Fear at last stalks Whitehall on EU issues. We hear that they are crisis gaming what to do if Euroland plunges rapidly towards more integration. Officials seem to see this as some kind of threat rather than an opportunity for the UK. They are worried that the UK will be excluded from meetings which have an impact on the single market. They seem to worry lest our “partners” use new EU powers to damage UK trade with the continent.
It has been blindingly obvious to some of us for years that the single market project was more about centralising government and less about free trade. Continental politicians used the promise of more trade access to markets as the carrot to lead an ever reluctant and slow UK into more laws and binding government arrangements. The issue before the UK now is not what will some future more centralised EU do to damage UK trade, but what can the present government do to stop the damage already done, and about to be done, in the name of more centralised regulation and taxation?
The UK establishment needs to bury its own misleading rhetoric about the importance of EU trade. Our trade in services is primarily conducted with the rest of the world, thriving most in common law and english speaking jurisdictions. Most of the inward investment into the UK comes from outside the EU. Only in physical goods trade is the EU more important, and even there it is only around 40% after adjusting for the entrepot effects.
Government needs to grasp that as we are in heavy deficit on the goods trade with the EU there is more at risk for them than for us. I do not think we should take seriously any threat which boils down to Germany refusing to sell us more BMWs. The World Trade Organisation also gives us various guarantees about access to continental markets, whatever the EU tries to do. Non EU members manage to trade with the EU without belonging to the legislative club.
The UK is vulnerable by virtue of being in the current EU structure. It is vulnerable to regulations and directives which do especial damage to sectors the UK is strong in, like finance. We are vulnerable to general anti enterprise laws which the EU specialises in. If being a member on current terms entails having to fight endless rearguard actions against taxes and regulations designed to make business in our finance sector more difficult, we need a change of relationship. If our much heralded industrial revivial encounters uncompetitive energy prices owing to EU regulation we need to change things.
That is why I made my modest proposal that in this crisis the UK allows Euroland to press on to single economic government in return for having an opt out from anything we do not like, past or future. If even this modest proposal is too much for the government, they may find the more radical option of seeking to pull out altogether gains more support in the country (currently 29%), widening the divide between people and politicians on this most funadamental of matters. The polling shows there is a strong majority for much less EU interference in our lives. Many more people in the UK want a relationship which enhances trade and freedom. They do not like what they see as the gloom gathers over Euroland. If Euroland seriously thinks the UK should pay more of the bills for the Euro’s failure, they may merely succeed in radicalising the UK against them.
The Uk establishment needs to wake up to the reality that the EU is doing damage to the Uk economy by many of its rules and taxes. They need to grasp that we do not need to accept the current level of interference, let alone sign up for more, just so France and Germany can carry on selling us things.
Some of us have been urging a UK clause when the Euroland members go ahead with their proposed change to Article 136 of the Treaty to allow a Stability Mechanism. We regard this as a big change, involving the Commission, and would like a change of the UK’s arrangements at the same time. The government sees the Treaty amendment as an advance for the UK, as the planned ESM will replace the EFSF and EFSM, so removing future risk of the Uk having to help with Euro area bail outs after 2013. For this reason they do not seem willing at the moment to demand more in return for consent to this Treaty Amendment, which was agreed in principle on 25 March 2011.
The dire situation is underlined today. We learn of another sovereign bond downgrade for Italy. Greece is on strike. It is unlikely that more strikes will persuade the Germans to send more money to Greece. The strikes will simply make the problems worse, cutting Greek output and tax revenues further. They are striking against themselves. Finance Ministers are working on plans to support Euroland banks, but the weaker sovereigns have limits on what they can afford. David Cameron is right that the way out of a debt crisis is to borrow less, not more. The UK public sector has to speed its work in this area as well.
October 5, 2011
If Mr Cameron, Mr Clegg and Mr Osborne could appreciate what you have written, and how much of the electorate agrees with you, we would all be far better off (literally and figuratively)
October 5, 2011
I wish you were Pime Minister.
October 5, 2011
Hear him! Hear him!
or, in modern parlance “hear! hear!
October 5, 2011
Mr Redwood would be best as Chancellor in these turbulent times.
October 5, 2011
Fat chance. Far too much common sense and not a ‘moderniser’.
October 5, 2011
An so do I!
October 5, 2011
I agree wholeheartedly with this analysis. The UK’s massive trade imbalance with the EU is hardly ever mentioned in the public sphere. All we ever hear is ‘40% of our trade is with Europe’, (subtext: ‘so let’s do anything to keep them happy).’
The reality is that we are a kind of Zombie customer, soaking up goods from other EU countries while they refuse our more efficient services and farm products. And all the while that all come over to hoover up our fish almost to the point of extinction. Many thanks here to Ted Heath and the Common Fisheries Policy, one of the many disgraces of the EU. I cannot understand why we prefer to import milk from the EU while our dairy farmers go out of business, or import pork products from countries where animal cruelty is rife.
As an anorak point, interesting that you mention the International Trade Organisation, which has not come into force, rather than the World Trade Organisation, which has.
October 5, 2011
“Why do we import milk from the EU?” You can blame a lot of housewives for that one. Supermarkets sell cheap milk and as long as it’s cheap, they’ll carry on buying it in preference to the local milk which is usually that bit more expensive. Most women I’ve spoken to just don’t care where it comes from and that’s a sad fact. Same applies to fruit and veg, they just don’t care where it is grown as long as it’s “cheap” or “value”. Trying to encourage them to Buy British just attracts sneers.
I still have a doorstep delivery of local-area milk and buy UK produce as much as I can. I daresay the real reasons we import milk are numerous and complex…..goes over my head….all I can go by is what happens at the consumers’ end.
October 5, 2011
You’ve hit the nail on the head .
As long as that attitude prevails and people do not make an effort to buy from their fellow countryman we are never going to get money circulating properly in our own economy .
Food is the obvious one because people spend so much of their income on it .
