Boris Johnson and the Conservatives winning a more than impressive 365 seats last December, it gives the PM a working majority, something we haven't seen since the close of the Blair/Brown era.It is fair to say that the next step of Brexit will soon be taken; having left the EU further delays for implementation legislation were not tolerated. But with a bold ambition to formalise a free trade deal with Europe by the end of 2020, the new Government must be clear that it will not be delayed, distracted or diluted. Ahead of opening the trade discussions with the EU, the UK Government should commit to these principles as a practical way to ensure we can reap the benefits of free trade by the end of the year.
This article will outline the top 15 priorities for the government during and post Brexit, relating to what is essentially trade policy and foreign policy. Please note this is not the domestic priorities of the government so issues such as housing and policing are not included.
Write in law that the UK will leave the transition arrangements on 31st December 2020
There is still a possibility, all be it a small one, that this could happen – the deadline for a trade deal extension is 30th June 2020, and considering how passionately Mr Johnson spoke of 'Getting Brexit Done' in his election campaign, I highly doubt there will be at any risk of seeing a delay like that which was under the government led by Theresa May. However, since the Prime Minister has a 'stonking majority' then why not use it and pass an act which prohibits further extension in leaving the European Union. It is important that we have good, fair trade deals with not just the EU but the rest of the world and to negotiate those beneficiary FTAs you need to have deadlines and know that the 'partner' you're negotiating with is actually working with you, not against like we have seen so far from the old EU Commission and Michel Barnier, pre-December 2019.
Not only, that the PM recently made clear to EU leaders that he wanted a 'quick trade deal' and then wanted to move onto "boost Britain's economy and eventually unleash our potential in January of next year", however following a meeting with Ursula von der Leyen, the new EU President of the Commission, a quick trade deal may be off the cards for PM Johnson. The former German Defence Minister said after a meeting in Number 10 Downing Street that the "EU and UK must prioritise as not every minor detail of trade can be negotiated in 11 months". This makes it ever more prevalent to ensure the so-called transition period of the talks do not overrun into next year and that by January we will have negotiated a good free trade deal that takes us out of the Customs Union and Single Market but allows us to create fantastic new trade deals with other nations and remain a crucial trading partner of the EU.
Continue to prepare for a WTO plus exit
Another unlikely factor but nevertheless, an important one, the UK is not guaranteed to agree a trade deal with the EU. The political declaration and treaty have been agreed, signed and passed through Parliament. We should keep preparing for a no-deal Brexit, on the presumption and worst case scenario that we somehow cannot agree with the EU on a trade deal, during the transition period – as I mentioned above, Ms von der Leyen doesn't believe a "detailed trade arrangement can be done" and she was supported by her chief negotiator Monsieur Barnier. Despite optimism from the British side, we cannot count our chickens yet and we must keep the pressure on the EU, we are in the best position we have ever been since we voted for Brexit on 23rd June 2016.
Although a no deal exit isn't what many people want, we must ensure that the EU know that we mean business, and now we have a winning hand to lay down some demands we couldn't have even dreamt of when Mrs May put forward her Chequers proposals. We must keep all options open to ensure we negotiate the best free trade deal possible, and there's no reason why that cannot be done, we already have many international trade deals secured but we mustn't forget the EU is just as important to get a deal with, but it must be a deal that works for us. It must be a deal that allows us to enjoy free trade with the US and Commonwealth, it must allow us to manufacture and export what we like, allow us to protect our own fishing waters, gets rid of the hideous CAP and don't forget that the EU rely on us for their imports of insurance, financial services as well as technical based industries. However, we cannot get the best trade arrangement possible if we scrap the option of no deal.
Set the pace and timetable for the EU FTA talks
First of all, when the transition period begins on 31st January 2020, we must make sure that we set the timetable and pace of the negotiations, a folly that would come to define Mrs May's handling of the political phase of Brexit. By squandering her majority at the snap election, the then PM lost all negotiating clout and was subsequently subject to the EU's timetabling, planning and pace of negotiations; the EU essentially had us exactly where they wanted us.
