Full text: Jacob Rees-Mogg’s speech at the
Leave Means Leave event, ‘Brexit – One Year To Go’
Jacob-Rees Mogg MP, Chairman of the European
Research Group, speaking at Leave Means Leave event in Central
London on Tuesday, March 27, 2018
Thank you for that generous introduction
Richard, it is a particular pleasure to be here with Leave Means
Leave and I am grateful to you for coming today.
We are a year and two days from the witching
hour, that moment when we will leave the European Union, at
least legally, and will be fulfilling to some extent the promise
to take back control. And that is what I am looking forward to
discussing: how we do that, what comes next and how we got
here.
I know that I am sometimes teased for being
the ‘Honourable Member for the 18th Century’, but it is a badge
I wear with pride because it was in the 18th Century that the
seeds of our greatness, sown long before in our distinguished
history, sown conceivably by Alfred the Great, began to grow and
to flourish in a way that led to our extended period of good
fortune and greatness. But in spite of this admiration and,
indeed, love for our Nation’s history, today I want to be, and
this may be an effort for me, the Honourable Member for the 21st
Century – a century that will see our country regain its
independence and stride out once more, into a new age of global
trade and cooperation. It has taken us some time to rediscover
the opportunities of a truly global Britain and a few cave
dwellers still want to stop the process, but with 367 days to go
the United Kingdom will be free.
I want to reflect on where we came from, but
more importantly to look forward to the world of opportunity
that awaits a freshly unbound United Kingdom, as we carry out
the democratic will of our electorate. I want to consider how
we got to this historic moment where 17.4 million people voted
to leave the EU, what leaving the European Union’s restrictive
supranational structures means for our Nation, and how we seize
a real Brexit: one that is not shy or delivered begrudgingly,
but one that seizes the economic and psychological benefits of
departing from the fortress that is Europe.
How we came to join the European Union is an
important part of understanding our Island story. We won the
war and were full of optimism about our place in the World, but
then came Suez. Suez was a time of realisation and acceptance
that we were not the powerful nation that we had been before.
That we were dependent upon the United States for our economic
survival and that we could not carry out global plans because of
fundamental weaknesses, which had been hidden by the success we
had enjoyed with our allies in the Second World War, but were
nonetheless there. And once that happened the Nation’s view of
itself changed and the Establishment, the Elite, decided that
its job was to manage decline, that the best they could do was
to soften the blow of descending downwards, soften the effect on
the Nation of being less successful than it had been in the
past, and recognise that we would not be able to keep up with
other countries.
This led to the notion that it was Europe or
bust and it was so profound that when Harold Macmillan’s quest
to join the Common Market in 1963 was vetoed by a nonchalant
Gallic ‘non’ from General de Gaulle, who could have thought that
the French would behave in such a way, the normally phlegmatic
Macmillan wrote in his diary, ‘all our policies at home and
abroad are in ruins’.
That is the true spirit of the post-Suez
world and it was a spirit that infected the next Conservative
Prime Minister but one, Edward Heath, who succeeded where
Macmillan had failed and celebrated our entry into the European
Economic Community in 1973, calling on the UK to fulfil our
European destiny and take part in building a new and greater
Europe. It is worth noting that he also said that it was
unjustified and exaggerated to say that in going into Europe we
shall in some way sacrifice independence and sovereignty – a
judgement and political spin that has not stood the test of
time. But in fact many people knew, even then, that it was not
accurate. Once the European Communities Act was passed and EU
law came in as supreme, Lord Denning, the highly eloquent Master
of the Rolls, one of the most eminent Judges of the 20th
Century, said it was like an incoming tide that flows into the
estuaries and up the rivers and cannot be held back.
Nonetheless, there was hope that joining the
Common Market would revive the economy which, as we were
managing decline, we could not manage for ourselves. Britain
was seen as the sick man of Europe, with our annual growth in
GDP per head terms lagging behind that of France, Italy, even
Ireland in the period of 1950-1973. We ran at 2.4%, Ireland at
just over 3%, France at just over 4% and Italy, amazingly
considering its more recent record, at just under 5%. And in
our early years of membership, the economy did start to grow.
Indeed, the per capita growth of the UK Economy from 1973 – 1995
was ahead of every major European economy, other than France and
over the period of 1995 – 2007, though bear in mind that that is
a period that encompasses the creation of the Euro, GDP per
capita growth eclipsed every major economy in the EU, including
France and Germany.
