According to the website “Visual Capitalist” the UK is the fourth richest country in the world – ahead of Germany (5th) and France (7th). We have total wealth of $9.9 trillion with China (24.8 Tr) the second richest and the USA (by far the richest with $62.6 trillion). With increased inward investment, record job creation, the lowest financial borrowing for 17 years and booming high tech the UK is well positioned for a clean Brexit on 31st October.
According to The Heritage Foundation’s 2019 Index of Economic Freedom, the United Kingdom has the world’s seventh-freest economy. The other three leading EU economies Germany, France, and Italy, ranked 24th, 71th, and 80th, respectively.
Meanwhile UK wage growth (3.4% pa) continues as inflation fell to 1.9% in May. In the three months to May 2019, both the amount spent and the quantity bought in the retail industry increased by 1.6% when compared with the previous three months. Sales in the year to April were up 5.2%. And as Samuel Toombs of Pantheon Economics commented:
“Retail sales figures are a timely reminder that political uncertainty is having no impact on household overall spending”
Indications of future inflation are good as producer price index grew by only 1.3% in the 12 months to May 2019, down from 4.5% in the 12 months to April 2019.
As global confidence grows in Britain, we retained our position as the top destination in Europe for foreign direct investment. The country managed to attract £1.48 trillion of inwards investment stocks in 2018, which is more than Europe’s next biggest economies – Germany and France. This leaves Britain the third-largest investment hub in the world, behind the United States and China.
Lilium, a Munich-based startup developing an all-electric vertical take-off and landing (VTOL) device, has announced that London is to be its new software engineering base. This, says the company, will create “hundreds of high-end software engineering roles” in the U.K.
“London offers us access to a rich talent pool and an environment that’s well-suited to delivering the extraordinary”
So as German politicians attack the UK for leaving the EU, German industry says they are better off in the UK! No wonder – because the UK created more one billion dollar tech companies than any country other than China and the USA in past two decades – 72 – while Germany create a mere 29.
$5bn has been raised in the UK for tech start ups since January this year!
Borrowing in the latest full financial year (April 2018 to March 2019) was £24.0 billion £17.8 billion less than in the same period the previous year; the lowest financial year borrowing for 17 years.
357,000 jobs have been created over the last year and even Chancellor Hammond has managed to build up a £26bn reserve. Nearly £9bn of home mortgages were approved in April covering 43,000 mortgages – the highest level for 12 years
READY FOR NO DEAL
The Transitional Simplified Procedures (TSP) would allow UK firms to import goods from mainland Europe without filling out new customs declarations at the border. UK businesses would also be allowed to postpone the payment of import duties for one year.
Before firms can register for TSP they have to apply for an ‘Economic Operator and Registration Identification’ (EORI) number from HMRC. UK businesses that have only ever traded inside the EU will not have an EORI number. But in the event of no deal, an EORI number will be a basic legal requirement and
so far 69,000 firms had signed up for EORI status by 26 May – less than a third of the 240,000 EU-trading UK firms estimated to need one. The Bank of England’s Carney says that 150,000 firms have yet to obtain the requisite paperwork.
It is estimated that it would take “at least four to five months” to improve trader readiness for new border checks. BUT THERE ARE 4.5 MONTHS LEFT!! So there should be no problem.
Jesse Norman MP, who was recently promoted to be Paymaster General and Financial Secretary to the Treasury, has admitted that “no deal” for the UK “would not be an economic disaster”, and calls for No Deal to be “firmly brought back into play”. He explains why:
“As Minister of State in the Department of Transport, I was responsible for much of our Brexit preparation, especially in freight and road haulage. I saw directly how the possibility of No Deal improved the engagement and commitment of other European nations in working with us. So it will be here”.
Even Sir Mark Sedwill Cabinet Secretary and Head of the Civil Service, previously one of the cynics about no deal preparations, has now said that those preparations by the civil service were among “most impressive pieces of cross-government work” he had seen.
And OECD chief Jose Angel Gurría expressed full confidence in the trading implications of a no deal Brexit:
“What’s the worst scenario? A no deal, WTO rules…the whole world is running by WTO rules these days!”