Clothes don’t even have labels on them saying where they are made these days , unless they are legally obliged to eg Peter England shirts have to state where they are made because they have England in the name .
So few British items are stocked in clothes shops that the consumer does not have a proper choice .
The lack of patriotism extends to the honours system ; retail magnates who bring in container ships of tat from low labour economies are rewarded with Knighthoods .
Simmilar can be said for bringing in cheap labour from abroad via ICT visas etc . It seems that the boards of most companies think that where employees are concerned quality and quantity are interchangeable .
October 5, 2011
The UK milk producers are not free to produce as much as they would like because the EU fixes it to assist other member state farmers.
I expect there are unlevel issues in milk as in free range egg production, for which Eastern and Southern member states will be using older smaller and cheaper cages after 1 January when Britain’s farmers use bigger more costly ones.
Even as UK farmers were building the bigger ones mandated by the EU, some Polish farms were installing smaller ones in breach of the regulations. Their eggs will be sold here as free range in competition with those from ouir farmers who will not be able to compete.
Remember, “single market” was never meant to mean “free market”; it is a managerial structure designed by and for bureaucrats.
October 5, 2011
Beggars belief doesn’t it .
Our politicians are not only not working for us they are actively working against us .
October 5, 2011
If you have evidence that Polish farmers are breaching EU then send it to the ECJ and they will prosecute Poland. If you have no evidence then stop making up such nonsense.
October 5, 2011
Unfortunately local produce has become a euphemism for overpriced. When local producers are prepared to offer value not just branding I will be prepared to purchase from them.
I am happy to buy local products but, necessarily, unhappy to be fleeced.
October 5, 2011
Brian Kelly: “I am happy to buy local products but, necessarily, unhappy to be fleeced.”
Good point, to which the answer must be, be a discriminating customer.
Don’t care if I have offended the PC police, simply trying to rehabilitate a perfectly sound word.
October 5, 2011
Agreed. However, I wasn’t reassured by Mr Osborne’s comments last night. He seemed to be wavering in how he would deal with the worsening situation in Euroland. By that, I mean that he seemed to be moving towards the idea that we would ‘help’ them in some way because they are supposedly so important to our survival. As you state, that position is overstated. We have a trade deficit with the EU, some of that 40% trade passes through Euro ports on to non EU countries. We must think bigger and widen our horizons as a well positioned trading nation. I worry that this government will allow us to be dragged down with Euroland.
It is getting serious now and the next two weeks are crucial. If they don’t impose some financial confidence on the markets they are finished.
Zorro
October 5, 2011
Thank you for carrying on the fight in Parliament. I am convinced that the bureaucratic elite, in which I include the Government, are very much at odds with public opinion on our relationship with Europe.
October 5, 2011
I endorse the comment of Mick Anderson.
Personally I have always been a supporter of the EU and to a lesser extent have been an advocate of the Euro. However, the recent history of the Euro and political indecision has convinced me that it it is time for radical change in the EU.
Is it perhaps time for the troika to focus its energies on the European bureaucracy, especially targetting the inefficiency and waste in the Public Sector administration across Europe?
Why did the UK lose its EU rebate, whilst France continued to secure the enormous benefit of the Common Agricultural Policy (CAP) which is hugely inefficient?
October 5, 2011
Re. the reduction of the rebate try Tony Blair being more prepared to believe the duplicitous French than having any thought of ‘fighting’ the British corner.
October 5, 2011
I suspect it was more to do with promoting his cause to become EU president.
October 5, 2011
But hears the thing, politicians also balance personal interest against national interest. Do not think that national interest prevails, it does not.
October 5, 2011
Dr Oldman: “Is it perhaps time for the troika to focus its energies on the European bureaucracy .. ”
Isn’t that rather like asking the hydra, ‘Look old chap, would you mind just hacking of one or two of your other heads please?’
And just as effective.
You are after all, asking one section of the bureaucracy to reduce another part of the bureaucracy, they’d go about it by setting up a committee.
October 5, 2011
Even the Germans are being less than cordial about matters……http://m.spiegel.de/international/germany/a-789797.html#spRedirectedFrom=www
zorro
October 5, 2011
It does seem that tempers are getting frayed.
I note:
“Furthermore, members of the Free Democratic Party (FDP), Merkel’s junior coalition partner, have recently become more outspoken in their view that a Greek insolvency is far from out of the question. According to a report in Tuesday’s Frankfurter Allgemeine Zeitung, German Economics Minister Philipp Rösler, who is head of the FDP, has developed a proposal for rules governing a state insolvency. The rules, Rösler reportedly hopes, are to be included in the European Stability Mechanism (ESM), the permanent bailout fund that is to take over from the EFSF in 2013.”
Same report as I’ve mentioned below, “When is a stability mechanism not a stability mechanism?”, but of course if Greece is going to default it’ll do so long before 2013.
October 5, 2011
zorro, good read at http://www.stratfor.com/weekly/20111003-european-crisis-precise-solutions-imprecise-reality .
BTW. On Monday this week I made an appointment to see my current GP. First available appointment on Tuesday, next week. Eight days!!! Three years ago the wait was three days – same surgery – and often less if you took a cancelled appointment. Do you think I should write to my MP?
October 6, 2011
We can’t book ahead. We must phone in and try to get an appointment on a first-come-first-served basis. Once I failed to get through in time and had to start the whole process again the next morning.
If you work nine-to-five you must take time off (no weekend surgery) and no guarantee of getting an appointment.
Yet again another example of – if you work – providing someone else with things that you can’t use yourself (free school meals, public sector pensions)
Off topic: Fat Tax ??? Are they having a laugh ?
Wouldn’t it be fairer to just tax those who are fat ?
I don’t buy it that people are fat because they are poor. To become morbidly obese requires a lot of money whatever it is you’re stuffing your face with.
October 5, 2011
What has the government to gain by following their line rather than your entirely sensible one above? I can think of nothing. I heard David Davis yesterday saying he thought Cameron was a Eurosceptic I cannot see it myself and I do not think he would be much different even without the Libdems twisting his arm.