However, before you think I have been
brainwashed by the Europhiles it is important to gauge this
relative economic success with some caution. First it takes no
account of Lady Thatcher’s domestic revolution in the 1980s,
which transformed the British Economy, making it into a world
beater rather than a world loser. I do not think anybody dared
to suggest to Lady Thatcher that she was in the business of
managing decline. Second, as eminent academics, including
Professor Graham Gudgin from the Centre for Business Research at
the University of Cambridge, have said, further analysis does
not support the frequently repeated claim that membership of the
EEC/EU has been good for economic growth in the UK. This is
because growth in UK per capita GDP has been slower since the UK
joined the EEC/EU than it was in previous decades: so averages
from 1950-1973 of 2.4%, 1973-1995 of 1.76%, 1995-2007 of 2.55%,
2007-2014 of 0%.
The fact that the UK’s growth appeared to
improve relative to the major EU economies was wholly caused by
the dramatic slowdown of growth in these EU economies. So it
was not just about managing our decline, it was part of managing
the decline of the whole of the European Union by putting a
fortress around it – hence our experience as a Member State is
that we did relatively better compared with a part of the world
that was itself practically mummified.
Now if we have come to the conclusion that
the economic benefits were not that great, it is worth looking
at some of the other effects of belonging to the European
Union. In the past few days there has been a great furore over
fishing rights and we know well the effect on fishing
communities that came from joining the European Union, as our
waters were declared a common resource in a disgraceful stitch
up organised just before we joined. But other effects have
taken place too, particularly affecting, harming the least well
off in our Society. So when it comes to the unlimited flow of
unskilled labour from the EU, analysis that has been undertaken
is absolutely clear. Those on low wages pay little tax and are
most likely net recipients from HMRC via tax credits, which they
often send back to their country of origin, and they receive
many benefits in kind that are of a higher level than those
available in their home country so there is a major subsidy in
encouraging people to come to compete with our indigenous
communities.
This is quantifiable in several different
ways – specifically on welfare. Recent estimates have found that
EU migrants are claiming £4 billion a year in benefits,
newcomers in work claim more than £2 billion, whilst those out
of work claim around £1.1 billion in tax credits and other
benefits. A further £740 million in child benefits was also
claimed. This becomes, through the tax credits system,
effectively a 20% wage subsidy, so each unskilled EU immigrant
costs the taxpayer around £3,500 a year. And this has had an
effect, of course, on the poorest in our society, who have found
that their jobs have been taken by migrants from the EU. It
would be wrong to criticise these migrants, who are individually
extremely admirable people and we should never forget that,
particularly those of us who are Conservative. To move half way
across a continent to a country where you do not speak the
language, to work hard to provide for yourself and a better
standard of living for your family is a really noble thing to
do, and we should not forget the individuals in this story. But
the effect has been to lower wages for the least well off in our
own Society.
So the Economy has not really grown,
communities have been hit and the least well off in the Country
have been harmed by the free flow of labour.
Now we need to look at what the Referendum
meant. What were people doing when they voted to leave, because
there has been much talk about that? Some of the great
panjandrums of our time have told us that we were all very
stupid and that we did not know what we were doing and that we
did not realise that we were voting to leave the Customs Union
and the Single market, and that it was all done by uneducated
people who ought to have listened to their betters. In truth,
the vote was by people who believed in democracy. They
recognised that the system that they were used to, where sending
a Member of Parliament to Westminster, who would determine their
laws and seek redress of grievance, was under threat because
once it was EU Law it was impossible. They voted to take back
control and, yes, they had specific concerns and some of these
were over immigration and some of them were over agriculture and
some over fishing and some over regulation but the fundamental
underlying point was about democracy and can you change your
Government? But they also saw that other countries, whether it
be large ones such as America, Canada, India and Australia or
smaller countries such as Singapore, governed themselves without
recourse to a bureaucracy that provided their new laws, a
foreign court or regulations imposed by people they had never
met or often never heard of. Many felt they had nothing to lose
by turning their backs on Brussels. The dire warnings of Project
Fear amplified by self-righteous groups very often funded, like
the CBI, by the EU itself fell on deaf ears in many parts of the
Country, especially the less well-off ones, because they never
felt that these organisations cared about them in the first
place.
