The government’s “£800 billion in new global post-Brexit trade” claim debunked - and why it’s so important to lay it out as a falsehood When I started this Substack, I did worry a little that I might run out of things to say about Brexit. That the news about it would dry out and I’d get stuck. As it happens, this has never come close to being the case - there is in fact so much Brexit related material to talk about, the problem every week is what to put in and what to leave out. For instance, in this edition I could mention James Cleverly’s plan of finding any friends we can in a post-Brexit landscape, looking past human rights abuse along the way. I could review Richard Darch’s “Welcome to Brexit Island” photographs, demonstrating the light it shines of how little Brexit has done for people in poorer parts of Britain beyond a bit of chat and some broken election promises. I could talk about Jeremy Hunt’s proposed reforms to the way the City functions based on my prior work on EU regulation.
The thing that should really concern everyone, of course, is the Japan data. Why? Because it illustrates the significance of what is at stake in trade policy that certainly wasn't the case in 1823 where Tory MPs still seem to live. Specifically: nobody, aside from in a handful of low-value sectors (relative to total trade and investment flows) exports finished products anymore, and much of what they do trade is invisible (labour, data, design, services). Countries are embedded in complex production networks - in which products are created by dozens of intermediary processes taking place globally - and these proliferate wherever there is regulation governing them. The most important regulatory architecture, from our perspective, is the European Single Market. It was our membership of that which saw huge amounts of Japanese investment and trade, because the UK was a platform for inserting Japanese firms into continental European production networks (where data, people, capital, components move back and forth seamlessly). Why bother continuing to trade with or invest in Britain if that's no longer really possible?
The irony is that, because Tory MPs are so rooted in the 18th and 19th Centuries, they won't get this. They'll be puzzled about why a brilliant FTA with Japan isn't generating new trade, because they still believe that trade is about countries exporting their finished products between each other, when, in fact, the few things we do trade in that way are low-value (rice, whisky) when compared to the serious stuff of high-tech services. But then they'll cheer and have their dated prejudices reinforced when they see that UK-NZ trade has led to some increased lamb and butter imports which are a total drop in the ocean, yet very painful for our individual farmers, and a glaring indicator of an overall relative terms of trade loss due to investment in the sectors that really matter (or will matter in future) continuing to stagnate.
It is inconceivable that the Britain can continue to play the role of a platform into the EU now given that we are no longer party to single market regulation, and nor can we really establish our own production networks given that the scale of future technological development (e.g. in hydrogen, batteries etc.) can only really be achieved on a continental (i.e. EU, US, China) scale. If we're not plugged in, we're out, and for every tonne of lamb we export at greater cost into Europe, we will be suffering a gradual, but continued, relative decline in competitiveness and terms of trade of the sort that plagued Latin America in the 1970s.
Brexit is a religion, Nick, you need to have faith. Otherwise you become a doubter and any hope of redemption, as in your case, is gone. You have got to believe!
I'm in my 70's now Nick and I have some experience of religion. While folk can believe whatever they want and deal with the consequences the downside is that non-believers are brutally exposed to the reality that such beliefs inflict on others. Brexit and sovereignty are a classic example as freedom exists, meaning we do what we want when we want and 800bn of trade is but a side benefit.
Back to religion and to a story that has haunted me for years. A person I grew up with told me that he was regularly abused by a priest up to the age of 16 but he always felt god would come to his rescue, alas not so! (He took his own life in his 40's)
Brexit is a different kind of abuse but it is abuse of millions of innocent citizens of the United Kingdom and the perpetrators are living in their beautiful fantasy.
I had a spell reading the Telegraph a few years back and looking at reader's comments. It was very clear that they thought that trade would be seriously boosted by having the QE2 sail around the world, stopping at ports to enable businessmen to come on boards hobnob with minor officials and maybe a sniff of a minor royal nearby.
Is it any wonder that the UK is failing. Sunak abolished the last fig leaf of an industrial strategy and the double tax relief on R&D to save like fourpence a year and further salt the earth for the next incoming government. They also cut our already inadequate training budget for new doctors.
