John Redwood: Spend the £39bn Brexit bill at home to boost UK economy

Posted On: 
10th December 2018

Rather than listening to scare stories, let’s focus on the money, the freedoms and the opportunities a no-deal Brexit can bring, says John Redwood

If the UK follows a wise economic policy after leaving, we can be better off out than in, writes John Redwood
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The prime minister has offered us a withdrawal agreement, not a deal. It looks likely that the Commons will vote this down. It is costly, one-sided, and offers no guarantees for our future partnership with the EU.

Why would the EU be more willing to offer preferential trade terms and other benefits once we have agreed to part with a large sum of money and accept its rules and laws for at least another 21 months, when it has previously not been prepared to do so?

If parliament passes no new Brexit legislation, we will leave the EU on 29 March 2019 with no withdrawal agreement, in accordance with the Article 50 letter we sent and the EU Withdrawal Act.

This means that, from 30 March next year, the UK will be an independent, self-governing democracy again. We will not owe any money to the EU, so we can spend all the money we save on our own priorities here at home.

The Lords committee on the legal position made this clear, and alternative pessimistic advice within the government is unlikely to have convincing arguments to pay the EU £39bn after we have left. The governing law must be the treaties which, under Article 50, make no provision for continuing payments. What’s more, much of the £39bn payment is for the extra period we effectively stay as members under the withdrawal agreement, which we will not be doing if we leave in March 2019.

Some claim that leaving without a withdrawal agreement will be a bad course of action. They invite us to believe planes will not fly the day after we leave, yet the continental airlines are busy selling tickets for April 2019.

They say we might run out of pharmaceuticals. I have been assured by the government there are no plans to delay the movement of drugs at our ports, and there have been no reported notifications from continental suppliers to the NHS that they intend to stop selling to us.

They say there could be big delays to food imports, to take account of new inspection procedures at the docks. Again, there is no immediate need to put in any such delaying checks. There are plenty of checks already in the system.

Others think France will mount some kind of economic blockade of the UK. This sounds like a slur on the French. The port of Calais has said it wants to keep UK business. It will be well aware that exporters could switch to Belgian and Dutch ports, and from ro-ro to container if necessary. It is difficult to know by what legal powers continental ports would delay traffic and why they would wish to do so.

Out of the EU, the UK will be free to set her own tariff schedule as a full member of the World Trade Organisation. I would want the government to set tariffs lower than the current EU external tariff we have to apply to all non-EU trade. It would be a good idea to take all tariffs off imported manufacturing components, for example, to lower the costs of making things in the UK. We could lower or remove tariffs on food we cannot grow for ourselves, and have lower average tariffs on temperate food.

The aim of economic policy should be to give the UK a boost from the money saved and the freedoms returned by Brexit. If we spent the £39bn here at home over a two-to three-year period, that would provide a 2% boost to our GDP, and would be most welcome in our public services.