Negotiating our way out of the EU?

In the muddle of the tv debate on Tuesday there were three positions advanced on how to get out of the EU, and effectively three positions on when to get out.

Mr Stewart argued that Parliament had to pass the Withdrawal treaty it has thrice rejected. That looks very unlikely. In default of that he invented all sorts of new processes which would entail a long delay in exit. HIs further consultation with the public might well be designed to move towards a  second referendum or some other way to stop Brexit altogether.

Messrs Hunt, Javid and Gove argued there had to be a renegotiation, with efforts at least to remove the backstop from the current Withdrawal treaty. It is difficult to believe any of this. The EU has made clear they do not intend to re open the Withdrawal Treaty issues. Changing the Political declaration would not change the backstop or any of the other bad features of the draft Treaty. There is no obvious authority to negotiate with before the new Commission is formed. It seems impossible for a new PM to engage in talks, get meaningful changes to the Treaty and put it through Parliament before October 31. Two of the three countenanced a short delay to get an agreement, with Mr Gove favouring a delay until  end December 2019.

Mr Johnson insisted on exit on 31 October. He has in mind offering a free trade deal to the EU. If they will agree to talks on such a proposition then the UK need not impose any new tariffs on them as we leave, nor them on us. Under GATT 24 there would be ample time to discuss the Free Trade Agreement whilst continuing to trade without tariffs whilst doing so. If the  EU refuses to discuss a Free Trade Agreement then we leave without a deal and impose the same tariffs on the EU as we impose on everyone else. They do the same to us. The EU has always said they are interested in a free trade agreement but it has to be negotiated after we have left.

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Then there were five

The elimination of only one  contender drags out the contest a bit longer. The contest anyway has become  a race for second place, to see who would be best to go up against Boris in the  lengthier phase of the contest appealing to the members in the country. I think a Johnson/Hunt contest would be best.

It was unfortunate that Rory Stewart wishes to turn the contest into a re run of the referendum, in denial of the clear stance for Brexit all Conservatives put to the electorate in order to become MPs in 2017. He studiously avoided even contacting many Conservative MPs he knew to be committed to our 2017 promises, preferring to attract the support and good wishes of the media, especially the BBC, and sections of  the general public  wanting a second referendum. He then claims he could get the completely unacceptable Withdrawal Treaty through the Commons after its three big defeats.

The contest has had an unreal air for another reason. Several of the candidates claimed they could renegotiate the Withdrawal Agreement in time for  our exit on 31 October. There has  never been any glimmer of reason to suppose the EU would enter deep and serious talks about rewriting the Agreement, or that such work could be completed between the end of July and the end of September allowing time to ratify the Agreement by both sides.

The BBC debate was dreadful. It was set up  and chaired badly so we learned little. There was no wish  to allow or require a serious discussion of the major issues facing the country. Boris was constantly interrupted by the presenter and the BBC pursued its agenda to make sure the candidates could not discuss the great opportunities that follow if we just get on and leave.

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Brexit, populism and the future of the EU – new talk at Politeia, 2 July

The Foreign Press event about my book “We don’t believe you” may not allow the public tickets we now learn. I will keep you posted if the press relents over wider public access to the event on  24 June

Owing to strong demand I have arranged a new  presentation and event with Politeia for 2 July at lunch time at the Oxford and Cambridge Club, Pall Mall. They can help you with tickets on 0207 799 5034. This will help those who were too late for tickets for the IEA. It will be a different talk with a  panel to follow up interesting and topical issues.

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The Fed rethinks – what about the Bank of England

The Fed realised late last year it was raising rates too much and tightening the money supply too severely. It backed off and announced a re think. It is currently working its way through how it can change its approach and make it friendlier to economic growth.

The Bank of England needs to do the same., It has been tightening too much for the last two years. Like the Fed, it relies on out of date theory based around the concept of national capacity. It thinks it knows what national capacity is, and argues that there will be inflation when we reach close to that capacity. For an open economy like the UK it is an odd way of thinking about it. We import goods and services and we import labour so our capacity is not constrained by UK resources, whilst world products, services and labour keep prices and wages down as a result of  global competitive pressures.

The Bank seems to want to prove a point about its errant pessimistic forecasts over Brexit. It should listen to what the Fed is saying, and back off from its current over tightening. The UK economy needs a bit more Bank flexibility at a time of slowing world growth and little inflationary pressure. They need to revise their views on how to settle interest rates, in line with the Governor’s lecture explaining  h0w the Phillips curve was now flat . Given this there is little need to raise rates as unemployment falls unless there are other signs of overheating or too much credit.

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Speech at 40th anniversary conference on Margaret Thatcher

I spoke on Saturday at the Anniversary Conference at the Thatcher Centre, Somerville College Oxford.

I spoke about wider ownership policies, about the poor economic background to the start of her premierships and about the impact difference on European policy had on her period in office. I am asking for a copy of the video of the speech to be available here for those interested.

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Carbon dioxide levels keep rising

The more the UK cuts emissions of O2 the more the rest of the world increases them. Someone sent me the 2018 latest figures from the BP Energy Review. Since 2010 world CO2 emissions are up 9% whilst the UK has been cutting. Last year there was a 2% global rise, with only the UK and Europe down. The increases were led by China, India and the rest of the world excluding the USA and Europe.