The tories used to consider themselves the party of business. They have dropped that ball long ago for a "feck business" message and leaving the EU. Or trying to tell the chemicals industry that deregulation and dropping EU standards is somehow beneficial to them or the country or someone, when the proposed UK standards body will cost the industry a completely unnecessary one thousand million pounds ,as well as cutting exports and ending various products.
The tories believe in deregulation as religious good. They believe it even when business is screaming at them not to do it, explaining the consequences. I believe Tories got into buying water shares with great enthusiasm, in the knowledge that it would be looked after as a private monopoly with a weak regulator, a Director General unwilling or intimidated against the use of their real powers by fining companies bigger than they could comfortably cover within their marketing budgets. Water companies have all decided not to invest significantly. None have built new reservoirs but they have sold some. They fail on all leakage targets and allow the winter floods to vanish while banning hosepipes at the second hint of warmth arriving.
Leaving the EU was a boon for the water companies. Already they are allowing their facilities paid for by taxpayers to crumble and be overwhelmed by a growing population, all paying their fees which have grown faster per household than inflation. As if that was not enough, while Thatcher wrote off their debts they have written new ones,. not to invest, but incredibly, to pay themselves higher dividends. These dividends amount to an incredible £72 billion since the sell off. Now since leaving the EU the pollution emissions have gone through the roof. Yet we are told by these nerdowells that the user will have to pay again higher for the investment that Thatcher and her liars promised privatisation would bring.
There is no way on earth the terms of the water licences are remotely being met and now the government cannot be fined by Brussels, as Thatcher was repeatedly until she improved water and air quality. Britain was nicknamed "the Dirty man of Europe". But things are so much worse now.
Deregulated and unsubsidised farming is an even bigger and more dangerous polluter. Farms are now having industrial chemical sludge with forever chemicals mixed with human waste and spread on the fields. It used to be buried in special lined containment. What do they think this will do to the tourist industry, watersports or sport fishing, never mind soil viability to feed the population? The answer is they don't think, except how they or their mates and donors can make more money. Property is one of their two biggest donors and the Tories just allowed them to pollute sensitive environments without alleviation or studies previously required.
Polls suggest the Tories are down to about 21% support. One wonders who these people are and just what they would have to do to lose most of that? It's pretty much the percentage that would be just fine under brutal authoritarian fascism. Roll on polling day, which I expect will as late as they dare and since they won't want the poll around Christmas, it will be left into the autumn. Then hopefully the investigations will start, followed by prosecutions.
The thing that should really concern everyone, of course, is the Japan data. Why? Because it illustrates the significance of what is at stake in trade policy that certainly wasn't the case in 1823 where Tory MPs still seem to live. Specifically: nobody, aside from in a handful of low-value sectors (relative to total trade and investment flows) exports finished products anymore, and much of what they do trade is invisible (labour, data, design, services). Countries are embedded in complex production networks - in which products are created by dozens of intermediary processes taking place globally - and these proliferate wherever there is regulation governing them. The most important regulatory architecture, from our perspective, is the European Single Market. It was our membership of that which saw huge amounts of Japanese investment and trade, because the UK was a platform for inserting Japanese firms into continental European production networks (where data, people, capital, components move back and forth seamlessly). Why bother continuing to trade with or invest in Britain if that's no longer really possible?
The irony is that, because Tory MPs are so rooted in the 18th and 19th Centuries, they won't get this. They'll be puzzled about why a brilliant FTA with Japan isn't generating new trade, because they still believe that trade is about countries exporting their finished products between each other, when, in fact, the few things we do trade in that way are low-value (rice, whisky) when compared to the serious stuff of high-tech services. But then they'll cheer and have their dated prejudices reinforced when they see that UK-NZ trade has led to some increased lamb and butter imports which are a total drop in the ocean, yet very painful for our individual farmers, and a glaring indicator of an overall relative terms of trade loss due to investment in the sectors that really matter (or will matter in future) continuing to stagnate.
It is inconceivable that the Britain can continue to play the role of a platform into the EU now given that we are no longer party to single market regulation, and nor can we really establish our own production networks given that the scale of future technological development (e.g. in hydrogen, batteries etc.) can only really be achieved on a continental (i.e. EU, US, China) scale. If we're not plugged in, we're out, and for every tonne of lamb we export at greater cost into Europe, we will be suffering a gradual, but continued, relative decline in competitiveness and terms of trade of the sort that plagued Latin America in the 1970s.
