I set out below why last Friday I decided to resign from the Conservative Party and join the Brexit Party:
1. The Conservative Party is on course to fail to deliver Brexit by 31st October 2019, or indeed at a later date. By Brexit I mean leaving fully the two treaties which define EU membership, the Treaty of the EU (TEU) and the Treaty on the Functioning of the EU (TFEU), and not concluding any new treaties with the EU. Ipso facto leaving all of the EU’s institutions. In a nutshell, to carry out the instruction of the 23rd June 2016 referendum.
2. Brexit is the most important issue in British Politics since Winston Churchill replaced Neville Chamberlain in the aftermath of the failure of the Norwegian Campaign in May 1940. The Conservative’s Party failure to deliver Brexit will end the Party as a major electoral force in British Politics for decades or perhaps even permanently. The United Kingdom is about to experience what happened in Canada 26 years ago when Preston Manning’s Reform Party came from nowhere and destroyed the Progressive Conservatives. Nigel Farage is Britain’s Preston Manning and the Brexit Party is Britain’s Reform Party.
3. Under May the Conservative Party has approached Brexit as a negotiation to conclude a new treaty with the EU – colloquially referred to as a “deal”, and all of the Conservative Party leadership candidates, with the exception of Esther McVey, are committed to continuing this approach. If I hand in my notice to my employer, then at the end of my notice period my contract of employment has no effect and I have left my employer. But if on the last day of my notice period I conclude a new contract with my employer then I have not left all, I have simply changed my job function. In the same vein, because our membership of the EU is defined by adherence to treaties, if we conclude a new treaty with the EU we aren’t leaving the EU, we’re simply changing our membership terms, even if we no longer have the label “EU member”.
4. Conservative leadership candidates Rory Stewart and Matthew Hancock have publicly opposed leaving the EU without a deal i.e. a new treaty. This is precisely because conclusion of a new treaty will cement Britain into the EU, which is what Hancock and Stewart want. The argument of Hancock, Stewart, Hunt and others that a better deal can be obtained whilst opposing no-deal is an outrageous lie. By opposing no-deal they guarantee the EU will never renegotiate May’s awful deal: Either we accept May’s deal and the consequential vassalage or we don’t accept the deal and remain in the EU on current terms forever. The EU wins either way, and Hancock, Stewart, Hunt and all the others are fully aware of this. Opposition to no deal is weasel-speak for opposition to Brexit full stop. In plain English large swathes of the Parliamentary Conservative Party are totally opposed to Brexit. The genuine Brexiteers are a minority in the Conservative Parliamentary Party.
5. In my opinion Brexiteers everywhere, very much including myself, have massively underestimated the total commitment of the British Establishment to the cause of EU membership. Phillip Hammond, Amber Rudd, David Gauke etc understand that the failure to deliver Brexit will destroy the Conservative Party. But it is a sacrifice they are willing to make, as Hammond recently admitted when he refused to rule-out voting with the opposition on a confidence vote if the government were to pursue no-deal. When the electoral cataclysm comes for the Conservative Party I predict that Remain former MPs will be looked after: jobs in the EU Commission, non-executive directorships in large multinationals. Indeed some Conservative MPs may well be in discussion right now about jumping ship to the Liberal Democrats.
6. The EU has only ever had one priority: its own survival. The EU is terrified of British success once outside of the EU, because this would inevitably lead Denmark, Sweden, the Czech Republic, the Netherlands and even Italy to leave the EU, and thereby bring about the EU’s collapse. So right from the start the EU’s approach has been to stop Brexit outright or make the leaving terms injurious and humiliating for Britain, to deter the other member states from leaving. Indeed Michel Barnier, soon after his appointment as EU Brexit negotiator, said that his objective was to make the withdrawal agreement so onerous that we would decide to revert to EU membership on pre-Brexit terms.
7. In 2016 the EU might have been willing to consider a negotiating a Free Trade Agreement (FTA) with the UK, that would have come into force on Brexit day. But this would only have been possible with an assertive British government making it abundantly clear from the outset that Britain would not conclude any new treaties with the EU. Perhaps Boris Johnson could have pulled it off had he won in 2016. As it was Theresa May became PM instead, she capitulated and now nothing will convince the EU we are willing to leave without concluding a new treaty. Consequently they will not renegotiate May’s Withdrawal Agreement or consider an FTA.