Yet, in spite of the clarity of the result –
52% to 48%, there are still many people who do not accept it as
final. You can see this with the debates going in the House of
Lords; you see this with leaked comments from a civil servant
saying that it was going to be a KitKat departure. A pretty
second rate analogy but nonetheless indicative of an
establishment view that we should not really leave. We have
seen it with two recent Select Committee reports – the Exiting
the European Union Select Committee, on which I serve and where
I was part of a minority report that rejects the conclusion that
we should extend Article 50 and that we should increase the
transition period; and the Home Affairs Select Committee saying
also that we could not sort out Home Affairs in time. What this
is about is softening people up to extend the transition, delay,
frustrate and potentially deny. It is noticeable that on my own
committee every single MP who voted for the report had voted for
remain in the Referendum. It seemed to me quite clear that they
were voting to reverse the result of the Referendum and that
that was implicit in the report’s recommendations.
What would that mean for this Nation? If we
were not to leave, if we were to find a transition bound us back
in? Well it would be Suez all over again. It would be the most
almighty smash to the national psyche that could be imagined.
It would be an admission of abject failure, a view of our
politicians, of our leaders, of our Establishment that we were
not fit, that we were too craven, that we were too weak to be
able to govern ourselves and that therefore we had to go
crawling back to the mighty bastion of power that is Brussels.
Suez affected the Nation’s view of itself until Margaret
Thatcher became Prime Minister. It infused throughout the body
politic the view that the best we could do was to manage
decline. Margaret Thatcher tried to break away from that, but
it was such a strong feeling that once she had gone it seeped
back again. It is still there and the Remainers are part of
that group, who do not feel that we are able to do things for
ourselves. Although countries across the Globe can govern
themselves, poor little Blighty cannot. Poor little Blighty must
shelter itself from the winds of global competition by hiding
behind the protective, albeit crumbling, walls of Fortress
Europe. We would be saying, if we reversed this decision,
particularly if we did so by subterfuge, by prestidigitation, by
legerdemain, – we would be saying that once again not only can
we not govern ourselves but we are so frightened of our
electorate that we dare not tell them that that is what we
believe. As with the disaster of Suez it would end up being a
national humiliation based on lies.
So this is where we have got to: Brave
British people have said we can do it for ourselves and some
managers of decline still deny it.
This means we need to reiterate the arguments
around why we ought to be leaving and what the benefits are.
Well part of this case is made for us by the European Union
because of the way that it behaves in the negotiations. Anyone
who had any doubts about the niceness, the kindliness, the
friendliness of the European Union need only look at its
approach, its bullying approach, to us in the negotiations: have
they entered into the negotiations in the spirit of wishing
everyone good will? No, not at all. They have entered it in
the spirit of they know best and we must do as we are told. No
wonder two thirds of British people in an opinion poll say the
EU’s behaviour is bullying.
According to the EU, despite the fact that we
have provided the defence of Europe, along with the Americans,
since the Second World War, have far and away the best
intelligence agencies, and have been responsible for being the
main safeguarders of the Continent’s security, we apparently
suffer from the problem, problem no less, of listening
exclusively to our National opinion, something which we like to
call in this country ‘democracy’, and we have been told that the
time will come when Britain regrets Brexit.
We ought to leave in a way that is absolutely
clear, and here I am in complete agreement with the Prime
Minister, Theresa May. She has been explicit that Brexit means
Brexit and has reiterated this at Lancaster House, Florence, and
the Mansion House: we voted to leave the Single Market, to take
control over our borders, for our immigration, and those matters
must be decided in our own Parliament.
We have voted to leave the Customs Union, to
gain control over our trade policy for the first time in decades
and to allow the UK to pursue trade deals with the markets from
where the majority of global growth will come in the next few
years, predicted to be 90% in ensuing decades. This will do
more to lower prices on everyday items to consumers by reducing
the Common External Tariff which artificially raises prices. We
have voted to leave the jurisdiction of the European Court,
which will no longer have control over our laws and make sure
that the United Kingdom Parliament and Supreme Court are the
arbiters of our laws and justice. We voted to stop sending £10
billion net a year to the European Union and I think that money
should be used on the National Health Service.
In addition to this we have been consistently
clear that no deal is better than a bad deal and it is worth
reiterating this point, because there has been a lot of talk
about how we are not prepared. We have not built car parks at
Dover and we have not got new EU immigration lines at Heathrow.
