There is a lazy logic that due to COVID-19 the economy will be so battered that we should extend the transition period as the shock of leaving at the end of December will just further damage an already bad situation.
It will not surprise you that I feel that this argument is rather lacking in logic!
We are living through a very bizarre time in the western world where our Governments have decreed that the economy must shrink in the process of coping with a disease pandemic. Whether you agree or disagree with the reasons and methods, I think we can agree that they have been very successful in causing a very rapid and sudden drop in economic activity almost unparalleled in peace time history.
In order to fully capitalise on the opportunities that will follow, once the dust settles, we need to be very flexible.
The recovery is not going to be instant and will require bold and novel approaches to get the economy moving again. There is going to be the need for support through tax reliefs / holidays, subsidies, regulatory changes and other forms of government intervention. This requires flexibility from our policy makers, a flexibility denied to them if they continually have to navigate complex EU state aid, trade and other rules over which they have no control.
We are at present in what is rather euphemistically termed the transition period but instead of being a ramp to full exit it is simply full membership in all but name without any form of UK representation. This is a far from satisfactory arrangement and we have already seen the UK falling foul of EU state aid rules when trying to assist businesses to cope with the repercussions of the lockdown.
As a result of the pandemic trade patterns have changed very fast and in order to fully capitalise on the opportunities that will follow, once the dust settles, we need to be very flexible. Flexibility is going to be needed from individuals, business and government. We cannot find ourselves tied by rules written for another era. We are going to have to be able to position ourselves to face the new challenges, changing the regulatory framework to suit the new environment. Changing the taxation system to reflect the altered circumstances, to allow the pump priming effects of selective state aid to facilitate private sector investment in the future. None of this will generate the greatest impact if policymakers are constantly having to look over their shoulders to make sure that they are not going to receive a summons from the European Court of Justice.
One of the reasons why I campaigned to leave and why I feel so strongly that we must complete our exit on 31 December 2020 is that while we remain attached to the EU we have no clear way of holding our politicians to account. On almost any subject, important or minor when you hope or expect them to be able to do something the response is that “this is a policy area controlled by the EU.”
It is vital whatever, and even more so in these strange times, that control over how our country is run is vested in the UK Government and UK Parliament so that the lines of accountability are as clear and simple as possible.
There are a myriad of other reasons why it would be a very big mistake even contemplating an extension to the deadline.
Firstly: As long as we remain stuck in the present arrangement we are effectively held prisoner, having to pay the sums asked of us and subjected to the EUs laws without any way of seeking amendment or cancellation of them. We are also required to adhere to any new regulation that may be enacted by the EU, again, without any input into its drafting or implementation. The quid pro quo of this is that we remain part of the single market and enjoy continued unfettered access to this. Though this is convenient in many ways it comes at a very high cost and does not allow us to enjoy the benefits of controlling our own affairs.
Secondly: The EU has devised a plan to provide targeted support to various regions of the EU to deal with the repercussions of COVID-19 and as long as we are attached we remain liable to contribute to this and yet very unlikely to benefit.
Thirdly: As long as policy areas in the UK remain under EU control with the UK required to take instructions, without any way of tailoring to our own requirement, there is no incentive for the EU to make sure that it meets our requirements.
In the trade negotiations the UK has been requesting a Canada style trade deal of a similar pattern to those agreed between the EU & Canada and the EU & Japan. On the other hand the EU has been proposing something similar to the existing transition period. Once again the EU’s reluctance to face the fact that the UK is leaving means that they place in jeopardy their future enjoyment of the massive trade surplus they have with the UK at present. It seems extraordinary that preservation of the integrity of the single market comes before the wellbeing of those in the mainland EU whose jobs depend on exports to the UK. However it is in part this disconnect between those who run the institutions and the people over whom they rule that lead to the Brexit vote. It continues to disappoint me that despite the shot across their bows of Brexit the EU institutions continue to be deaf and blind to the needs of their citizens. Keener on the sanctity of existing EU systems and regulation than the preservation of employment and the wellbeing of EU citizens.
We have also had the intriguing sight of the EU negotiators insisting that the UK adheres to EU state aid and single market rules, administered by the ECJ, whilst member states disregard both. The pandemic has prompted Germany in particular to prevent exports of medical supplies to Italy and to support its industries with massive state subsidies in total contravention of EU regulation. Germany can of course get away with it whilst no doubt if countries such as Spain & Portugal, if they could afford it, tried the same they would be penalised. Portugal of course was the only country punished for breaching the stability pact because it was small and could be bullied but when both France and Germany breached it a blind eye was turned, the same will happen over state aid.
As we have always said: there will be bumps in the road as we embark on the role of an independent global player. However the period after the pandemic gives us a great opportunity, following this period of breakdown, to cast a new order and new systems of mutual benefit to ourselves and our trading partners. This can only be done if it is our Government and our Parliament that have full control over the actions of this country and the sooner we get that the better. The fact that there may be tariffs to deal with in our trade with the EU is not a big problem and in the time available our negotiators should concentrate on putting in place the procedures to deal with these in as frictionless way as possible. Sections of the airfreight sector have this down to a fine art and I am sure with a little thought their methods could be adopted by the road haulage and ferry sectors.
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