We do not want, yet again, after the ERM, the bank “rescue”, the poor growth and the EURO PIIGS fiasco just to be saying we told you it was a bad idea!
The line should be we agree to what ever they want so long as we can opt out of anything we want to. Then we can pick and choose in our interests as we like – who can object to that. Doubtless the Libdems will, who do not seem to think about “the UK interests much at all”.
They are hooked on the five Libdem religions: Green gross exaggerations and energy at 10 times the going rate, the ever closer EU top down one size government, kick business and the rich whenever possible, forced equality of outcome on all and human rights determined by Strasbourg rather than at home (clearly UK brains are not up to it – though we could of course copy Strabourg when we though it was right).
October 5, 2011
A typical bank:
Three years ago the banks – Yes mr X you are a very good customer what is you latest project? We can probably to to 75%-85% Loan to value at 0.8% over base and 0.5% arrangement fee no exit fee and lend you say up to £1.7M.
Now same value property same bank. Well I am afraid it is very hard on development we might to 45% LTV at renewal so perhaps lend £900K at say 5.5% over base on a two year basis with an entry fee of 1.5% and exit of 1%. Do you have the £800K down you sofa somewhere Mr X or can you pull it out of you other developments?
Of course it will need to go through several levels of approval, valuations and our special property unit now so will take about 6 months to go through and there will be their fees too to cover. The situation may change by the day too so we cannot guarantee anything at all until then.
October 5, 2011
Then go elsewhere for your money. You are not forced to borrow at these rates. A bank is much like any other business and free to pick and choose their customers. There is an entire global financial system to choose from. You seem to be under some sort of impression that you should be allowed to borrow at rates and terms that you, not the current market dictates. Why should that bank take risk? It is like a pub free to serve at their own discretion. Spare us from any bleating about creating jobs and helping the country.
October 5, 2011
I am just illustrating why growth is so hard to come by when the banks are not lending. They are not lending, even when there is no significant risk, they are clearly just not in the lending business anymore they are in the, demanding money back, business.
October 5, 2011
Lifelogic: “I heard David Davis yesterday saying he thought Cameron was a Eurosceptic. ”
Ha ha! With judgment like that perhaps its for the best he didn’t win the leadership election.
October 5, 2011
The triumph of hope over experience perhaps.
It is rather hard to believe it when Cameron appointed Lord Patten to head the BBC trustees.
October 5, 2011
I see reported that Cameron – will urge people to pay off their credit and store card bills and “deal with your debts”. In what is likely to be seen as a direct appeal to women, Mr Cameron will admit that it is “an anxious time” due to the rising cost of petrol, gas and electricity and food. He will say: “The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills. It means banks getting their books in order.”
Well perhaps if we had a policy for growth and fewer taxes on petrol, energy, NI, and VAT sensible banking they might have a little surplus income and be able to clear them. For many at the moment they only way they have of sorting them is some form of insolvency arrangement. Perhaps a cap on rip off interest rates above say 18% might help – even if just at the state owned banks Cameron?
The lack of normal bank lending is also pushing many people on to very expensive credit card borrowing – to great financial benefit of the banks (many that Cameron actually controls) who are able to make very big profits from this credit squeeze and high interest rates.
It is of course easier to clear your credit cards if you have a well paid state sector job, a good pension and lots of tax free expenses to claim – as I am sure he will understand. Less easy if you work in the “milk cow” private sector where your taxes are paying for all these benefits for others.
October 5, 2011
John, you say “The UK establishment needs to bury its own misleading rhetoric about the importance of EU trade. Our trade in services is primarily conducted with the rest of the world, thriving most in common law and English speaking jurisdictions”. Might this not be seen by the EU commissars as a threat factor outside of their control which, from their perspective, has to be eliminated by reducing the UK to subservience via EU legislation, taxation and regulation? Seems to be working…..
Off topic, I see that we are being urged to pay off our credit card and other debts to help rescue the economy. At the same time the government daily borrows more, thereby increasing the national debt and is now thinking of taxing all staple dairy and other foods containing fat. I must be quite stupid, because I cannot see how this strategy of getting we, the people, to reduce any spare money we might still have to pay off personal debts, thereby having less to spend on luxuries, let alone the basic dairy foods it is now considering making more expensive by increased taxation is supposed to help save the nation. How is that supposed to work?
October 5, 2011
I believe that credit card companies are reducing the credit limit for customers who do not roll over their card bills from month to month. Perhaps that is DC’s intention!
October 5, 2011
Indeed my wife limit was reduced by a state bank just by a letter out of the blue for no good reason she just was not using it all.
October 5, 2011
Lifelogic
Same here, but not just reduced, but to be cancelled when it should have been renewed, which may go as a negative mark on my credit record.
October 5, 2011
Now reported that Cameron:-
has rewritten the passage to say that the country has been suffering from a debt crisis and ”that’s why households are paying down their credit card and store card bills”.
Good it does not come well from someone in his position telling other to pay off their credit. Most would dearly love to pay off their credit cards – if only the government would stop pinching all the money off them and wasting it on too big a state sector, PIIGS, expensive green energy, state sector pension, overseas aid, the inefficient NHS, bad schools and the rest.
The real reason for the reduction is not customer choice it is that banks are forcing borrowing reduction onto customers in order to pay for the banks gambling losses they made elsewhere. Hence no growth whatever for 9 month.
So you pay once in taxes for the government bailout, you pay twice in higher fees and interest rates and you pay a third time due to the lack of growth thus caused by the lack of credit.
All due to “save the world” Brown’s lack of proper bank regulation, over spending (sorry wasting) and his hugely botched bank bail out system.
October 5, 2011
The problem as I understand it is not so much “gambling” losses but losses on the “mortgage backed” securities and Sovereign debt, both of which have been treated as solid, not unreasonably.