China still uses coal for more than half her energy demands, whilst the UK has eliminated coal in its generation mix. Last year an additional 280 million barrels of oil equivalent of gas, oil and coal was consumed, compared to just 100 m barrel equivalent increase in non carbon renewables and nuclear.  Renewables now account for just 4% of world energy, with hydro and nuclear 11%, whilst coal represents 27% and oil and gas 54%.

Those who see rising carbon dioxide as  a major threat need to answer the simple question what are they going to do about the huge increases in fossil fuel use outside the UK and  Europe. The figures show even if the UK succeeded in eliminating net carbon usage world use and output of CO2 would continue upwards with no visible impact of the UK on the world graph. It will take major changes of behaviour and investment in China,India and the other large carbon users to shift the numbers in  the way climate campaigners want.

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A parallel currency?

The Economic Adviser to the Lega party, the larger of the two governing coalition partners in  Italy, has come up with a scheme for mini BOTs or low denomination Treasury Bills. The Italian Parliament recently passed a motion in favour, though this is not binding and the Treasury is not yet printing and issuing  these bonds.

The Italian state like others issues Treasury Bills to institutional investors. These are usually short term loans to help finance public spending. They can be traded against their electronic certificates.

This  new scheme is to issue so called Treasury Bills or  bonds with no repayment date and no rate of interest payable.  They would be issued with physical certificates or notes in 10,20, 50 etc Euro denominations. Individuals could pay tax bills with them, or buy any goods or services from the state like petrol from a state owned filling station.

The European Central Bank has been asked about this. They have said if this is a parallel currency it is under the rules of the Euro scheme illegal. If these are debt instruments they have to be under the overall budget deficit and borrowing controls that apply in a single currency.

The mini BOTs look much like banknotes and would give the Italian state the effective right to print a money substitute to get round some of the controls on their economy from the Euro scheme. It is a provocative idea. So far they have put the idea into circulation but not the notes. If they did start to issue them it would be a major challenge to the Euro.

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Briefing on the development of populist politics in the EU on 24 June

On 24 June I will be briefing the foreign correspondents interested in populist politics at the Brand Exchange 3 Birchin Lane EC3 at 2pm

I will talk about the success of  populist parties in the EU and the last European election, look at what they want and how they are developing their power and influence, and explain how Brexit has changed UK politics radically.  The thoughts in  part come from my latest book, “We don’t believe you”  (available on Amazon) and will assist with further updating of that book.

Please let me know if you are wanting to come.

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Remain does not do democracy – they just assert they know better than the people

The Remain MPs who lost the referendum now tell us we must believe in Parliamentary sovereignty and let Parliament decide whether we leave the EU or not. They try to claim Leaver MPs are not democratic in wishing for us just to leave. They want to pitch Parliament against the people, and get Parliament to dilute or cancel Brexit. They do not accept our argument that Parliament gave the decision to voters and promised to do what they decided, so to do otherwise is to undermine the sovereignty of the people.

This week they had their way and put so called No Deal back to the vote. They lost. Under their own doctrine they should now be saying that Parliament has exercised its powers and has come to a decision. Some of them, of course reveal yet again their anti democratic instincts by claiming Parliament must vote again on  this issue as it got the wrong answer. Clearly as they see it Parliament did not understand the question!

The irony of the Remain position is huge. These Remain MPs who delighted in voting away our Parliamentary powers in treaty after Treaty, Directive after Directive, now like to pose as upholding the rights of the very Parliament they trashed  by removing much of its freedom  of action. Now they demand that Parliament votes to deny the people their decision. Each time they lose they demand a re run on  the grounds that Parliament, like the people, has got it wrong and needs to vote on it all over again.

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Court cases arguing the UK has already left the EU

Some correspondents want to know why we learn nothing about these cases. As far as I can see it is because their sponsors are not writing or talking about them, so we do not know where they have reached and what is happening. On this occasion it does not appear to be a media inspired news blackout as some fear.

I checked with Mr Robin Tilbrook’s website yesterday, as he brought the first case. His  last blog post I could see about the court case was 14 May when he attacked Bill Cash and Nigel Farage but did not bring us up to date on how well his case is progressing. Maybe his lawyers are telling him not to tell the rest of us about it.

Nor have I seen any news on the Barry Legg case. I would be happy to comment here if news is released that we are allowed to talk about. Both cases I believe argue that Mrs May’s two delays were not legal in EU/UK law, though they are clearly being regarded as such by the government.

Supporters of Robin Tilbrook tell  me the Legg case has not yet appeared in the courts. They want me to write a positive article about their case. I have explained that if Mr Tilbrook  or his lawyers publish an up date I would be happy to write about it.

I just want us out of the EU. I have also been supportive of  Sir William Cash’s statements in Parliament about the failure of the government to delay our exit in a legally watertight way and joined in the unsuccessful Parliamentary pressure to defeat the move to delay. I spoke at the Committee we demanded to consider the relevant Statutory Instrument so I could condemn the delay.

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  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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