Ross Clark

to compete with Australian and Chilean producers.

Overall, it is EU exporters who would have most to lose from the absence of a deal with Britain. In the second quarter of this year Britain ran a trade deficit with the rest of the EU of £8.9billion.

Leaving the EU without a deal would not be without its advantages. It would free Britain instantly from having to obey any lingering EU regulations which might otherwise be attached to the terms of a free trade deal.

As the Chancellor Philip Hammond said, Britain could choose to adopt a radically different economic system – becoming a low-tax, lowregulation business-friendly economy.

We already have a reputation for being a good place to set up a business. But outside the EU we could go much further. We could, for example, emulate Singapore, which consistently tops polls for the most business-friendly economy in the world thanks to low taxes, streamlined employment and access to capital.

Remainers, of course, scorn the idea of Britain becoming a European Singapore. It can’t be taken for granted that a UK government would be brave enough to go down that route – which is perhaps why Philip Hammond has rowed back on the idea somewhat.

There is little question, though, that many in the EU are terrified about Britain drawing investment away from the EU. A World Bank survey which puts Singapore as the most business-friendly country puts the UK at number six, Germany at number 15 and France outside the top 20.

It has been clear for some time that Michel Barnier and many others around him value a political victory over Britain over the economic wellbeing of EU member states. They are quite prepared to compromise free trade in order to be seen to mete out some kind of punishment for Britain.

Theirs is not a position of strength. What drives them is law the fear that other member states will follow Britain in coming to the conclusion that they, too, would be better off outside the EU. Their thinking is logical in one sense. The prospect of another nation wanting to leave is higher than they dare think.

APOLL in the Netherlands this spring, for example, suggested that 56 per cent of the population favour leaving the EU. In Sweden public opinion is generally negative towards the EU. Even in Poland, where pro-EU views are strongest, the EU now seems to be doing its best to turn the public against it by challenging the rights of the Poles to make their own laws.

Britain is not unique in having a large Eurosceptic population, only in having held an inout referendum in recent years. The EU would certainly not be able to withstand the loss of another of its net contributors. It cannot exist in its current form only with countries which take out of the budget.

Hopefully the EU will come to its senses and negotiate a proper free trade deal with the UK, allowing cross-border business to carry on pretty much as it does now. But if not, and we have to conduct business with the EU under WTO rules, it will not be a disaster.

Chances are that within a year or two the EU, minus Michel Barnier, will come back to do a deal after all.

‘It is EU exporters who have most to lose’