This seems to me because the illusion existed that the US Govt and taxpayer, via Fannie Mae and Freddie Mac, stood behind much of the “mortgage backed” debt, but they turned out to be only partially responsible, and able to walk away, and further that the Bundesbank and the German/French taxpayer would stand behind the European Central Bank, another illusion that is unravelling as we correspond.
October 5, 2011
If you are a banker and you are being sold an intrinsically worthless piece of paper for a large amount of money you are clearly gambling on it. Even if it is backed by someone who has been paid to say it is “triple A”.
Why not deal in real assets and take real security or charges directly avoid the absurd complexity and know that you have something tangible should push come to shove.
October 5, 2011
I see that Cameron in his speech talked of the vibrancy in Delhi and Laos perhaps he should look at the figures below from wiki and perhaps learn something.
Tax % of GDP Gov expenditure % of GDP
Laos 12.5 18.2
India 18.6 27.2
UK 38.9 47.3
Very disappointing speech he even hinted that he was happy using the IMF to channel yet more of our money to the black hole of PIIGS EURO fiasco.
October 5, 2011
It seems it was Lagos (not Laos) and Shanghai too but the same applies.
Tax % of GDP Gov expenditure % of GDP
Nigeria 5.9% 20.8%
China 18% 30%
October 5, 2011
After Cameron:
Remember: it’s not the size of the dog in the fight – it’s not the size of the fight in the dog, its the fact that the goverment has broken
one off his legs, tied his other legs togetter with red tape and loaded him with a state sector nearly the weight of him.
That is what counts.
Some good news though in the speech:
Cameron promised “I love our countryside and there’s nothing I would do to put it at risk.” so at least Huhne will go and no more wind turbines.
October 5, 2011
Funny how your ‘Let them eat cake’ attitude does not extend to personal debt. I wonder why! What have you wasted money on?
Do not borrow money you cannot afford Lifelogic. Why are you borrowing on rip off credit cards? What any government is doing or not doing is nothing to do with the your excess spending and is of no responsibility of any governments to cut your taxes to fund your spending on unnecessary purchases. You understood and accepted the terms and conditions of the credit card and if you did not are still to blame not the banks.
Blaming high energy prices and other high prices is no excuse either if you cannot afford gas/electricity then do not use as much.
Cut your coat according to your cloth would be the advice of any good Conservative.
October 5, 2011
Bazman – once again you are inventing – I did not say I was borrowing on credit cards.
October 6, 2011
Interesting though to compare your views on your employment and personal circumstances and personal debt. How they got there and how they plan to pay or not to pay the money back. Different story there I suspect. Exploitation, unreasonable terms and conditions unfair practices. ‘Choice’ and the lack of. The shame. What will the neighbours think? Oh how we will all laugh at the irony. I will anyway.
October 5, 2011
British brains are very much up to it. It was after all British Lawyers who drafted the European Convention of Human Rights and Fundamental Freedoms in 1951.
October 5, 2011
Good well lets have the jobs and the decisions made here then – rather than any recourse to Strasbourg.
October 5, 2011
At last somebody in Westminster has spelt out the present reality with complete precision from a UK viewpoint. I will link this from my blog AND quote it in its entirety so it might gain perhaps a wee bit of wider circulation. If only the present leader of your party had such clarity of view and thought!
October 5, 2011
I don’t think it is a matter of Germany refusing to sell us BMWs; it is a matter of us not having enough money to buy them. Because we did not join the euro we are poorer, with a currency which has lost value, and we will inevitably buy less BMWs. We need to become richer, with a currency that maintains its value.
We want companies like BMW to use British designs and equipment. As Mr Redwood says an increasing amount of our wealth should come from providing services, including “intellectual property”. Unfortunately instead of working to improve access for our companies to provide services as well as goods to the EU, the Conservative Party is devoting its attentions to anti-EU discussion. More missed opportunities.
I doubt that our balance of trade with the EU will improve as a result of more negotiation. We will continue to buy from the EU what we can afford, but they will buy a bit less from us. We will need to negotiate from outside, with even less influence than we have at the moment. We won’t avoid much of the bureaucracy or paperwork because the EU will still insist that we fill in all the forms and carry out all the tests if we want to sell to them. They will also insist that we continue to pay for services within the EU. In my view the outcome of the policy that Mr Redwood advocates is likely to leave the UK poorer.
Reply: Is the Euro making Greece, Portugal, Italy and Spain richer?
October 5, 2011
Unfortunately in the UK companies have gotten used to making poor quality goods and providing low quality service. These companies focus on nothing but making money and do so by underpaying and overworking their staff. The result is a demotivated workforce with no incentive to improve their company.
But it gets worse. Engineers and scientist who are responsible for innovations are poorly paid and leave the country as soon as they can to go where they will be appreciated. Training is prohibited due to its cost, so companies hire anyone who already has the skills or do without. Both of these combined results in an ageing workforce than no longer innovates, producing a range of outdated products.
Only the Government can save companies from themselves, unfortunately the current Conservative government would rather reduce employee rights and salaries than improve them, so the decline will continue.
Rerply: Slandering the hard work and excellent products made in the UK is not a good idea
October 5, 2011
To uanime5:
I think you are wildly out of date in suggesting that British products are shoddy. That may have been true in the 1970s but those were the companies that went bust. In the process, admittedly, we often lost the low-price sectors, leaving us with the high quality up-market ones, as in clothing, furniture, textiles and tools. Elsewhere, the well-made British products may be called Honda, Toyota, Nissan or Airbus and may be foreign-owned like Mini and Jaguar. The quality of British food has been driven up tremendously by the supermarkets and, in my view, is generally better than imported where there is a choice. And whisky is of course better than brandy.
No doubt there are exceptions. Would be interested to hear which products are still poor and out-of-date.
October 5, 2011
The ten most dangerous words in the English language are “Hi, I’m from the government, and I’m here to help.”
October 5, 2011
Do you think membership of NAFTA would be compatible (& possible to achieve) together with membership of the EU, perhaps if the UK gets the opt-out you propose?
reply: We could insist that it was, but I think the argument has moved on from that proposal
October 5, 2011
I’m giving odds of 50/1 that Dave doesn’t stand up to the EU.
