Friday , July 12 2024

Theresa May’s Mansion House Speech on EU Negotiations

Theresa May’s Mansion House Speech contained some promising items but also reflected the ideological roots of May and Hammond.

Particularly promising was that she would re-negotiate the EU Commission’s first draft of the agreement reached in December (presumably with regard to NI) and  “We are close to agreement on the terms of an implementation period which was a key element of December’s deal.”

Also promising was that she said: “We are leaving the single market.” and that we would not want to remain in the Customs Union (See Note 1).  The UK would also only need to take account of ECJ judgements where they affect the body of EU law that has been absorbed into UK law and a couple of minor other cases (See Note 2).

Her approach to the various standards bodies was also sensible – “the UK could remain part of EU agencies such as those that are critical for the chemicals, medicines and aerospace industries: the European Medicines Agency, the European Chemicals Agency, and the European Aviation Safety Agency.”  If this is not possible then the UK can easily set up its own bodies and negotiate Mutual Recognition Agreements for standards (the USA, Australia etc already have MRAs with the EU).

When it came to Trade Deals she ventured into Tory Free Trade ideology.  The Free Traders in the Tory Party seem to have little sympathy for their fellow citizens because they do not stress the Balance of Trade.  If the UK has a large trade deficit with the EU its money goes into the EU to develop its industry and staff.  Furthermore any surpluses achieved in UK trade with yet other trading partners are fed into the economy of the EU and so do not directly benefit the people of the UK.

The UK has a huge Trade Deficit with the EU that is costing us 4% of GDP.  The Trade deficit with the EU is exacerbated by the use of Euros for internal transactions by Eurozone companies operating in the UK. This prevents the natural rise and fall of sterling in response to the UK Trade Surplus or Deficit. These factors are a recipe for regionalising the UK economy.

The first priority for the Treasury and UK political parties must be to bring UK-EU Trade back into balance – it is currently in deficit by £80 billion a year, a vast amount, comparable in cost to the bank bailouts every year.  The UK Trade Deficit is one of the major causes of the current Austerity, Austerity is not wholly due to the banking crisis of a decade ago.

The wholesale ownership of UK industry by Eurozone companies is also removing many of the best jobs from the UK and proliferating low paid work and static wages.

Does May address these central problems that required Brexit?

In fact May defends the status quo. She believes that a “Canada deal”  “would mean customs and regulatory checks at the border that would damage the integrated supply chains that our industries depend on and be inconsistent with the commitments that both we and theEU have made in respect of Northern Ireland.”

In other words she believes that integrated supply chains, pipelining Eurozone imports into the UK, should be preserved.  However, in total contradiction to this statement she says that the UK could have a “highly streamlined customs arrangement, where we would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.”  Such an arrangement could, of course, be used for a Canada style of deal.

On support for industry Tory ideology again rears its head. Ever since the Ancient Egyptian government maintained stockpiles to protect the population from the boom and bust of Nile flooding governments have had a central role in preventing disasters due to cyclical events.  At present the UK government needs to support the financing of UK companies by the banks but this is problematical in the EU.  However May seems to rule this out: “trying to beat other countries’ industries by unfairly subsidising one’s own is a serious mistake.”  May does not seem to understand the need for government to avert cyclical problems in industry.  She is also naive about the possibility of economic warfare against the UK economy by the Eurozone and the need to have defences in reserve against this eventuality.

May’s attitude to UK fisheries is puzzling. She says “on fisheries, the Commission has been clear that no precedents exist for the sort of access it wants from the UK.” but makes no asserion that it is immoral to exchange the livelihoods of UK fishing communities for gains that benefit the whole country.  If the whole country benefits then the whole country should pay, not the fishing communities of the UK.

Overall May’s speech was a good political move, technically good in parts but also blind to the appalling UK-EU Trade Relations that are so damaging our economy with austerity and stalled wage growth.

Note 1:  On customs:

“Option one is a customs partnership between the UK and the EU. At the border, the UK would mirror the EU’s requirements for imports from the rest of the world, applying the same tariffs and the same rules of origin as the EU for those goods arriving in the UK and intended for the EU. ”

“Option two would be a highly streamlined customs arrangement, where we would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.”

Note 2: On the ECJ:

“For a start, the ECJ determines whether agreements the EU has struck are legal under the EU’s own law – as the US found when the ECJ declared the Safe Harbor Framework for data sharing invalid.

When we leave the EU, the Withdrawal Bill will bring EU law into UK law. That means cases will be determined in our courts. But, where appropriate, our courts will continue to look at the ECJ’s judgments,
as they do for the appropriate jurisprudence of other countries’ courts.

And if, as part of our future partnership, Parliament passes an identical law to an EU law, it may make sense for our courts to look at the appropriate ECJ judgments so that we both interpret those laws consistently.

As I said in Munich, if we agree that the UK should continue to participate in an EU agency the UK would have to respect the remit of the ECJ in that regard.”

This post was originally published by the author on his personal blog:

About John Sydenham

Dr John Sydenham has worked in International Pharmaceuticals and for one of the "big four" International Consultancies. He ran a successful company for 15 years and after selling the company devotes his time to travel, science, black labradors and freedom.

Check Also

The War on the Moon

There was a time when the HG Wells story ‘War of the Worlds’, made into …


  1. thank you it really worked

  2. baxterross

    Thank you for the updates