However, since Boris Johnson swept up 365 seats at the last general election, the negotiating power should be firmly in our hands and we have the upper hand – Johnson and his team need to ensure that the FTA should be negotiated by our guidelines, our timetable, our pace and most of all in our interest, something as much as she may have wanted to, Mrs May couldn't. The agreement of the political declaration which sailed through Parliament, saw most of the harmonisation and the foundations of the FTA laid, therefore allowing the Prime Minister to crack on and 'Get Brexit Done', to use the catchphrase which we saw so much in the general election run-in, in a matter of months at the very maximum.
Publish bold timetables for trade deals with US and Australia
Not only do we need to have a trade deal with the EU agreed by the turn of next year, but we also need an ambitious and prosperous FTA agreed with at least one but hopefully two of our closest allies. Over the last few weeks and months the Secretary of State for International Trade, Liz Truss, has been working tirelessly to negotiate a deal with our American friends and not only that even the President Trump's trade representative said that a deal could be reached "very quickly and very straightforwardly" particularly emphasising that agriculture and financial services would be the first to be agreed. It is crucial we have a deal ready to go live with the US, Australia and especially with developing economies such as India, Nigeria and the rest of the Commonwealth nations; nations who are eager to do trade with us, who want to buy British goods and services.
Once we leave the EU on 31st January and have entered the transition period, we can start negotiating trade deals with other nations on our terms that are tailored to our economy rather than the current EU system of trade deals with a one size fits none policy. Once one FTA has been negotiated, signed, sealed and delivered with a major trading partner then the others will flood in. Brexit is an opportunity to really, to use another election slogan, unleash Britain's potential and to trade with the rest of the world on our terms, not some cobbled together trade agreement negotiated by Brussels that must satisfy Germany, France, Italy, Estonia and Greece – all very different economies but are subject to that trade agreement. That is why we need to put ourselves first and get a superb trade deal with some of our oldest friends, the Australians and Americans as well as many others, including the Commonwealth.
Bust the myth of "no deal"
As the above article outlines, there is no such thing as a no deal Brexit, despite all the scaremongering and fear mongering there is very little to worry about with a no deal exit, although a good deal that works for Britain is obviously the ideal outcome. Without wishing to repeat the article in full, I will briefly mention a few key points that should have some attention drawn to them; first of all, there are procedures in place to ensure the continuation of flights and protection of holidaymakers heading to the continent, there won't be miles of queues at the ports of Dover and Calais, haulage will continue, all be it with minor disruptions and financial services will also be protected.
It is in the EU's best interest to get a FTA out of the transition period, if demand in Britain for goods and services from continental Europe drops, due to reciprocal restrictions or poor relations, for French wine and cheese or for German automobiles or for Italian food then it'll be the European Union and its businesses that will feel the brunt.
Build the narrative around free trade creating jobs
As we know, free trade agreements create jobs and this is exactly what Brexit offers the United Kingdom, for starters International Trade Secretary Liz Truss has been in detailed negotiations with Tees Valley Mayor, Ben Houchen, and MP for Middlesbrough South and East Cleveland, Simon Clarke, regarding the prospect of making Teesport, in the North East, a free port. The freeport initiative will not only be a huge boost for British trading on the international stage, but also create thousands of jobs in the North East of England a region has was neglected by the Labour Party under Tony Blair with the 13 years that Labour commanded a majority in the 2000s, whilst taking northern voters for granted.
The people of the North East realised the opportunities that Brexit held and none more than the prospect of a thriving economy which would be bolstered by freeports. Freeports are not the only opportunity for British expansion of the workforce, just this week airliner manufacturer Airbus announced plans to expand after Brexit, despite being the forefronts of project fear during the referendum. Brexit is the perfect opportunity to boost foreign direct investment in Britain and to revive the backbone of this country with a proud manufacturing heritage and to quote Napoleon, that we are "a nation full of shopkeepers", this is our time to shine on the global stage, to restore the boom we saw in the 1980s.