Brexit is a religion, Nick, you need to have faith. Otherwise you become a doubter and any hope of redemption, as in your case, is gone. You have got to believe!
I'm in my 70's now Nick and I have some experience of religion. While folk can believe whatever they want and deal with the consequences the downside is that non-believers are brutally exposed to the reality that such beliefs inflict on others. Brexit and sovereignty are a classic example as freedom exists, meaning we do what we want when we want and 800bn of trade is but a side benefit.
Back to religion and to a story that has haunted me for years. A person I grew up with told me that he was regularly abused by a priest up to the age of 16 but he always felt god would come to his rescue, alas not so! (He took his own life in his 40's)
Brexit is a different kind of abuse but it is abuse of millions of innocent citizens of the United Kingdom and the perpetrators are living in their beautiful fantasy.
Keep up the good work Nick and thanks.
Given that the increase in EU trade was so tiny it should be put into relation with the loss in trade with Japan.
The government's claim will be off by more than just a factor of 800, outrageous as that already is.
I had a spell reading the Telegraph a few years back and looking at reader's comments. It was very clear that they thought that trade would be seriously boosted by having the QE2 sail around the world, stopping at ports to enable businessmen to come on boards hobnob with minor officials and maybe a sniff of a minor royal nearby.
Is it any wonder that the UK is failing. Sunak abolished the last fig leaf of an industrial strategy and the double tax relief on R&D to save like fourpence a year and further salt the earth for the next incoming government. They also cut our already inadequate training budget for new doctors.
The tories used to consider themselves the party of business. They have dropped that ball long ago for a "feck business" message and leaving the EU. Or trying to tell the chemicals industry that deregulation and dropping EU standards is somehow beneficial to them or the country or someone, when the proposed UK standards body will cost the industry a completely unnecessary one thousand million pounds ,as well as cutting exports and ending various products.
The tories believe in deregulation as religious good. They believe it even when business is screaming at them not to do it, explaining the consequences. I believe Tories got into buying water shares with great enthusiasm, in the knowledge that it would be looked after as a private monopoly with a weak regulator, a Director General unwilling or intimidated against the use of their real powers by fining companies bigger than they could comfortably cover within their marketing budgets. Water companies have all decided not to invest significantly. None have built new reservoirs but they have sold some. They fail on all leakage targets and allow the winter floods to vanish while banning hosepipes at the second hint of warmth arriving.
Leaving the EU was a boon for the water companies. Already they are allowing their facilities paid for by taxpayers to crumble and be overwhelmed by a growing population, all paying their fees which have grown faster per household than inflation. As if that was not enough, while Thatcher wrote off their debts they have written new ones,. not to invest, but incredibly, to pay themselves higher dividends. These dividends amount to an incredible £72 billion since the sell off. Now since leaving the EU the pollution emissions have gone through the roof. Yet we are told by these nerdowells that the user will have to pay again higher for the investment that Thatcher and her liars promised privatisation would bring.
There is no way on earth the terms of the water licences are remotely being met and now the government cannot be fined by Brussels, as Thatcher was repeatedly until she improved water and air quality. Britain was nicknamed "the Dirty man of Europe". But things are so much worse now.
Deregulated and unsubsidised farming is an even bigger and more dangerous polluter. Farms are now having industrial chemical sludge with forever chemicals mixed with human waste and spread on the fields. It used to be buried in special lined containment. What do they think this will do to the tourist industry, watersports or sport fishing, never mind soil viability to feed the population? The answer is they don't think, except how they or their mates and donors can make more money. Property is one of their two biggest donors and the Tories just allowed them to pollute sensitive environments without alleviation or studies previously required.
Polls suggest the Tories are down to about 21% support. One wonders who these people are and just what they would have to do to lose most of that? It's pretty much the percentage that would be just fine under brutal authoritarian fascism. Roll on polling day, which I expect will as late as they dare and since they won't want the poll around Christmas, it will be left into the autumn. Then hopefully the investigations will start, followed by prosecutions.
God I wish this article was published in the Daily Telegraph and Daily Mail.