I’m basing these odds on 40 years of the UK being sold out by it’s politicians.
October 5, 2011
The odds are just as good that no one will take you up on the bet!
October 5, 2011
JR: “They are worried that the UK will be excluded from meetings which have an impact on the single market.”
They are worried that UK civil servants will be excluded from brunches, lunches, champagne receptions and miscellaneous other dining opportunities during which the single market may be mentioned once or twice, just so the whole affair can be accounted for on expenses.
Fixed that for you.
October 5, 2011
I can say with complete and utter honesty I have never once been to a brunch or champagne reception either privately or as a civil servant. I have been provided with a sandwich and a cup of tea for lunch on occasions when travelling to meetings, however that practice stopped well before the last election.
October 6, 2011
Public Servant: “I have never once been to a brunch or champagne reception either privately or as a civil servant.”
Accepted as fact.
But, I imagine, it rather depends on the level of the CS you operate in. Are you the sort of civil servant that has the ear of the minister, a discrete whisper here or a nudge to the elbow there, while great matters of state are being
negotiatedsurrendered?.[Foreign and commonwealth office record negotiating in the British interest submitted as evidence.]
OR,
Are you the guy that oversees the Newport passport office?
Nothing wrong with the Newport passport office BTW, especially now as they seem to be able to process passports within a reasonable period of time – if at an extortionate cost.
Or does Crapita do it now?
October 5, 2011
As long as we are saddled with the current Conservative Party which is pro EU, then we will have to accept all the new regulations. I can only conclude that our spiv of a prime minister actually supports more EU intervention.
Is it any wonder that he lost the Conservatives the last election. He and the Conservative Party are not to be trusted.
October 5, 2011
John, I’m genuinely bemused as to why the entire country upto and including government back-benchers can see the way to economic recovery, literal recovery of sovereignty from the EU, and the imperative importance of staying as far away from the current Euro crisis as possible, yet the people pulling the strings at the top are either unable or unwilling to see.
Seriously, who is guiding their actions? Even in their coccoon of advisers they can’t be so utterly detached not just from public opinion, but their own party opinion, that they can’t see what needs to be done, when making these decisions would probably guarantee them an election victory next time round.
October 5, 2011
Our so-called leaders are nothing more than deer caught in the headlights.
My opinion is that they know the car is coming, they see the car coming, they know that the crash is going to be horrendous but they believe they are stuck in the middle of a busy motorway and no matter which way they move they’re going to get hit so do nothing.
October 5, 2011
The same could be said of the Greek people.
October 5, 2011
Horatio, if in fact “their actions” are being “guided” and you when to find out by whom I suggest you follow the money.
October 5, 2011
Mr Redwood,
One of the saddest days in UK politics was when you failed in your bid(s) for the Conservative Party leadership.
Such clear analysis of the problem and simple effective solutions, why aren’t you PM?
Eventually your logic must triumph.
Thanks for all your efforts, and more strength to your arm..
Thank you.
October 5, 2011
I hate to say it but superficial things such as the Welsh National Anthem video and not being particularly photogenic in younger years. Such things are afforded great importance in western politics and is why we have been getting leaders of lower intellect than we should. Having said that William Hague’s baseball cap ‘gaff’ does seem to have betrayed some disappointing qualities with the benefit of hindsight – what of Dave Milliband’s banana ?
I think too much is read into such things and politicians must be almost scared to move. I’d cock things up in the first day ! Important messages and ideas are lost because it’s all about image.
I hasten to say that Mr Redwood’s image has vastly improved in maturity and that he looks and sounds very statesmanly nowadays.
October 5, 2011
Electro-Kevin: ” .. William Hague’s baseball cap ‘gaff’ .. ”
Don’t forget Willies ‘I drank seventy four pints of ale before breakfast, aye lad’ other gaff.
The man is a fantasist. Probably should have got out into the playground when he was a child instead of hanging around the Tory party conferences.
October 5, 2011
Indeed it beggars believe that Tory MP’s preferred John Major of all people. How on earth are these MP’s chosen or “influenced” – such that they can come up with such moronic choices.
October 5, 2011
Somebody told me that there was a particular gender of UK voters who valued style over substance. She didn’t specify which one though.
October 5, 2011
Well they were Tory MPs, so nearly all men who idiotically voted for Major over John Redwood.
October 6, 2011
I think it’s the other way around, Bob.
October 5, 2011
I could easily be wrong and it could stagger on from crisis to crisis, but is this a Berlin Wall moment for the EU? It seems to be sinking and we need to start checking the lifeboats.
Quite simply Ted Heath got it wrong in his quest for peace in Europe after his wartime experiences. The only reason Europe has not been engulfed in war since 1945 is nothing to do with the Community/Union it is the nuclear deterrent and NATO(U.S.A.).
The peace argument is another red herring along with most of the so called benefits of our being a member.
October 5, 2011
Agreed. I would only add that NATO was a response to Stalin. When dictators of the very worst kind, as he was, are hovering on the horizon, your near neighbours take on an appeal you had not realised was there!
October 5, 2011
Agreed.
October 5, 2011
The denouement is here. It appears , judging from the fear in their eyes, that it too has dawned on the political class. With a few exceptions.
Some perspective :
McKinsey updated its TOTAL debt to GDP league table in June 2011 and Britain comes out joint top. Italy is a long way behind :
UK 500%
Japan 500%
Spain/France 350%
Italy 300%
USA 260%
And this year, our PUBLIC debt, according to the Centre for Policy Studies:
“The UK’s true national debt is now £3,617 billion ($5,930 billion) or £138,359 ($226,807) per household, according to the latest figures from the Centre for Policy Studies, a center-right think tank.
“With all the focus on deficit reduction, the issue of national debt has largely been ignored. Our updated figures show that the true public sector debt is a shocking 240 percent of GDP”
Perhaps some will quibble with the numbers, but anyway you look at them they are large.
