Sunday 13 December 2020

No-deal unleashes a raft of economic opportunities, Tom Harwood

More Telegraph guff, this time from Tom Harwood. He excoriates Ireland for its low tax rate for the Amazons of this world then says the UK can attract such businesses by, er, cutting our corporate tax rate to below Ireland's. The rest is Vote Leave bulls**t and ignorant tosh.

Read on for the full text of Harwood's strange little article.

As the 'future relationship' act of the Brexit saga draws to a close, it is becoming increasingly clear that the EU is not negotiating in good faith. Last minute demands not made in any of the bloc's other trade deals have stalled the talks. Uniquely, the EU is demanding the UK stick to its rules – even as they make new ones in the future – or else face tariffs and effectively junk the FTA.

The only reasonable conclusion is that the EU is more interested in politics than trade. This is a bloc that doesn't want a deal. So be it. Yet they might just come to regret it.

The EU knows the fundamental Brexit red line, the point of the entire project, is to gain the freedom to be able to do things differently; to regulate our own economy and control our own country. Yet, unlike in its trade deals with Japan, Canada, South Korea – or even the proposals it made in the abortive TTIP negotiations with the United States of America – the EU did not demand these sovereign nations 'dynamically align to' (or more accurately bow before) its rulebook in perpetuity.

By trampling all over the reasonable and proportionate offers the UK has made (in many parts simply copy and pasted from the EU's other deals), it is clear the EU is not treating this process seriously. This undiplomatic intransigence may prove to be one of the bloc's bigger geopolitical missteps of recent history. With a less than friendly neighbour on our doorstep the UK will have not choice but to supercharge our competitiveness, the very thing the EU's unprecedented 'alignment' demands seek to constrain.

We will suddenly find ourselves free to throw off the EU's tariffs unilaterally , making imports substantially cheaper from nations right the way across the world. The unilateral free trade enjoyed by shining economic success stories like Hong Kong propelled them to prosperity. The moves New Zealand made under 'Rogernomics' delivered some of the highest living standards and most competitive industry on the planet.

As Ronald Reagan used to say of attempts to 'protect' industry through tariff barriers, "instead of protectionism, we should call it destructionism. It destroys jobs, weakens our industries, harms exports, costs billions of dollars to consumers, and damages our overall economy." Counterintuitively, ditching tariffs builds up our economic immune system. Exposing our industry to the winds of global competition strengthens it in the long run.

But there's more we can do as a country freed from the regulatory snatches of the EU to become resurgently and fearsomely competitive. We can seize on this moment to do away with many of the literally hundreds of thousands of regulations that govern and inconvenience our everyday lives without us even realising. From Brussels directives on temporary workers, working time, chemicals, and end of life vehicles, to anti-scientific bans on genetic modification, restrictions on growth generating venture capital, irritating, ignored, and anti-internet 'accept cookie' requirements, and even silly seemingly trivial restrictions on the power of our vacuum cleaners.

Shedding the weight of many of these restrictions will help unleash a new tiger economy no longer constrained by the ball and chain of the EU. But we shouldn't stop there. Responding to the EU's outright hostility in these negotiations, it's time to grab EU tax revenue for our own. Now is the perfect moment to make a statement to the world that Brexit Britain is open for business. For years the likes of Amazon, Google, and Facebook have avoided paying in high tax parts of the world, to drive global revenue through lower tax regions.

By setting a level of corporation tax that sweeps the rug from under the EU, and particularly the Republic of Ireland, we could spur some of the world's largest companies to relocate. All coming to pay their tax in the UK instead of the EU. Domestically there is no doubt that this moment must be coupled with immediate reform that has hitherto been scrupulously avoided by all too cautions politicians.

No Deal creates the context for wide reaching planning reform and the abolition of Stamp Duty. Legalising and taxing cannabis would bring a harmful black market into the light and raise billions in revenue. Abolishing the Factory Tax to boost investment. Changing the Bank of England's mandate to target Nominal GDP growth rather than simply inflation.

This is the radical manifesto to which the Government must commit before the year is out. Perhaps it would make the EU think again about what they are about to stir up. Perhaps it will prove an economic awakening that puts the sclerotic centralising anticompetitive high taxing European Union to shame. No Deal unleashes a raft of new economic opportunities. It's up to us to embrace them.


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