Jacob Rees-Mogg: Britain Beyond Brexit

Posted: January 27, 2018 by tallbloke in EU Referendum, Politics, solar system dynamics

moggThere is a great Brexit opportunity and some really obvious benefits that we can get that improve the condition of the people. This is currently at risk. The negotiations that are about to begin sound as if they aim to keep us in a similar system to the Single Market and the Customs Union. ‘Close alignment’ means de facto the Single Market, it would make the UK a rule taker like Norway, divested of even the limited influence we current have.

90% of global trade growth is expected to come from outside the EU but we would be tying ourselves to a system that seeks to protect the current, declining status quo rather than engaging with the challenge of the next generation.

Conformity with EU rules will also prevent us from making meaningful trade deals with other nations where we could secure reduction of the non-tariff barriers and regulatory distortions which are often worse than the tariffs. They impose such high regulatory burdens on importers that no-one bothers and they are not there for either safety or scientific reasons but for protectionist ones. No sensible nation would negotiate with the UK for a marginal gain when we would merely be a vassal of the EU.

The Customs Union is worse. It protects industries that we often do not have and helps continental producers on the back of UK consumers. The EU-funded CBI, that lover of vested interests, wants it to favour inefficient encumbrance against poor consumers. Whether it is ‘a’ or ‘the’ Customs Union it is a protectionist racket that damages the interests of the wider economy.

This would deny us some of the early Brexit advantages which relate so much to trade, to the ability to trade freely. Economic arguments for one way free trade, let alone for trade deals, are well known. For example, 21% of people’s income is spent on average on food, clothing and footwear. These are the highest tariffed areas in the Customs Union. 11.8% on clothing, 11.4% on footwear. Food is so heavily tariffed and obstructed that it is almost impossible to import.

This hits most on the poorest in society, the poorest who spend an even higher proportion of their income, even above the 21%, on food, clothing and footwear. The first gain that we can have is by removing all the tariffs on those goods which the UK does not produce thus giving a real terms income boost, most of all to the poorest in our society. To that group of people who Theresa May spoke about during her famous speech on the doorstep of Downing Street when she had just kissed hands and become Prime Minister. Just the people that Mrs. May wanted to help. I think Mrs May’s words were inspirational and should underpin what the Government does.

The United Kingdom, though, should be more ambitious than this and take the benefits of the best regulatory models and then challenge for global technological leadership.

Despite our relatively small geographic size we are still the second biggest exporter of services and one of the largest foreign investors, the United States being first in both cases. We are also an open and welcoming nation not least to foreign investment. We have both a large stock and regular inflows of foreign investment coming into this country, by some measures second only again to the United States and even bigger than China (excluding Hong Kong and Macau).

Such a nation should take responsibility for its own future and become a role model for the rest of the world. Already two of our universities are the best in the world. We have a high tech sector and are the site of the world’s premier financial centre. We must build on this comparative advantage in the knowledge economy. Surely we must become an innovative hub, a centre and driver of the world’s technological advance.

To do this we must ensure that our regulatory system promotes competition on its merits and thus enterprise. We should succeed or fail based on the quality of our ideas and our capacity for hard work, not on the ability to lobby the Government to get regulations or laws to obstruct competitors. Our system cannot be tied to regulations that stifle innovation.

At the moment the UK, in the European context, is the best of a bad bunch. Europe lags far behind other comparable regions in the Global Entrepreneurship Monitor’s ranking of the rate of business start-ups. All we manage is to be the best in a sclerotic Europe. Compared to the dynamism of the United States and Asia the UK has a long way to go to translate its brainpower, its little grey cells, into entrepreneurial companies.

To build this capacity is to make our nation ready for the next hundred years. In the future there will be a premium on creativity and judgement, in industries that rely on intelligence as opposed to pure manufacturing. The jobs that people, as opposed to Artificial Intelligence, will do will be in precisely the space where Britain has the greatest advantage.

This does not mean a nation of computer scientists. Innovation and creativity can be applied to the leading edges of any industry and it is these leading edges that Britain is in a position to capture. In a truly competitive, enterprise environment no one can know precisely what those industries are. Our success will depend on our ability to capture the most valuable parts of increasingly complex supply chains.

An example of this is the iPhone. iPhones are manufactured in China but the value is added by the research and marketing being done in the US which reaps the bigger advantage. Consequently, China sees only 6% of the value created.