Maybe we should be careful before we cast aspersions on others ?
October 5, 2011
More political fudges …
I said yesterday that the IMF/ECB would do a political fudge to try to find their way around Greece not meeting their deficit target of 8.5% – in order to rescue Greece and kick the can down the road. Now they have deciced to merge the 2011 and 2012 accounts – and guess what the 2012 accounts are very, very rosy predictions. In other words they are reality deniers (see reference below).
I think I’m being entirely correct in saying the Europhiles and political leadership of Europe have now crossed the line between reality and fantasy and can be accurately described as PSYCHOTIC – Wiki defines Psychosis as – a mental state often described as involving a “loss of contact with reality”.
Here’s the reference – an Editorial comment in the FT today.
“Editorial comment: A slippery rescue
It is not only the execution of Greece’s deficit reduction plan that has been slipping. So has the determination of its official creditors – the eurozone and the International Monetary Fund – to hold Athens to the commitments it has made. The decision to “merge” the public accounts for 2011 with those for 2012, for the purpose of assessing Athens’ compliance with the conditions in the international rescue plan, is a fudge. Its only plausible function is to postpone the point at which the rescuers must decide on the consequences of Greece missing its targets. “
October 5, 2011
Europhiles and political leadership aren’t psychotic, they’re optimistic.
October 5, 2011
This is in character – has the EU ever had a set of audited accounts and a clean bill of financial health? I suspect not.
October 5, 2011
Apologies. This was meant to be posted as a reply to javelin!
October 5, 2011
Javelin wrote: “I think I’m being entirely correct in saying the Europhiles and political leadership of Europe have now crossed the line between reality and fantasy and can be accurately described as PSYCHOTIC […]”
Only by an IT worker with projection bias.
October 5, 2011
Good Post This places our shocking level of National Bankruptcy in a true perspective. Cut Overseas Aid and the Pulic Sector “Gold Plated Pensions” now
October 5, 2011
40% of our nett trade is with Europe. So what? This is only so because of price differentials against non-EU products. If BMW etc still wish to sell into the UK – which they do – they will have to adjust their prices. Businessman are far more astute then Government officials at calculating how a market can be exploited.
October 5, 2011
EU partners have no interest in damaging UK trade.
The single market is not about centralizing government.
To be an EU friend or foe is entirely a British decision,
Just like the decision to apply for membership in the past or a possible decision to explore a future, more independent relationship with the EU. Many EU members would like Britain to join them in striving to complete the single market. Eurozone membership is not required for that.
The financial transaction tax, a matter of fairness, is not directed against the UK. To portray it as targeting the UK would be misleading rhetoric.
Reply: I could not disagree more. Why do you need laws for a single market? All we needed was the cassis de Dijon judgement properly enforced – any good or service which is deemed of merchandisable quality and legal in one country can be offered for sale in another.
October 5, 2011
Why does it have to be ‘friend or foe’ ?
Can’t we just be neutral ? Are you going to allow us that, Mr van Leeuwen ?
October 5, 2011
Our problems with the EU stem from the refusal to recognise that the other member states are friends, partners AND enemies. Its probably something to do with playing cricket.
October 5, 2011
Obviously you’re welcome to be neutral. Is it just my impression that the overriding British EU-attitude is one of hostility? I’d be happy to be wrong here.
October 5, 2011
I wonder why that is?
October 5, 2011
Peter van Leeuwen: “Is it just my impression that the overriding British EU-attitude is one of hostility?”
Peter, that’s an easy one. Most of us think the continent is great, we love the place, spend as much of our free time over there as we can. It’s just that we’d rather govern ourselves.
So for the avoidance of doubt, and before I skip off on my continental holiday, if there is any hostility it is to the European Union, not its constituent countries.
October 5, 2011
Peter we managed to prevent this USE over the previous 80 years. But it looks like this third time we will be sold out.
October 5, 2011
Peter, the contributors on this website are not representative of Britain as a whole.
Many (most?) are 55+. When they attended school the fading maps on the wall had large parts coloured in pink (British Empire). Keep that in mind when you read comments along the lines: “Tell Brussels … tear up the treaties … withhold our payments …”
Some from that generation are in denial about the self-inflicted harm to our economy – e.g. poor industrial relations that helped further the decline of the British motor industry. It is far easier for them to blame wicked Johnny Foreigner.
I think what (currently) frightens Eurosceptics is that if the euro survives the UK may be drawn into joining the currency by the influence of external actors – for example, if foreign companies here starting cutting back on investment or decided to move production facilities to Member States within the eurozone, because they do not like having costs in one currency (sterling) and revenues in another (euro).
October 6, 2011
That’s not how I feel about it, SJB.
The extremism and provocation is definitely coming from the EU and not the other way around and you don’t have to be 55 to see it.
Mr van Leewan let slip something quite revealing there: we can either be ‘friend or foe’.
I neither want to be friend nor foe – I just want what’s fair. Why introduce combative tones into the debate at all ?
As for denial about the decline of industry – that is patently not what any of this is about.
The decline in Britain over the past fifteen years has been palpable and rapid. We are continually told by politicians and judges that nothing can be done about it because they are hamstrung by the EU.
The recent financial losses to the EU are very real and dangerous.
October 6, 2011
‘Peter, the contributors on this site are not representative of the country as a whole’
Going by recent surveys it would seem that we are.
Stop being so patronising.
October 6, 2011
SJB: “Many (most?) are 55+.”
Does that constitute libel?
SJB: “Some from that generation are in denial about the self-inflicted harm to our economy”
Not this spring chicken, I have outlined how we have largely been our own worst enemy more than once in the comments. By restricting our freedom of movement and imposing its rules and regulation it entrenches our decline and makes it impossible for our politicians, however reluctantly to make the necesary changes.
SJB: “I think what[snip] frightens Eurosceptics is that if the Euro survives the UK may be drawn into joining the currency by the influence of external actors .. ”
Resounding vote of confidence in the Euro there SJB.
