A Smooth Brexit: Project Fear becomes Project Fail

The shocking campaign of dishonesty known as Project Fear has crashed along with the credibility of its proponents. The FTSE is soaring, and latest data show alleged pre-Brexit damage to the economy just didn't happen

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Britain's a great country to trade with post-Brexit
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John Redwood MP
On 30 June 2016 16:16

Latest figures show retail sales up, average earnings up, employment up  and continued economic growth. The fear of Brexit on the run up to the vote did not depress the economy in the way forecast.

It is good news that bonds are so strong, and shares have rallied after an initial relapse. Government needs to instill confidence and work as it used to to promote investment, job creation and economic progress.

I have been in discussion with the government about how we can best ensure a smooth and early Brexit. Most people want a speedy move. Those who want out do not wish to wait for long until the result of their vote is achieved.

Many people who voted Remain did so from their professional and business backgrounds, as they worried about what the uncertainty might do to confidence and activity. Some also worried about what terms we will secure for continued trade and investment.

We need to move in a purposeful and friendly way to achieve an early settlement which deals with the worries and fears of those who voted Remain.

The aim should be to secure the main point of the campaign, taking back control, as soon as possible. We will have only achieved this aim when we have repealed the European Communities Act. We can also reassure and make it easier to achieve exit by taking over all the current EU laws and rules and incorporating them en bloc into UK law, so nothing else changes other than control.

This should reassure our former EU partners and assist the negotiation over trade and other matters.

Once we have taken control we will need to legislate urgently to put in place the points system promised to control migration from the rest of the EU. This matter is not negotiable. We will also need to take back our contributions, so we can get on with the spending and tax plans set out in the Leave campaign.

The negotiations with the rest of the EU will centre on how many other changes they might like in our current business regulation and trading arrangements.

These will be agreed. The UK need not seek any changes to the current arrangements to minimise disruption. The other 27 will need to decide amongst themselves what additional barriers, if any, they want to place on their trade with us, and then negotiate them with us bilaterally.

I would be surprised if they wanted to impose much by way of impediments to their trade. So far, they have not suggested any I have seen, other than trying to cancel the financial sector passports.

I have written at length on possible responses to this. Under World Trade organisation rules there are strict limits on tariffs on most items anyway which would keep them to low levels, well below the recent fall in the value of the pound which has improved our competitiveness.

The situation is very different from trying to negotiate a free trade agreement with a foreign country that has high tariff and non tariff barriers at the moment. There it takes time as each side weighs up the advantage of surrendering a protection it thinks matters, even if the protection is in fact self defeating.

This negotiation starts from free trade and common rules for some services between us and them. The only question is, therefore, why change anything? What do they want to change as punishment, and is it legal to do so under global rules? Won’t it do them more damage than us?

As it is more imports than exports for us, there are plenty of other places around the world who would like to sell to us if the EU decides to become dearer or more difficult.

Once anger has been calmed and business has lobbied them not to do damage, it should prove easier to achieve a decent answer for  both sides.

Mr. Redwood's writing is re-posted here by his kind permission. This and other articles are available at  johnredwoodsdiary.com

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