As I said, we do not know precisely where these areas will be but it will always be important. Interestingly, New Zealand, which produces only 3% of the world’s milk, controls 30% of the value of the global dairy market. It is not just high tech areas that will be dependent upon this knowledge economy. It is even in traditional areas such as agriculture.

Taiwan has developed a system of growing vegetables in a water solution rather than soil using a patent formula of antagonist micro-organisms which boost production with low nitrate levels. It wants to develop this in York and should be encouraged to do so.

Unfortunately, in the United Kingdom there are barriers which may prevent us getting to this bright future. First, the UK-EU relationship may continue to tie the UK to the kind of regulatory framework which has made Europe so inefficient. This would be bad for the economic environment in the UK but it would also be bad for the ability of the country to deal with other, faster growing nations.

A classic example of this is data. If the UK were tied to the European approach to data protection and data flow – a very restrictive one – it will limit the ability of our country to embrace the fourth industrial revolution: big data and all that this offers. Without data flow none of those applications are possible.

It is all very well for UK Ministers to extol the virtues of artificial intelligence and high tech as they are doing now almost, as we speak, amongst the panjandrums in Davos. But no one will take them seriously if they do not have the ability to set their own regulations in this area. The European regulatory system is simply not conducive to the development of entrepreneurial companies. Those companies will continue to come from the United States and Asia. For the UK to be active in this area it needs regulatory autonomy. As Michael Gove has put it: the EU is analogue in a digital age.

Second, the UK must be in a position to encourage pro-competitive behaviour across the globe. Highly developed agreements like the Trans-Pacific Partnership (TPP) represent the blueprint for trade discussions in new areas involving services that rely on the cross border supply of data.

It is noteworthy that the EU was unable to agree to cover new services like these in CETA whereas the TPP members were. In order to do this the UK must be able to determine its own regulatory system and negotiate freely with others.

Third, contracting trade deals is difficult and requires great flexibility. Any restrictions, such as the EU having an effective veto on UK changes of regulation or the UK instantly losing access if there were any deviation without some pre-agreed mechanism to manage divergence, will take the UK out of the negotiating game.

Other countries would not think it was worth their while to discuss trade deals with us. We would merely appear to be a mini-me version of the European Union and thus be of no interest to other countries.

There are disturbing signs that the EU’s position on a host of internal market distortions will mean that it is unable to play in this new world. These are data flow, prescriptive regulations like REACH chemicals regulation, the precautionary principle in agriculture, local content rules in broadcasting which are mainly there to protect unwatchable French films.

In addition to being unable to discuss new services involving data flow in CETA it could not discuss them in the Trade in Services Agreement in the WTO either. A plurilateral agreement that like-minded countries agreed in order to improve trade in services around the world.

This prompted the Americans to question why the EU were in the discussions in the first place. Why were it there if it were not willing to do anything? For the United Kingdom, dependent as she is on our service exports and the creation and realisation of ideas, it would be foolish indeed to put our future into such constrained hands.

If the UK can achieve the independence necessary it can become a rule-setter in the world. It can export with its trading partners ideas about how best to create a governance structure that will spur innovation and enterprise. Its future can be true to its history.

As I said, encapsulated in this College, it is vital to ensure that competition, not cronyism, determines the future prospects of our citizens. Competition allows aspirational societies to be formed where people truly believe that they succeed or fail on their own merits and not some crony interest.

Britain’s success as a nation can be attributed to the application of this competitive principle. It has been translated through free trade and free markets and has allowed people to come together to meet each other’s needs in voluntary exchange.

We have reached the portals of tremendous possibility. If the UK is to execute an independent trade policy then it can play a role in ensuring that there is an injection of wealth into the global economy. This will improve the lot of all mankind and we, the British people, will be propelled forward on this rising tide.

To paraphrase Pitt the Younger we will have saved ourselves by our exertion and we will have saved the world by our example. If, on the other hand, this possibility is taken off the table then Brexit becomes only a damage limitation exercise. The British people did not vote for that. They did not vote for the management of decline. They voted for hope and opportunity and politicians must now deliver it.

If we do not, if we are timid and cowering and terrified of the future, then our children and theirs will judge us in the balance and find us wanting. ‘Mene, Mene, Tekel, Upharsin’ – as the writing on the wall said at the feast of Balthazar. We have our future and our destiny in our hands.

To embrace the world boldly with this new policy is not a foolish leap into the unknown. Sometimes the bold move is the safest one. As Sir Walter Raleigh said: “fain would I climb, yet fear I to fall.”

