles coming in from outside the EU. Why should excellent cars made in Japan be 10.2% more expensive than a Mercedes?
Remember the EU is desperate for a deal because it sells far more into Britain than we do into Europe. Plus they want a nice £39 billion to go with it. But Britain has a real opportunity for free trade.
Boris like any previous Prime Minister is naturally looking to survive as Prime Minister and therefore if he comes back with a bad deal that still ties Britain to the EU and their regulations and competition terms, there will be Tory MPs who will turn on him with vengeance. You will probably see Nigel Farage return to centre stage and Boris’ time at Number 10 could come to an abrupt end later in the year.
Another point to contemplate is that if you are going to sign a deal, you need a deal that will last and be a stable basis for your future economic relationship. If one side feels the terms are quite unacceptable, it will likely fall apart within 6 months. So a no deal would be better in the long run than a bad deal because business needs certainty.
Boris must therefore stand firm on matters like fishing and we do not want the European Court to police our new trade deals. We actually have a very good judiciary system ourselves, so we don’t need the Europeans deciding our legal matters. But competition is key and if Boris comes back from the EU with his hands tied and the Chancellor cannot implement rapid innovative schemes on taxation, then Mr Johnson is probably finished.