torsdag 10 januari 2019

The EU suits the UK just fine. Actually, no.

‘The EU suits the UK just fine’, argued a commentator in the Guardian. They were just asserting, but no, it does not.

British manufacturers can never compete on equal terms with German manufacturers in sales to continental Europe. They start off with a transport cost penalty of about £100 per cubic metre shipped. That figure rises, the further the producer is from a Channel port with frequent RoRo services. It is a simple fact of geography. Denying that does not change the situation.

Then there is VAT, a condition of being in the EU. It would be difficult to think of a more damaging tax. Like all taxes with the exception of taxes based on property values, it takes no account of the geographical factors which affect ability to pay tax, and consequently amplifies the effect of regional economic disadvantage. Why the EU persists with this terrible tax is a mystery, since the EU itself is aware of the extent of the fraud which it generates. It is not inherent to the EU project, but the fact that its governing bodies take it as an unchangeable given gives no confidence in the organisation.

The same applies to the Single Market's tariff regulations, applied against all outside countries, which UK exporters will now have to face. It is not understood that the main victims of tariffs are consumers in the countries INSIDE the tariff barrier, who have to pay through the nose for everything, and, worse still, manufacturers who have to pay more for components and raw materials, which makes them less competitive.

The overall effect of this is, as intended, to shift the balance of trade to within the EU, which of necessity reduces the proportion of trade with the rest of the world. If people in a country want to export, they have to import in order for the export destinations to have the foreign exchange to purchase that country's exports. The primacy of imports over exports is not understood these days due to the resurgence of the mercantilist thinking which dominated EEC trade and economic policy from its inception, and which is now the driving force behind Trump’s policies, where the losers are all US producers apart from those in the protected sectors. Because of the logistical factors I referred to above, the UK cannot afford the reduction in ROW trade, neither as importers nor as exporters.

It goes on and on. UK and Continental legal systems are based on different principles and are fundamentally incompatible. There are, for example, features of the legal system in Sweden, which anyone familiar with the UK system would find shocking, including the length of time spent remanded in custody, and the lack of a jury system. I know personally of one case of suspected attempted murder which was not even brought to court, but which in a British court would have been thoroughly tested by a prosecution witness before a jury.

If you think the EU structures suit the UK just fine, you need to take a closer look.

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