For too long our negotiators seemed to have been cowed by the EU. Their approach seems to be that we must accept what the EU will allow us to do and build from there. This is no way to negotiate and it is no way for this country to behave. We must negotiate from the international trading framework in which both the EU and the UK sit as equal partners, whose provisions govern our behaviour. We must also not confuse the EU’s opening bid with its bottom line, it is not Holy writ. If we came out with our negotiating objectives nobody in Europe would assume these were set in stone.

If the EU and UK, who start out with exact regulatory alignment, cannot agree some mechanism to recognise each others’ regulations and one that manages divergence without the UK being prevented from exercising its independence, then who can? Both sides’ negotiators must not fail here and I am confident that as long as we are strong and negotiate properly they will not.

I have talked about who we can be as a nation. We must also understand our particular role in the world at this critical time. The world’s economic architecture is stuck and the UK is expected by the rest of the world to advocate policies that will release its energy.

There has been no concluded WTO round for twenty-three years, while indicators show that actual industrial output and global trade are stalled. If the UK is unfettered by the deadweight of the EU then it will play a role in jumpstarting the global economic system. This will unblock many initiatives that have been gummed up for too long.

We must never forget that wealth can be created or destroyed, but it is much harder to create than destroy. We are coming to a fork in the road. We can take the familiar path that leads to a gradual erosion of our wealth, our success and ultimately our values, by staying close to the EU and aligning our regulations to theirs.

We could simply manage decline. Or we could take another road that may look to us now like an unfamiliar one. In which case our best days lie before us. From the Agricultural Revolution to the repeal of the Corn Laws to the birthplace of the Industrial Revolution to being co-architect of the post-war system the UK has led the way.

Britain has been called on to be a shaper not only of our destiny but that of the whole world. If we get it right by opening up our markets, seeing the benefits of free trade and regulations that encourage enterprise others will follow. The EU has too many pen pushers to dare, the US is too big to care. Only a medium sized, flexible economy can lead the way and the next great economic revolution should be made in Britain for the benefit of the world.

This speech (plus introductory remarks) was given by Jacob Rees-Mogg MP at Churcher’s College, Petersfield, 25th January 2018

  1. tallbloke says:

    There were 23 attendees at Theresa May’s speech in Davos. I think the Moggster would have pulled a much bigger crowd.

  2. tallbloke says:

  3. tallbloke says:

    Macron’s new party was started less than a year away from the French elections.

    Just saying.

  4. Jaime Jessop says:

    It still worries me that Jacob appears to be loyal to the prime minister when it is glaringly obvious that she will not stick to her Lancaster House speech and take us out of the Customs Union and Single Market. Davis has confirmed it. Perhaps he’s being clever and keeping his cards close, but the time to oust May is now, before she begins the second round of negotiations with the EU, before she agrees to make the first round legally binding.

  5. Bitter@twisted says:

    I see Mogg didn’t mention one of the biggest contributors to poverty….
    Green policies and their b@stard child, renewables.
    Even the Moggster has blinkers on this one.

  6. A C Osborn says:

    So what is HE going to do about it?

  7. stewgreen says:

    O/T “The Fracking War Is Just Starting”
    Yorkshire Post Whole broadsheet frontpage is anti-fracking
    plus double page spread inside.
    Now why would that be ?

  8. tallbloke says:

    AC: Nothing I suspect. Fine words but insufficient bottle to step up and out of the morass.
    Bitter: Green-Welly toryism is all about snouts in troughs and scientific ignorance.
    Jaime: The majority of the Tory parliamentarians are pro-EU, so it’s not going to happen.

    People who voted for Brexit have precious little representation now. UKIP is mired in internal difficulty, Arron Banks seems to have stepped back from founding a new party. Farage is swanning about on the media stage and the various Leave organisations don’t communicate or coordinate with each other.

    It’s a mess.

  9. A C Osborn says:

    Rog, as far as I can see it is going exactly according to the Tory plan, delay, delay, get as much opposition going as possible, slow the talks, give away anything they can get away with in the talks.
    May is doing a fantastic job for a stalwart Remainer.

  10. Stephen Richards says:

    tallbloke says:
    January 27, 2018 at 2:20 pm

    Be careful with that comparison Roger. Macron really did not have a party at the election and he was in a poor second place after the first round. There was also some suspicious activity from the EU in support of Macron in disabling the opposition. Macron’s popularity is diving and people who said they would support him are now disassociating themselves.

    However, there are enough good, hard working people in the UK, like yourself, to get a party of the ground and possibly defeat the money coming from the EU for May and Corbyn.