Yet we are more prepared than the European Union for this very
simple reason – when we leave, if we were to have no deal, how
goods come into this Country will be a decision for us. We will
be able to say that goods from Europe, whose standards we are
quite happy with, because until the day before they were the
same standards as ours, can carry on coming in freely and that
we will carry on checking goods coming through Dover for illegal
drugs, for armaments and for people smugglers, but that we will
not check them for tariffs because we will not apply any
tariffs. That will be under our control.
It is worth asking what preparations has the
EU made for no deal because if the EU is faced with no deal it
is insolvent? The EU has no legal ability to borrow, it has to
raise its money it seeks to spend from the Member States. If it
does not have that money, it cannot spent it. What plans has
the EU made to cut expenditure in Romania, in Poland, in the
Czech Republic? Or what plans has it made to ask the Dutch and
the Germans and the French for more money to fund those
projects? The answer is none. Its commitments are still there
but it would not have the funding to pay for them. Oh, and it
will be a quarter of the way through a financial year anyway so
it would be a sudden hit for the EU if we left without a deal,
without paying any money.
So we have great strength in this position,
no deal is better than a bad deal for us, but it is a disaster
for our Continental friends. And that is before you get onto
the issue of tariffs, though personally I think it would be
idiotic to put tariffs on European goods, which would merely
hurt UK consumers.
So, our red lines can remain, we must ensure
that we do not give in to the naysayers. But we must then look
to the broad sunlit uplands of Brexit. What is it that will
really give us the benefits of having left? And this falls, to
my mind, into a number of categories.
The first advantage is economic and I set
much of this out in the talk I gave alongside Economists for
Free Trade, with particularly Professor Patrick Minford, that a
real Brexit can offer our Government a post-Brexit dividend of
£135 billion between 2020 and 2025 and a further £40 billion per
annum from 2025 onwards. These benefits will only be realised
by a combination of global free trade for Britain outside the
Single Market and the Customs Union plus opening up the UK
Economy to the positive effects of entrepreneurial dynamism.
That Europe is near the bottom of the class when it comes to the
number of business start-ups tells you all you need to know
about its attitudes to enterprise. The most obvious benefit
from Brexit for families will be our ability to leave the EU’s
protectionist prison of a Customs Union, which puts up barriers
to Global Trade and keeps prices of non-EU products at an
artificially high level. Since on average 21% of people’s
income is spent on food, clothing and footwear the prices of
these three commodities are vitally important to the families of
people across the Country. Let us not forget that this
percentage, this 21%, will be even higher for the least well
off. The Customs Union though has no mercy for the least well
off, with these three items being the highest tariffed sectors
in the Customs Union. 26% on food, 11.8% on clothing and 11.4%
on footwear on average, and, in addition, food is obstructed by
many non-tariffed barriers to make it almost impossible to
import.
As it is expected that 90% of global growth
is going to come from outside the EU in coming decades, this
talk is not just theoretical, it makes economic sense to be
opening up to nations that are growing and who will want to
trade with us. It will also boost the living standards of the
least well off when we leave the Single Market and gain control
over our borders.
The 20% wage subsidy that is provided to
unskilled EU migrants from tax payers costs approximately £3500
per worker. This is something that hits the least well off
most. Getting the level of unskilled EU migration under
control, and that means reducing it, could help see the living
standards of the least well off rise by 15% when we leave the
constraints of the Single Market. We need to ensure that we are
focused on those who need our help most and that is why we can
have a very open regime to high skilled labour which does not
present the same economic problems as low-skilled.
More intriguingly there is the economic
advantage from the ending of the ‘colonial effect’. The
Economist Intelligence Unit produces long-term forecasts for
developed and developing economies in its Country Forecast
reports. Its model looks at the main determinants of long-term
growth, including quality of institutions, demography, human
capital, trade, regulatory environment and so on. Interestingly,
the model includes a variable on independent statehood. The
colonial effect depresses annual long-term growth in GDP per
head by about one percentage point. As Laza Kekic, who
developed the model, has written, the ‘colonial effect’ in the
model is strong and extraordinarily robust in all
specifications. Moreover, it is persistent over time, even after
the end of colonial rule.
Although EU membership is, of course, not
literally the same as being a colony, the factor does capture
the importance of self-rule, or ‘taking back control’. The
long-term growth model suggests a maximum positive impact from
these two [the other being the shake up effect] growth sources
of some 1.2 percentage points per year. But applying just half
of this potential would increase annual average growth by 2050
to 2.8%, or 2.4% in per capita terms—a similar rate achieved by
the UK economy during the 1950-73 and 1995 and 2007.