But what really annoys me is that the Tory party has been infiltrated by turncoats who have maneuvered us into the EU under the pretense that it was a better free trade area than EFTA, tricked us into abandoning our kith and kin in New Zealand, Australia because Heath so loathed the UK that he threw every advantage we had away in order to join the EU. Destroyed an ecologically sound fishing industry, Heath again and replaced it with some abomination that mandates that dead fish are thrown back into the sea rather than be landed and sold.
But what really gets my goat, is in the UK at least the whole edifice of our membership of the European Union has been built on a foundation of lies, subversion of democracy and ‘cultural cleansing’.
So SJB, three wrong out of three? That’s not a very good grade, must try harder.
Reply: I seem to rememebr all 3 political parties recommending membership in 1975, and the UK people agreeing in the referendum. Those of us who argued No were ignored or howled down by the general mood.
October 6, 2011
JR: “I seem to rememebr all 3 political parties recommending membership in 1975, and the UK people agreeing in the referendum.”
With Heath in the vanguard.
But it is true, there has been post war an utter failure and betrayal of Britain by its political class.
Few bothered to identify what was the cause of our decline and only one tried to do something about it.
Look on the bright side JR, you got a vote. I didn’t.
I reserve special opprobrium for the Tory party, it being the only party I have supported and its betrayal is very personal .
Support of the Labour party is of itself extenuating circumstances and probably grounds for committal.
October 6, 2011
David Cameron’s speech at yesterday’s Conservative Party Conference included the statement: “[…] as long as I am Prime Minister, we will never join the euro.”
But his body language is revealing: notice the increased blinking of his eyes as he delivers those words and when the audience starts to applaud he licks a section of his lips.
http://www.youtube.com/watch?v=D8zRxbJQLy8
(statement starts at 51 seconds)
Despite the surveys Electro-Kevin mentions, Britain has elected a pro-EU House of Commons since 1979. That is the authority for my assertion: “[…] contributors on this site are not representative of the country as a whole.”
It was Conservative administrations that integrated us further into Europe: Single European Act (Thatcher) and the Maastricht Treaty (Major). I reckon it will be a Tory (or Tory/Lib) government that takes us into the euro.
Reply: Masstricht at least got us the opt out from the crucial element of it. Labour did more to give away our birthright with Nice, Amsterdam, Lisbon, the end of the opt out on employment law, and common borders.
October 5, 2011
>> EU partners have no interest in damaging UK trade.
Yes they have no explicit interest, but it is implicit in their own national interest. Because they have some power over the UK it is not just of academic interest but an actuality.
>> The single market is not about centralizing government.
No it is not JUST about centralizing Government, but it has historically centralized Government, the plans that it has announced have been to centralize more Government. As they said in Forest Gump – stupid is as stpid does.
>> To be an EU friend or foe is entirely a British decision,
So unless we agree we are foes? Is that what you are saying. A churlish division. More passive aggressive comments.
>> Just like the decision to apply for membership in the past or a possible decision to explore a future, more independent relationship with the EU.
By your logic not applying for membership. Why has the EU not gone to War with Norway for not asking for membership. Your logic is fascile.
>> Many EU members would like Britain to join them in striving to complete the single market.
So you think the single market is incomplete? In other words you are looking for more integration. A few sentences ago you said the EU didn’t want more integration. Interesting you use the word “many” and not “all” – perhaps some are hostile as you suggested by your use of the word foe.
>> Eurozone membership is not required for that.
A true single market requires harmonized taxes and financial regulations which can only come from a central bank and central treasury. Which means fiscal union. So a complete single market is a centralized state.
>> The financial transaction tax, a matter of fairness, is not directed against the UK.
80% of financial taxes come from the UK. It sounds very unfair to me. “fair” is has polymorphic semantics – its means different things in different contexts. So obviously your context is somewhat self centered.
>> To portray it as targeting the UK would be misleading rhetoric.
As I just said 80% of financial transaction takes place in London. So its not misleading.
>> In Summary
1) You passive aggressive – accusing people of being foes if they disagree
2) You are contradictory – you want to centralize then you don’t
3) You are unfair – 80% of tax paid by one country
3 not very good character traits.
October 5, 2011
@javelin:
* Like any EU member, Britain also holds some power over other members. When the UK opposes financial regulations it is also not with the intent to damage other countries.
* The history of EU centralisation is a short one. Future emphasis on decentralization would be quite possible and neither needs to conflict with either single market or integration.
* Even in this digital era any shade between friend or foe is possible. The point is that this is really up to the UK itself. Do we get anti-EU hostility or whinging from Sweden or Denmark, both not part of the eurozone? I wouldn’t think so. It’s their decision to be constructive partners without hostility.
* I don’t understand your conclusion about Norway and how you deduce this from my statement. Norway (and Switzerland) decided not to become EU members, Greenland decided to leave, which goes to demonstrate that the EU is a voluntary union.
* The single market is indeed still incomplete. British and Dutch prime-ministers were going to do something about it. Here’s a quote from the British press dd. 25-1-2011: “The mechanism the two prime ministers want to use is the EU’s services directive, a liberalising measure that allows professionals to offer their services anywhere in the EU. The directive’s introduction has been stalled by the French but it is seen as an important element in completing the single market.”
* Of course Britain would require compensation for the financial transaction tax, or it cold levy this F.T.T. for its own national use. The UK already levies a financial transaction tax on shares transactions, called stamp duty. If ever the EU were to completely prohibit any cannabis, this wouldn’t imply targeting the Netherlands, only imply targeting cannabis.
* I’m continually working on my character traits. Don’t lose hope! 🙂
October 5, 2011
@Mr Redwood: No laws apart from enforcing that goods from one country can be offered for sale in other countries? How about some rules or laws to protect a level playing field? Don’t we sink to a very low common denominator without such rules? Would we theoretically allow sweatshops out-competing countries with proper worker protection? For me the values in the Rhinelandic and Scandinavian socio-economic models deserve some defending against the harsher aspects of Anglosaxon capitalism.