    I hope you can. If the Tories oust May soon, and I think they will, it will be tough to beat them but an alliance would be possible under certain circumstances

    Good luck to all.

  11. Stephen Richards says:

    Jaime Jessop says:
    January 27, 2018 at 2:50 pm

    Words Jaime. He has to support her until a stalking horse is found who will open the door to a challenge against May.

  12. J Martin says:

    I could never vote for Mogg and also would never vote for any party he became leader of. Mogg filibustered a bill to try out a 5 year period of remaining on British summer time, which had massive support and would have passed with a large majority. Filibustering should be made illegal, it is certainly unethical and should be viewed as if Mogg had used a gun to prevent the commons from voting.

    In my view Mogg does not have sufficient respect for democracy to ever be allowed to lead a political party, far less become Prime Minister. He is exactly the sort of politician who should be behind bars.

  13. Adam Gallon says:

    A complete cock-up. No plan post-Brexit, let the EU do all the running. Vassal state status for 2+ years. Flexcit was there, but ignored. http://eureferendum.com/Flexcit.aspx The Tory factions are more concerned with jockeying for position, UKIP just showed itself to be the Farage Fan Club, no plan for a post-Brexit UK, no succession plan once Farage strolled off.

  14. The Badger says:

    OUT means OUT . Some of us know what we voted for. If we don’t get it there will be trouble.

  15. erl happ says:

    De-centralisation fosters democracy.and respect for individual initiative. Mogg seems to understand that this is the consequence of Britain’s membership of the EEC..

    Centralisation is antagonistic to personal freedom. It adds to the statute books a multitude of restrictions favoured by wealthy elites. The stupidity of the concern about ‘global warming’ is an illustration of how things can deteriorate when a fashionable notion in elite circles,namely the concern for the ‘environment’, is taken to the extreme.It is no accident that this concern was taken up by the largest international bureaucracy, the United Nations. It’s staffed and run by an educated elite that share a common accent.

    I see no evidence from Mogg’s speech that he is truly an independent thinker.. This is a cut and paste exercise. He is very much a product of his privileged upbringing.

    Born to rule. Looks like the UK is stuck with what much the same as you have had for a very long time.

  16. michael hart says:

    “Bitter@twisted says:
    January 27, 2018 at 3:38 pm
    I see Mogg didn’t mention one of the biggest contributors to poverty….
    Green policies and their b@stard child, renewables.”

    Absolutely. One of the reasons the USA overtook the UK economically was an abundance of cheap energy, specifically surface-mined coal and oil.

    Today, if a politician actually said “We’ve found a way to shrink the economy every year for two centuries. What do you think? “, then they would be given the bum’s rush.

    Yet most politicians can’t see the insanity of increasing energy costs according to the will of Greenpeace. Anger, laughter, or despair?… I’m often torn.

  17. Bitter@twisted says:

    Not only that, Michael.
    Merkel’s other policy is to invite a million-plus, poorly educated males who’s culture is diametrically opposed to Western democracy and who will largely live off the taxpayer for the next 10 years at least.
    Was the German public consulted?
    Was it even legal?

  18. tallbloke says:

    I worked damned hard during the referendum campaign as the regional campaign director covering 10% of the UK population. I gave up a secure job to do it. As a 50+ year old I’m finding it hard to get back into professional work. I’m not amused by the failure of the Brexiteer ‘top brass’ to get their shit together.

    It seems to me that the only way we can assure a proper full-fat brexit and gain the advantages outlined in Mogg’s speech (regardless of whether it was cut’n’paste, it still contains a positive vision), is to construct a ‘dream team’ under the Brexit banner.

    17.4 million people voted for Brexit. If 10% of them joined a new party it would be the largest mass membership movement in the country. Movements need figureheads. Who should they be?

    Richard Tice representing the business world
    Jacob Rees-Mogg representing the brexiteer tories
    Kate Hoey, Frank Field and Brendan Chilton for the labour and union movements
    Major General Julian Thompson (Veterans for Britain) representing the armed services
    Fiona Mills (UKIP NEC) representing the NHS

    They need to talk to each other.

    It needs to be fronted by someone who has the charisma and broad appeal needed to forge the disparate Brexit groups into an unstoppable electoral force. Farage needs to stop swanning about in the media circus and get serious again. Unless anyone has a better suggestion for who should lead the charge?

    If I had all their phone numbers I’d set up a conference call and then say:
    “Here’s who’s on this call (list). We have to have a plan in place by the end of it.
    Over to you, I’m only going to interrupt when necessary to remind you we have to have a plan in place by the end of this conference call.”