Roll back on anti-business policies
Many were severely disappointed with Sajid Javid's decision to reverse a promise of cuts to the level of corporation tax, currently it stands at a far too high rate at 19% all be it a lot lower than if Mr McDonnell had managed to get his hands on Britain's purse strings.It has been proven time after time that cuts in corporation tax increases investment in the country which provides a window of opportunity and with it a flurry of jobs – take the Republic of Ireland for example with a 12.5% CT rate, their tax receipts increased significantly following the cuts made to corporation tax. Below at the top of the sources is a report by the Adam Smith Institute on the matter which explains in more detail.
Even during the coalition government and David Cameron's majority Conservative government, free trade and pro-business stances were never really advocated to the extent Margaret Thatcher, Sir Geoffrey Howe and Nigel Lawson promoted free markets and essentially neo-liberal economic strategies. Small businesses are the backbone of the British economy with SMBs making up 95% of firms operating in the UK in 2019; the government need to introduce more policies, tax breaks, grants (similar to the Entrepreneurial Grant in the 1980s) and other business friendly initiatives, but especially those which encourage innovation. Brexit provides a wide platform for British technological development, as outlined in the article on the importance of artificial intelligence post Brexit.
Clearly reject non-tariff and invisible barriers to global trade
The EU were more than keen shall we say to introduce a 'level playing field', essentially alignment with the Single Market, with the Commission claiming that a "wide and ambitious trade deal can be negotiated" but must include "guarantees of a level playing field", these concerns from the European Union mainly refer to post-Brexit tax arrangements for British firms and investment, for example the lowering of corporation tax in the near future – as explained in the previous point (although dropped in the 2019 manifesto, it could well be included in the 2021 budget). Another sticking point for a level playing field that Barnier has flagged is subsidies to British based firms which may threaten competitiveness of EU based firms on a global stage, this may include subsidies and assurances like those given to Nissan UK by the previous government.
Furthermore, the EU has laid down their concerns over regulatory alignment with European standards on goods, for example food standards – a favourite subject for project fear! Make no mistake, British food will be just as safe to consume as when we were in the EU, there is a choice whether or not to eat chlorinated chicken or other imported foods – why should we comply with EU legislation and regulations when we are no longer part of the body? It seems rather foolish that any self-respecting nation would continue to abide by rules of a body which it is no longer part of, and this doesn't mean that we drop all standards and regulations but we can tailor them to our needs.
We cannot let this hinder or become a stumbling block for any nation we wish to negotiate a trade deal with in the transition period, the Prime Minister has already made clear that he intends to break away from EU laws regarding regulatory alignment, something which the Commission isn't best pleased about. Mr Johnson has been clear that he wants to "turbo-charge the economy" with freeports boosting tariff free trading, less regulation (most rules imposed by the EU often protects rent seeking corporations rather than small/medium sized businesses) as well as tax cuts which could reduce production costs, making British goods more attractive in foreign markets as well as making the UK a more attractive place in which to invest. However, this is what particularly worries Von der Leyen and her team of EU bureaucrats, the prospect that EU firms may be less attractive to trade with than British ones and the PM needs to stand his ground and to quote Enoch Powell on Thatcher during the Falklands War "we shall see what metal (s)he is really made of".
Assert our freedom to set our own tax policies to attract global investment
Again, this has heavy reliance on tax cuts which were key promises in the Conservative manifesto during the election with a key emphasis on income tax thresholds being raised and the bands being adjusted so that hardworking folk keep more money for themselves and their families. Not only that, income tax changes have a positive knock-on effect for small businesses with sole traders only paying income tax on their earnings rather than CT, and as the Chancellor has made backing small businesses a hot topic on his agenda. We are likely to see these tax reforms in his March 2020 Spring Budget.
