WHEN the Business Secretary Greg Clark said at a recent CEO summit that, in his experience, business is normally impartial and deals with practicality, he is generally correct. Of course this supposition always has to be framed by the knowledge that business will naturally act in its own interests and individual businesses will act in their own narrow, vested interests.
However, we are not living in normal times and some parts of the business community will view their long term interests in the light of protectionism and, worse, currying favour with political masters in their homelands in the case of foreign multinationals, and with the EU establishment in general.
If the reader believes this to be unlikely or fanciful, then read on.
Take the Airbus case first of all.
They claimed that they may relocate in the event of a “hard” World Trade Organisation global trade Brexit, possibly relocating to China or the Far East or somewhere in EU. As many of these locations are outside EU, what is the logic unless they wanted an excuse to do it anyway? It certainly can have nothing to do with Brexit.
Furthermore, given that they would find it difficult to find the advanced technology skills to make wings elsewhere, as the expertise is in the UK, the threat appears to be a paper tiger – Project Fear 2.0.
Airbus claims one of their motivations is uncertainty. However, the best way to secure certainty is to declare now for WTO terms and prepare in earnest to leave in March 2019, but it is Remainers like Airbus that have been frustrating this.
Airbus claim they want to remain in the Customs Union in order to avoid costs and yet tariffs on aeronautical products are zero and even if they had not been, tariffs on components are only charged once, however complex the supply chain.
Non-tariff barriers are already dealt with easily on a daily basis with components entering and leaving the EU under WTO rules. Most trade in the world and trade with the EU is conducted in this way, under existing WTO rules.
This is classic of a foreign multinational that clearly cares less about the UK but is trying to dictate our future. Airbus is intrinsically wrapped up in the EU. Two major shareholders are the German and French governments. Its Global CEO, a former German Army officer, is a senior figure in the secretive Bilderberg Group, a favourite haunt of one George Osborne and whose recent meeting concentrated on destroying “populism”, otherwise known as democracy, in the interests of the global elite.
The arguments put forward by businesses like BMW are equally risible for many of the same reasons.
Speaking to businesses in the supply chain of auto manufacturers, it quickly becomes clear that the trade associations have concentrated only on the negative aspects of Brexit.
For example, in talking of complex supply chains, no account has been taken of the fact that the UK can choose to remove tariffs on raw materials or components post-Brexit, provided we are not in the CU or Single Market . This can be done through trade deals, or unilaterally, and will make UK car production even more cost effective as no longer will German component and auto manufacturers be able to treat Britain as “treasure island” with inflated prices.
We may of course decide to retain tariffs on finished cars which would mean that continental produced vehicles will be more expensive, leading to more purchases of more competitively priced cars produced in the UK. British produced cars will still be cheaper when exported to the continent than they were on referendum day given our competitive currency.
If we do trade deals with other countries, and this includes zero tariff cars, continental producers will have to compete at world market prices to sell their cars in Britain and the cost of these vehicles will necessarily fall, margins for German producers will be squeezed and the UK consumer will benefit. The only way to counter this will be to produce more cars in the UK. We win again. Is it any wonder the mercantilists of Germany are determined to undermine Brexit?
It became clear to me when I visited the elite of German manufacturing, administrators and academics in Berlin 18 months ago that the whole of the German establishment would line up behind Angela Merkel in giving the UK a punishment beating in support of the “EU project” – an emerging EU super state. The clear message was that continental businesses suffering or dying as a consequence would be considered mere collateral damage.
What is more puzzling is why the likes of Greg Clark and Philip Hammond, should think that supporting businesses who export to the EU over and above the rest of the economy is the right thing to do. Perhaps they are thinking of their future non-Executive careers. After all, only 13 per cent of the UK economy is dependent on exports to the EU while 87 per cent of the economy will benefit disproportionately from Brexit.
To read John Longworth’s piece for the Express in full, click here.