Putting the flesh on Brexit

One of the big flaws of the Brexit campaign so far has been the failure of its leaders to give any detailed information about what the UK might look like if they are victorious. It’s a serious weakness for the Out campaign, and explains why the Remain camp’s Project Fear scaremongering over lost jobs and trade drying up appears so convincing.

That’s about to change. Andrea Leadsom, the Tory energy minister and Brexiter, tells me she is working on a new post-Brexit ‘big-bang’ manifesto for how the world order might look after a european divorce which she is calling, with nice irony, ‘Project Hope’.

To do this, she has revived the Fresh Start Project – a group of cross-party MPs and businessmen and women – set up a few years ago to put the case for eU reform. Boris Johnson and Michael Gove, along with many other Outers, are backing Leadsom’s new initiative which is due to be announced in mid-April.

It is putting together detailed answers to the top ten questions being asked by the public; including the impact on trade, on the City, on energy policy, immigration and security. It will also be publishing six one-pagers as guides on what it means for individuals; mini Brexit fact-guides for farmers, small business owners and teachers. Coming up with recommendations for a new ‘UK eU Free Trade Agreement’ is top of her agenda. Leadsom aims to show it’s entirely possible for the Government to renegotiate its own bilateral treaty with the eU within the two-year time-frame given by Article 50, and to stop the constant comparisons with other countries like Canada or norway, ones which can be misleading.

So what would such a new UK-eU free trade arrangement look like? Well, Leadsom says that the existing rules could on a temporary basis be ‘novated’ from our present arrangement with 28 signatories to one; and that there is no reason why eU and business could not carry on as usual.

She makes the point, often over-looked, that most trading relationships, whether it’s health regulations on drugs or safety guides for exhausts, between the UK and eU are already aligned so won’t need much adapting. There’ll also be a big push to squash Remain’s claims that our biggest trading partners, Germany and France, will try to get their own back on UK business for daring to leave by either limiting trade, or putting up costs with new tariffs. Such claims just don’t add up, she says, as national governments have no business telling the bosses of private companies such as BMW or Louis Vuitton to whom, or where they should sell. Or so you would hope.

Another urban myth Leadsom, a former banker and economic secretary to the Treasury, hopes to kill off is that UK services – including the City’s financial services – would be destroyed by divorce. This is nonsense, she says, and she’s right: the size of our services trade with eU is relatively small. Around 71pc of the eU’s GDP is services, and of that the UK’s intra-eU trade is only 3.2pc, rising to 22pc if you include financial services. By contrast, some UK industries, such as ecommerce, are hampered by blatant protectionism in other eU countries.

More pertinent is the myth of a bankers’ exodus to Paris or Frankfurt because the City will be disadvantage by being outside the eU. Au contraire. The chairman of one of France’s biggest banks recently told her that he is worried about the barriers that the City might put up to eU companies in the event of a Brexit as eU companies benefit hugely from trading with the UK.

Indeed, over a third of the eU’s wholesale financial services industry originates in the UK and until the financial crash, the UK was a liberalising force in opening up the eU capital markets. Ironically, the eU’s attempt to push up capital adequacy ratios for banks had unintended consequences; regulators here wanted higher ones than those recommended.

Leadsom first came to the public’s attention at the Treasury Select Committee after the financial crash when she criticised Bob Diamond of Barclays for living in a parallel universe. Who knows. If Leadsom manages to help bring Brexit down to earth, maybe she could end up leading the negotiations.

Steel’s white knight ...

SAnJeeV Gupta is the most extraordinary of businessmen. The Cambridge-educated steel trader is as bright as a button and has a passion for British steel which borders on the obsessive.

I met him a few weeks ago to find out why he is throwing hundreds of millions of pounds at buying up distressed steel plants and engineering factories when everybody else is closing them down. His answer is simple; with a little care and investment, he reckons parts of the industry can be competitive again.

But for the industry to be saved, the Government must slash energy prices by cutting carbon taxes. And it should rescue parts, if not all, of Tata Steel. He’s right; the banks were too big to fail and the steel industry shouldn’t be allowed to fail either. Without steel, the country has no backbone. Gupta is the first person the Prime Minister should see when he gets back from the beach.