Further down the line, following the transition period taking us to 2021, and hopefully several new trade deals agreed, corporation tax maybe reduced to a similar rate seen in Ireland which may attract more foreign investment and other global ventures which have boosted the Irish Treasury's tax receipts, as we are often told, less is more and in this case it is certainly true, less tax yields a greater revenue in the long run and leads to a positive multiplier effect such as increased employment which, in turn increases tax receipts in the form of income tax and national insurance.
Freeports again have a huge impact on global trade and the initiative doesn't have to stop in Teeside with ports such as Bristol, Southampton and Liverpool – Liz Truss added to the PM's enthusiasm over freeports, reiterating that "freedoms transformed London's Docklands in the 1980s and free ports will do the same for towns and cities across the UK" with a lot of these places lined up for freeports being from the so called 'left behind areas'.
Additionally, demand for British goods in non-EU markets is rising quicker than ever seen in recent times, in 2019 alone, British firms' global exports totalled at £679.5bn which saw a sharp increase from 2018; 53pc of British exports in 2019 were exported to non-EU countries showing that there is no total reliance on the EU for exports as some may like you to think and finally exports to non-EU countries in 2019 was up by 7.5pc from 2018 according to the Department for International Trade and the Office for National Statistics. Moreover, UK exports rose by £5.1bn in the three months leading up to November when the ONS conducted their 2019 aggregate, where in the same period it was found that exports were to the value of £177.5bn in this period; we will get Brexit done on January 31st and if these figures continue to expand there is a guaranteed success rate of the whole process, by getting it done it opens so many doors to international trade with non-EU firms and nations, placing British produce and business at the heart of the world economy.
Commit to take back control of the UK's fishing waters
For too long the Common Fisheries Policy imposed on us by the EU has been holding our fishing industry and fishermen to ransom. British waters and fish stocks have been essentially depleted by EU fishermen and large-scale fishing corporations. Brexit gives us the chance to regain 70pc of our fishing waters and really base an industry around it and compete seriously with nations such as Norway, Iceland and the Faroe Islands like we once did. Britain should be in charge of who fishes in British territory and shouldn't be subject to agreements which subject British fishermen to untenable business positions which threatens livelihoods.
Draw a line under financial contributions to the EU
Possible one of the greatest benefactors of departing the European Union is the financial contributions we make to the institution; Britain always has been and would have always been a net contributor if we had not voted to Leave in 2016. The last time we actually negotiated successfully with the EU in terms of finance was when Margaret Thatcher negotiated the rebate in June 1984 to be introduced in 1985, that was a generation ago.
In her Bruges Speech, the Iron Lady spoke of freedoms of nations and held a strong emphasis on economic freedom, with her especially opposing a single currency and Central Bank like we see today following the signing of the Maastricht Treaty in 1992. She was right in the fact she predicted that the Euro would fail due to the adoption by all EU member states, bar a few including ourselves, each with their own versatile economy and economic values, consequently Maggie was proved right (as usual!) in the collapse of the Greek, Italian and Spanish economies.
We may be paying a price of £39bn, or £33bn as a recent report on the financial settlement of Brexit showed in the Commons Library, to leave but in the long run, this is a small price to pay for our freedom from economic dictatorship that the EU imposes as it ever progresses to a United States of Europe and continuously chips away freedoms of nation states until there is nothing left.
Commit to ruling out any European Court of Justice jurisdiction within the UK
Courts have been a hot topic on the agenda from the jurisdiction of the ECJ all the way to domestic courts such as the Supreme Court ruling Boris Johnson's prorogation of Parliament was 'unconstitutional'. However, I shall only focus on the ECJ in this entry into my list of priorities; firstly, I would like to share a quote by the great actor and staunch Brexiteer Sir Michael Caine "I'd rather be poor but master of my own fate than being made rich by someone I don't know by running it" and the actor also exclaimed that "at least if we make bad decisions, they're our bad decisions and it's our politicians held accountable".