8. Brexit can only be delivered by leaving without concluding a new treaty with the EU. Of course Brexit is entirely compatible with making agreements (not treaties) with the EU in the framework of existing worldwide treaties such as the World Trade Organization (WTO). The only leadership candidate to fully understand this is Esther McVey with odds of 33:1 of becoming leader. Perhaps Raab and Johnson have also some understanding of this.
9. Even if Esther McVey/Raab/Johnson were to become leader, the large Remain contingent in the Conservative Party would torpedo their premiership. Just look at the total breakdown in cabinet responsibility and the guerilla warfare waged by hardline Remain Conservative MPs against Brexit, in the last 6 months in the Commons.
10. What is most striking about the leadership candidates is that none of them have a plan and none of them seem remotely informed about how trade works, how the EU works, international standards, the British Constitution or how the WTO works.
(a) The biggest obstacle to any sort of Brexit is Parliament itself. None of the candidates have a plan to overcome this difficulty. Yet there is a way out of this. Ten years ago Stephen Harper was leading a minority Conservative government in Canada and was facing a no-confidence vote because of opposition to his budget. So he asked the Queen’s representative the Governor General to prorogue the Canadian Parliament for 6 weeks and used the time to agree the budget with his coalition partners. The only hope for the new Prime Minister is to follow Harper’s Canadian example and prorogue Parliament from day one till 1st of November 2019, and thereby deliver Brexit, without of course concluding any new treaty with the EU. And yet not one single candidate has ever mentioned Stephen Harper or proroguing Parliament.
(b) Goods trade between EU member states is not friction free and the EU internal market in goods is incomplete for the simple reason that VAT directive has not been fully implemented, and has no prospect of ever being implemented. All exports between EU countries must have Intra EU Export forms for VAT, because imports entering an EU country are subject to VAT in the receiving country for the full value of the import, regardless of whether the import comes from another EU country or a country outside the EU. So the whole concept of VAT breaks down at the borders between EU member states, generating paperwork. If the VAT directive were ever fully implemented then all the EU countries with trade deficits with the other EU states would see huge losses in VAT receipts, with Germany and the Netherlands seeing large gains (Britain would lose around £16 billion a year). So all the arguments amongst the candidates about “frictionless trade” are a total and utter irrelevance: there is no frictionless trade to start with.
(c) Articles 8 and 21 of TEU place binding obligations on the EU to reduce tariffs and barriers to trade in its trade with non-EU jurisdictions. The EU’s negotiating stance over Brexit has flagrantly flouted articles 8 and 21, and yet not a single candidate proposes to take the EU Commission to court over this.
(d) A big challenge facing Britain trading on WTO trade terms with the EU is not a shortage of money, rather how to route efficiently the extra £9 billion in customs receipts we will get to the exporting companies that will be facing new tariffs. WTO rules forbid direct export support even when the justification is tariffs. Instead the WTO allows sectorial support for R&D and sectorially favoured tax regimes. Not one single candidate has mentioned this.
(e) Another big challenge facing Britain on WTO trade with the EU is the 9.9% tariff on cars and automotive components. Actually our greatest vulnerability is that British cars typically use over 50% of EU components, which will suddenly jump in price. A farsighted candidate would be planning the construction of new factories in Britain to give secure and cheap component supplies to UK manufacturers. But not one single candidate has mentioned this. An immediate measure would be to set employers National Insurance contributions to zero for firms in the automotive sector so they would immediately see an improvement to their cost structure, to offset the new tariffs at least partially. Again, no mention of this by the candidates.
(f) Finally engineering and scientific standards are totally dominated by American standards administered by American organizations: The Food & Drug Administration (FDA), The Federal Aviation Administration (FAA), The American Society of Mechanical Engineers (ASME), The American Petroleum Institute (API)…The aviation, pharmaceutical and chemicals industries use American standards and design codes for practically everything. Our membership or not of the EU is totally irrelevant. Again, the candidates seem totally unaware of this.
Whilst I accept that the Brexiteer leadership candidates are well-meaning, they come across as disorganized, very ill-informed, naïve, and yes, lazy and arrogant. As for the Remain leadership candidates, they are as duplicitous as they are determined to stop Brexit.
The Conservative administration under the new leader will either descend into chaos if a Brexiteer is elected or lead to the overt cancellation of Brexit if a Remainer is elected.
One way or another there will be a general election this year where the Conservative Party will be wiped out regardless of who is leading it. The Brexit Party will replace the Conservative Party in Parliament. If the Brexit Party secures a majority then Brexit will happen, if it doesn’t then Brexit will be cancelled.