  19. Eilert says:

    tallbloke – Be hopeful.

    Brexit will come sooner than you think.
    Watch the events both in the US and UK in the next few weeks.

  20. tallbloke says:

    I love exciting predictions. Especially when backed up by reason and argument. 😉

  21. thebedsittersbible says:

    And at just the moment when automation is likely to reduce the need for unskilled labour – a perfect storm! https://wp.me/p8ZBIH-81

  22. p.g.sharrow says:

    Roger’ you need a person that is outside of the partisan politic groupings that everyone will talk to. Someone that will work behind the scenes to convince the premadonnas to follow the same script and organize getting the real work done. Someone with enough experience to realize what needs to be done and be recognized by the “Actors” that think they are leaders of their various factions. I would suggest you look in the mirror for that fellow.
    Working behind the scenes doesn’t do much for your ego, but if winning is important to you, it will work. I have done it. You don’t need to be the “leader” to get others to follow your lead. You need argument and example, Convince them of the direction they need to lead toward and help organize their backfields to work together and smooth over factional conflict…pg

  23. tallbloke says:

    PG believe me, I’ve been trying. There are lots of sneaky tactics in play to undermine and divide the Brexit camp. We’re up against a lot of powerful interests with plenty of resources.

  24. Zeke says:

    “Second, the UK must be in a position to encourage pro-competitive behaviour across the globe. Highly developed agreements like the Trans-Pacific Partnership (TPP) represent the blueprint for trade discussions in new areas involving services that rely on the cross border supply of data.”

    “In addition to being unable to discuss new services involving data flow in CETA it could not discuss them in the Trade in Services Agreement in the WTO either. A plurilateral agreement that like-minded countries agreed in order to improve trade in services around the world.”

    Those are bulk trade deals, made in secret, that are harmful to national sovereignty and favor large contracts from foreign providers. The reason it harms national sovereignty is that TTP allows any large company to sue the government for perceived losses, disregard national legislation and standards, and use a distant foreign court for arbitration, among other things.

    This speech indicates that Rees-Mogg has peculiar hobby horses and is not talking about competition and free market in the sense that most people understand it. Globalists think that aggregate global economic activity is the same as boosts in national productivity.

  25. A huge part of the problem are the ‘Sir Humphreys’ in the various ministries. They are bone idle as well as incapable. Remember they have not done stroke of work for at least 30 years – being spoon fed legislation from Brussels.
    Aaron Brown of Fishing for Leave spent time last week at DEFRA (Gove) with these ‘Sir Humphreys’ trying to explain why we should abandon the CFP and go for ‘days at sea’ for our fleet. Hardly difficult to understand or difficult to draw up efficient legislation (particular as Fishing for Leave has a fine document which does just that). Their response? “We can’t do it because it would involve hard work.”

  26. Drop James Dyson a line, very brexit chap, would have the ability to contact those on the list and he is a very organised individual.

    Farage has the public face and presence to front it but he needs to be organised by an “Alastair Campbell” type of person who ran the “Grid system” which kept Labour in power for so long.

    The Tories are becoming and embarrassment now.

  27. Adam Gallon says:

    Dream team? How about having a plan. There was a good one, still the best one. Ignored by virtually all. Leave went into the referendum with nothing to offer in the way of a route map. Once we were out, what would we be doing?

  28. Paul Vaughan says:

    “If the UK can achieve the independence necessary it can become a rule-setter in the world. It can export with its trading partners ideas about how best to create a governance structure that will spur innovation and enterprise. Its future can be true to its history.”

    Red tape is the problem, not the solution.
    The west may not find a way. The east will.

  29. Paul Vaughan says:

    Nature paces principled artistic division — e.g. impressionist timeline:

    Light foreshadows sound.

    An artistic “bridge to the west” frees captives from the darkness of “victory”:

    Flash before thunder.

    K-strategy luminaries buy r-strategy stabilizers to handle nature’s sharpest corners.
    Necessity of natural course mothers invention.

  30. beththeserf says:

    ‘Western civilization,’ says Kenneth Clark, ‘we got by
    by the skin of our teeth.’

    Can we do it again? Recover that Enlightenment creative
    energy and humanism and escape the nanny (supra) state
    and its dumbing down bureaucracy.

  31. tallbloke says:

    Even then Clarke saw Charlemagne and his crowning by Rome as the proto pan european ideal.

  32. tallbloke says:

    Trump is leading the way.