Sam Woods, deputy governor of the Bank of England has said that after Brexit, City regulation could improve with a “more British style of regulation which is still tough but has less detail in legislation and is more dynamic and forward looking”
And the EU is prepared for a clean Brexit on 31st October. As the UK Government official briefing states: https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8547
In addition to implementing the EU’s no-deal preparedness legislation, Member States have also made their own plans to mitigate the impact of ‘no deal’ on their economy, trade, business, services, transport and a range of other sectors. Many have planned border and customs adaptations, for example. Those with major ports (e.g. Belgium) and significant trade with UK (e.g. the Netherlands) have provided extra border infrastructure and new technology systems, and recruited extra customs or veterinary staff (e.g. France, Ireland, Poland, Netherlands, Spain). Portugal is planning to open special lanes for UK tourists at airports.
IRELAND IN TROUBLE ON BREXIT
Now that a no deal Brexit (that is a true Brexit) is looking probable the Irish Government is faced with a hard border imposed not by the British but by the EU. Everything has been turned on its head with Helen McEntee, Ireland’s junior European minister, saying that in a no-deal outcome, it would be very difficult for the Irish Government to reconcile its obligations to the EU with protecting the Good Friday Agreement.
And we see from figures compiled by the London Consultancy Primary Access that Ireland is umbilically tied to the USA and UK – not the EU:
“Ireland has €93bn committed to the US, and €88bn to the UK in direct investment abroad; the comparable numbers for France and Germany are €4.4bn and €3.1bn respectively. The same pattern repeats in terms of inward direct investment. The US has €179bn, and the UK €58bn invested in Ireland; France has €15bn and Germany €5bn”.
While the Irish people in general know who their friends are (as during the war when thousands signed up in the British army to fight Nazism) the Irish political class are not so reliable (as the de Valera Government showed – see “And into the Fire” chapter 15 https://www.amazon.com/and-into-the-fire-ebook/dp/b00e68o9sg)
The Irish (https://www.bbc.co.uk/news/uk-scotland-48566832) have even courted conflict with Scotland and its fishermen off the the remote British sovereign island of Rockall – where following Brexit their fishermen will no longer be able to fish (because they will become British not EU waters). Ireland in every respect belongs with its friends in the USA, the Commonwealth and the UK not the remote European Superstate whose currency has proved so disastrous for the Irish economy and whose bureaucracy is so toxic for Irish democracy.
FINALLY WTO: THE DISPUTED ARTICLE 24
As usual Remainers have attacked any idea or institution which might facilitate Brexit. For instance the Governor of the Bank of England questions the use of the GATT Article 24 to carry on trade with the EU on existing terms after Brexit while a free trade deal is concluded.
As Freenations has pointed out and Ian Duncan Smith and David campbell Bannerman have pointed out at Brexit Central, after a clean Brexit the UK becomes a truly sovereign state – not an appendage to and prisoner of the EU (as in the May deal). Of course the EU could refuse to consider a trade deal with its biggest trading partner with whom its has a massive £95bn annual goods trade surplus and could accept the extra costs of billions of pounds a year in tariffs (Some £13bn per annum which would go to the British taxpayer!) but given the status quo ante where trade is free only a suicidal EU would refuse to negotiate a trade deal. In circumstances where a trade deal is the aim and in prospect then Article 24 of the WTO kicks in and existing terms continue until a formal agreement is reached – with up to 10 years to do so.
The EU has no choice but to operate within WTO rules. It has negotiated a free trade deal with Canada and with Japan – neither of which, unlike the UK, had a previous trade deal. Whether Article 24 officially kicks in or not is less important than that the principal idea of an “interim solution” is recognised legally and internationally and only an overt aggressor would ignore the opportunity.
The UK will of course have paid its dues to the EU up to the date of exit (31st October 2019) and any other sums we might wish to contribute to future joint projects and mutual schemes in industrial or educational fields. But they can forget the “£39bn” plus.
Ironically Chancellor Hammond’s £26bn war chest plus the £13bn earnings from WTO tariffs equal the £39bn the EU is demanding – but won’t get!