While economics is important it is not
everything and there are other advantages to leaving the
European Union, sometimes ones which are less easy to measure.
The restoration of our constitution may seem
esoteric but it is of considerable importance.
It is not necessary to accept the Whig
interpretation of history to see the advantages of our
constitutional settlement and the benefits it has brought to us
as a nation as it evolved. A democracy underpinned by the common
law and the rights that come with that, responsive to the needs
of the electorate and of changing times, flexible enough to
alter when necessary but robust enough to stand up to the
vicissitudes of political change.
The British constitution is an object of
great beauty. It is entirely democratic, but has built in
protections against raw populism. The power of Parliament to
make laws is theoretically unlimited, but in fact is constrained
both by the requirements of election and by the independence of
the judiciary. It has the ability to act quickly in changing
circumstances and respond to the demands of the electorate, but
the process of legislation and the bicameral nature of the
legislature mean that only the most ruthless prime minister with
the largest majority can force through fundamental changes and
such a person is likely to have widespread support for what is
being done anyway.
It also has, through the constituency member
of Parliament, a powerful link to individual voters, who may
still seek the historic rights of ‘redress of grievance’ from
their Member of Parliament. This is carried out weekly up and
down the country as MPs hold constituency advice bureaux where
they undertake to act as the champion for their constituents.
The common law fits in with this, as it is a
human system based on precedent and historic understanding, and
can only be changed by specific statute, this provides both
continuity and flexibility. It avoids arbitrary or bureaucratic
rule.
The European Union is based on a different
approach to government and a separate understanding of how the
state ought to work. This is not necessarily better or worse but
it has always been hard to graft one on to the other.
Restoring our constitutional order should
lead to better government. Politicians will no longer be able to
evade the blame if things go wrong by saying it was decided
elsewhere; they will have to take responsibility for their
actions. Equally, it will not be possible to pretend that if it
was not for a remote bureaucracy we would not make mistakes.
Power and responsibility go hand-in-hand and will be reconnected
once we have left the European Union.
Leaving will also restore our global
standing. Partly this is technical. We will once again take up
our own seats on international bodies where we have delegated
our activities to the EU. In the World Trade Organisation,
instead of being one 27th of a representative, we will have our
own place. This will inevitably give us more influence because
we will be there arguing our corner rather than leaving it to an
EU representative to have to stand up for us.
Removing ourselves from the requirements of
“sincere cooperation” will also restore our global standing.
This legal requirement of the EU has meant that even where we
have maintained our own individual representation, we are bound
to put our interests beneath the collective requirements of the
EU. This will end once we leave and will allow us to be more
forthright in defending our own interests and pursuing our own
policy.
This does not mean that we will not want to
cooperate with our neighbours, but we will be able to do so from
a position of strength and independence. It is striking that the
Prime Minister’s robust response to Russia has occurred as we
are leaving the European Union. Even the prospect of freedom has
made us bolder and more forthright in the defence of our
national interest. At the same time, our allies rallied to our
cause because they respect strength rather than weakness.
With one year to go before the technical date
of departure, this is the challenge to the decreasing number of
Remainers who model themselves on Mr Hiroo Onoda, the Japanese
soldier who finally surrendered in 1974 having previously
refused to believe that the Second World War had ended.
There is a world of opportunity ahead of us.
Economically, leaving the European Union by getting rid of
unfair, anti-competitive tariffs and by controlling our borders
will help the least well off in society the most.
Constitutionally, we will be in charge of our own destiny
protected by our own laws and with no more excuses for our
politicians. In international affairs, we will be setting our
own direction not hiding behind the skirts of the German
Chancellor.
If we do not believe that we can do better by
our own efforts, our own endeavours and our own choices, then we
have become the managers of decline. Suez was forced upon us
because of our precarious financial state after the war and the
dishonesty of those who pursued the policy. The national
humiliation was brought upon ourselves.
This time it would be worse. We would be
admitting as a nation that we simply did not cut the mustard, we
were not up to taking our place in the world, and we were so
fearful, fretful of the future, that we had to allow somebody
else to do it for us. It would be an unutterable failure of
political will by the Establishment when the British people have
shown the courage to take their destiny in their own hands.
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