It is paramount that we have no jurisdiction of the ECJ in our legal system, for the overriding fact that European law, which is drawn up in the European Parliament and Commission and enforced by the ECJ, is supreme over British law and that would still be the case if the ECJ kept their jurisdiction over the UK post Brexit. The WAB passed by the PM ensures that Britain will only remain under jurisdiction until the end of the transition period i.e. December 2020 but as the article referenced below by Hugh Bennett for BrexitCentral states we must be certain there is no possibility of 'back door involvement' of the ECJ in our courts. However, Clause 174 of the WAB effectively subjects the UK to some ECJ jurisdiction, similar to that imposed by Brussels on the former Soviet States, this would effectively allow the ECJ to have a say on EU citizens' rights, although it would only come into play for the lifetime of current EU citizens living in the UK and would likely have little impact on other legislation proposed by Westminster, a flaw in the Treaty, yes but as Martin Howe QC, Chairman of Lawyers for Britain, puts it a 'tolerable price to pay for our freedom'. Some jurisdiction of ECJ law may not have too much of an impact as although there are many disagreement on minor laws and clauses, the EU and UK are aligned on lots of legislation and the disagreements would be in the minor details of laws and the obligations of each.
Commit to an independent foreign and military policy
We need to make clear to the European Union that we intend to have no military alignment with Brussels and certainly no part in the EU army that is being proposed as a Common Defence Initiative by President Macron, the Remain campaign in 2016 said would never even be thought about, little to mention carried out. The British Army, the Royal Navy and the Royal Air Force should not be, in any possible way, be affiliated with an EU army or however it may be displayed as, yes co-operation as after all some of the EU nations are some of our oldest and staunchest allies but that shouldn't mean we must commit to a common defence policy. Veterans for Britain outline the most crucial points of not integrating with an EU army and are supported by Lt. General Riley who said that "sovereignty cannot be delegated, divided or relegated – if it is then it is lost" on the subject of defence this is prevalent as it shows that you cannot be half in half out of a policy like this and we must be firmly out.
We must also ensure we have an independent foreign policy, for example Britain remained neutral, as such, during the Iranian crisis that we've just seen and are still seeing. President Trump was met with backlash for the killing of General Soleimani by Chancellor Merkel and other EU leaders and delegates with the President of the EU Commission saying that "the use of weapons must stop now to give space to dialogue" and was reportedly upset with the actions of the President of the USA. Although we wish not to get involved with another conflict, Boris Johnson also received criticism from the EU and some leaders for failing to condemn Trump's attacks on Iran. Britain needs an independent foreign policy which allows HM's Foreign and Commonwealth Office to decipher foreign policy alongside the PM, Whitehall and Westminster, not Brussels and Strasbourg.
Commit to a non-discriminatory immigration policy
One of the Conservative Party's priorities is to reduce immigration and introduce a fairer points-based immigration system, similar to that used by the Australian government. The Home Secretary, Priti Patel, announced during the campaign trail that Britain would take steps to reduce immigration of low skilled workers and would ensure that the labour supply was subject to supply and demand rather than freedom of movement. Essentially, professions and jobs which demand the labour would see points increased or in other words, foreign nationals in that profession or qualified to that specification would find it easier to migrate into Britain than somebody in a low points profession which is not in demand for labour. For example, if there are two foreign nationals, one a doctor and another a low/non-skilled worker then the doctor would find it easier to emigrate to Britain as they have a higher point score as that profession is in demand.
This system is less discriminatory than the current freedom of movement, imposed by the single market and customs union of the EU which prioritises EU nationals over any other foreign nationals who would need a work visa to find employment in Britain which would take a lengthier process. EU citizens can easily get work visas due to the single market allowing the freedom of movement of people – something Ms Patel has been a vocal sceptic of both before and during her tenure as Home Secretary.
