Opinion – Fog in the Channel: Brexit through the eyes of international trade | Bruegel – John Gelmini

English: The City of London skyline as viewed ...

English: The City of London skyline as viewed toward the north-west from the top floor viewing platform of London City Hall on the southern side of the Thames. In the foreground: Dixie Queen and Millennium Time at Tower Millennium Pier. This is a 5 segment panoramic image taken by myself with a Canon 5D and 24-105mm f/4L IS lens. (Photo credit: Wikipedia)

This is an interesting piece from Dr. Alf, citing this Bruegel article, however, key facts are missed which point to a different conclusion.

To begin with, there will be a two-year transitional period before the UK can extricate itself from the EU and the UK already has a running deficit of £3 billion GBP a month in terms of balance of trade but only had its AAA credit rating downgraded to AA by 2012 despite this monthly deficit being the case since 1981, 35 years. This is because the UK makes money from “invisible exports” from the City of London, has enormous arms trade via BAE Defence Systems and is able to make more money offshore through its activities in 40 different tax havens which it controls. This is apart from London being the tax laundromat of choice for Russian oligarchs, African dictators, organised crime, foreign plutocrats, deposed leaders in exile and other “arms length ” defence related businesses which sell security services and cyber defence but in reality are still part of the UK Government.

Economic meltdown, if it is to happen at all, will be in places like Wales and Scotland which neither this Government or its predecessor really care about and which will want to remain in the EU anyway once the Barnett formula handouts ceased.

There will be no meltdown in London, the Home Counties or Cambridge which are benefitting hugely from Chinese, American and Arab investment which is the area that carries and subsidises the rest of the country.

The rest of the UK needs to be brought along too but the reality is that most of it is an economic drain on the rest of the country which produces more than it consumes.

The trade imbalance with the EU is primarily on cars from Germany, as a Mercedes owner of 24 years standing across that great marque I am a “believer” but this country is capable of making its own luxury cars.

The EU has not created the millions of jobs that were promised at the 1975 Referendum, has not prevented European war and has not provided us with the more powerful negotiating position that was promised at the time.

The EU costs us a nett £12 billion GBP a year plus the costs of regulation and plus the tax revenues we lose as a result of Luxembourg, and the Dublin Financial District.

The 5-year claim for agreeing on new trade relations sounds bogus to me because on that basis a new country created tomorrow would not be able to trade on any basis with the EU even if it wanted to.

The UK would have the existing arrangements for 2 years which in my arithmetic means 3 years, not 5.

In any event, the UK can trade with South America, SE Asia, America or any of hundreds of places if it can raise its game and it can do so on the basis of arrangements which already exist.

The issue is poor educational standards within the UK state system, low worker productivity and poor worker skills. These can be addressed by using the money now spent on EU budget contributions and controlling immigration, healthcare and local government costs. This will require a different Prime Minister willing to take very tough action rather than the lame duck Cameron.

John Gelmini

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