Commit to reuniting the United Kingdom
Once Brexit is over and done after the transition period, up until December this year, we can look at reuniting a fractured union. Upholding the Union of Great Britain and Northern Ireland is a priority; the rise of republicanism and nationalism in the home countries outside England and Wales was increasing over the last decade to say the least with the SNP 'yellow washing' Scotland in 2015 and then again gaining the overall control of Holyrood as well as the vast majority of Scottish parliamentary seats at the most recent general election; Plaid Cymru were on the rise and at one stage were in coalition with the Welsh Labour Party in the Welsh Assembly between 2007 and 2011 as well as taking four Welsh parliamentary seats in 2019 but have since reconciled themselves to Brexit which most Welshmen and women voted for. Finally Sinn Fein, with the separatist SDLP in Northern Ireland gaining seats in the most recent general election with Sinn Fein seven parliamentary seats, which they will not take, and the SDLP winning two seats meaning the House of Commons will have the first Northern Irish republican voices in recent memory.
When he was elected leader of the Conservative and Unionist Party, Boris Johnson said that protecting the union was paramount to him and even went as far as establishing the position of Minister of State for the Union, an office taken up by his good self. Brexit is the perfect time to unite the United Kingdom and England – leaving the "are you a leaver or remainer" rhetoric behind and getting on with creating a prosperous, booming but most of all united independent economy which is open to world trade and is an attractive place to invest in. Following the defeat of the nationalists in Scotland in the 2014 'indyref', there has been shifts both towards and away from independence, and it looks to keep moving away from the prospect of independence. The most recent general election showed that the SNP clearly won the most seats, but they were hugely outnumbered in support by unionists – those who supported the main unionist parties i.e. Conservatives, Labour (debatable!) and the Liberal Democrats among other smaller parties and independents who support maintaining the union of England, Scotland, Wales and Northern Ireland.
Support for the continuation of the union in Scotland has since been strengthening with support for Scottish independence receding somewhat. Furthermore, Brexit may have helped preserve the Union. The SNP will not be allowed to put in a hard border between England and Scotland. Logic also dictates that they will not support session without a deal being agreed with the remainder of the UK. Being outside of the EU will make the UK's single market and customs union of even greater importance.
Northern Ireland's place in the UK can be preserved through ending the Northern Ireland protocol and taking the legislative steps as set out in the article below:
Brexit provides the opportunity for the United Kingdom to prosper on the world stage and we need to do that as a united kingdom rather than a fractured one, we all need the union. It is genuinely of paramount importance that we do maintain the union and we come out of the transition period as one, unionism is more popular than nationalism as the 2019 general election proved with still significant support for unionist parties, even if the nationalists may have gained more seats due to split votes or whatever the reason may be. So to end this report, we can make a success of Brexit, it may not be immediate but we will and we need to do it as a United Kingdom, and we need to remain as one, as this fantastic union that has survived through the good and bad – though the years of history and this is the beginning of a new chapter, a new chapter that is filled with prosperity and unity.
Thank you for reading, please share your thoughts on this and please share this article. Also, if you would like to keep up to date with me, I'm on Twitter and Instagram @ethan_thoburn and The Bruges Group is also on Twitter @BrugesGroup as well as on Facebook, just search The Bruges Group.
Also, I would like to give credit to the fantastic contributions Guy Corbet made to my article, it wouldn't have been possible without him and all other authors I have linked articles to.
Sources:
https://www.adamsmith.org/blog/what-we-really-dont-like-about-corporation-tax
https://www.bbc.co.uk/news/uk-politics-46393399
https://www.bbc.co.uk/news/uk-49325620
https://www.telegraph.co.uk/news/2020/01/13/britain-should-prioritise-american-trade-talks-eu/
https://www.ft.com/content/e5c4c022-b473-11e9-8cb2-799a3a8cf37b
https://www.instituteforgovernment.org.uk/explainers/eu-trade-what-level-playing-field
https://www.ft.com/content/30a1b750-1d36-11ea-97df-cc63de1d73f4
https://www.bristolpost.co.uk/news/bristol-news/boris-johnsons-free-port-plan-3174957
https://www.bbc.co.uk/news/49198825
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8039
https://brexitcentral.com/leaving-ecj-vital-legal-back-doors-closed/
http://veteransforbritain.uk/whitehallbriefing/
https://www.cnbc.com/2020/01/08/world-leaders-react-to-iran-attack-on-us-bases-in-iraq.html