Reply: There is no need for labour laws at EU level, as the cfaring democracies of western Europe would impose their own.
October 5, 2011
There is not much need for labour laws at any level really – beyond normal contract enforcement. If there are plenty of jobs people can get another job if they feel exploited.
October 5, 2011
For the first time since he became Conservative party leader I sensed yesterday that Cameron is a very worried man. Part of the problem at the moment is that no political leader is going to tell the truth (if they ever were so inclined) about what is actually about to be done until the actions have been taken. In the meantime, uncertainty, fear and speculation thrive. For example, I saw on the internet that Germany is printing Deutsche Marks and will leave the Euro. If true, no one in authority will comment on this until the deed is done. This government has not used its first year as effectively as it should have and I have little confidence that they are prepared to stand up to the EU as they are already talking in defeatist tones.
October 5, 2011
Early press reports suggest Boris was on your side with regard to the EU at a fringe meeting yesterday (give people a vote) later reports suggest he now backs Dave.
This sort of so called Party loyalty is not loyalty at all, it is toading.
I see from press reports in the telegraph today, they suggest that Conservative MP DR Sarah Wollaston, MP for Totnes, has alledged that so many Mp’s are under the influence of drink when they go through the lobby to vote, that a few do not have a clue what they are actually voting for, they just obey Party Whips instructions.
Whilst I do not have a clue as to the truth or not of the reported allegations, I can certainly believe that many MP’s follow blindly the instructions from their Whips, and simply act as lobby fodder for their Party Leader.
I am convinced that until the whipping structure of Parliament is curtailed, then we will never get a true vote on Europe.
I understand that due to the 100,000 strong petition it is possible a debate will be held in parliament about our membership of the EU, but if the MP’s are whipped, then it is a complete waste of time. What we need is a FREE VOTE in a supposidly FREE COUNTRY.
Many times on this blog I have suggested that MP’s should only be allowed to vote on any proposal if they have been in attendance for the entire debate. Just turning up and voting on something, when you have not heard the arguments (for and against) is arrogant an hardly democratic, apart from that, it is an insult to those who have taken an active part in the arguments.
John, I admire your tenacity in sticking to your guns. keep up the pressure in whatver way you think best, to get us out of this foreign control nightmare as soon as possible.
October 5, 2011
You’re mistaken. The petition to leave the EU only has 34,524 signatures, so at present no debate is required.
Reply One is likely as it is a matter for decision by the Backbench business committee
October 5, 2011
uanime5
If I am wrong, then I beg your forgivness.
Will try to do better next time.
October 6, 2011
I agree.
MPs should not be under the influence when they debate or vote. It’s not much tolerated in any other workplace nowadays. I’d be summarily dismissed for it regardless of whether or not I was undertaking safety critical work.
Close the Commons bars.
October 6, 2011
Electro-Kevin: “Close the Commons bars.”
Or remove the alcohol subsidy and expose the ‘Parliamentarians’ to the same drinking environment the rest of us live with.
And make the smoking ban apply to the Parliamentary estate too.
Reply: there is a smoking ban in Parliament
October 6, 2011
JR: “there is a smoking ban in Parliament”
Good. Two questions if you don’t mind.
1. How does the price of a pint or a gin and tonic compare to a London high street pub.
2. With out naming names, have you seen any MP smoke in the Parliamentary bars? If so, who would be expected to deal with the matter, the Sargent at arms or some other bod?
Thanks for the correction, btw.
Reply: I don’t use the bars so have no idea what a gin and tonic costs. I go there to work. No I have not seen MPs breaking the rules – I am sure peer pressure and media sniping would soon stop anyone trying it. MPs live in a goldfish bowl all the time, with the media watching.
October 5, 2011
We are coming ever closer to the “End Game” where Euroland States decide that their Banks are too Big to Fail” and jump in together. Whether any of these actions are illegal and against Treaties already signed by the States, time will tell. The stress tests on these Banks will of course, prove to be a farce and they may be forced to separate “Casino Banking” from the Retail Customer business. However, Euroland, according to most major international Economists, will need a “Bail OUt Fund” in the region of $3 Trillion dollars. They are all miles from that, in terms of how much Germany will guarantee… Not long to wait now, I agree with Zorro above. The UK should strike now and renegotiate the EU Treaty.
October 5, 2011
What I cannot get my head around is the notion that a market can only be achieved by laws, notably only achieved by having the ‘benevolent’ hand of Brussels behind it.
October 5, 2011
I heartily agree with John Redwood’s blog and would go further.
The EC has accounts which have never been signed off as kosher and is riddled with waste and fraud.
This needs to be rooted out and the finances of the EC put on a sound and honest basis.
At the same time we and the EC need to quadruple the sizes of our export salesforces and increase trade with South America,countries in Africa growing faster than China(Botswana and Ghana spring to mind),plus those countries in the Far East which are outside of China.
Currently UK growth is non existent and the EC,despite recent German resurgence has not created a single nett new job in 25 years and is creating mass unemployment amongst the young.
Europe with the assistance of China and additional oil/wealth from newly liberated North African countries can and must solve its own problems and not rely on the UK taxpayer(80% of whom who have bank accounts have less than £500 gbp in them-Source :GE Money).
Europe to regurgitate the old Saatchi and Saatchi slogan that the Conservatives once used,is not working and until it starts to do so George Osborne should stop all overseas aid and concentrate on four things:
1)Deficit reduction
2)Reorganising public services so that they are efficient and affordable even if that means ditching “localism”,the “Big Society” and other meaningless uncosted initiatives based on volunteering and do goodery which create diseconomies of scale and allow the conditions to persist for local authority and civil service overmanning.
Stopping the so called “Barnett Formula”,the teaching of Welsh(this should be be replaced by Mandarin and other useful languages in which it is possible to export goods) and the assumption that Adult Social Care recipients in care homes and council houses can go on being subsidised as they are now.
To reduce this last cost robots should be used in care homes as already happens in Japan and the really costly cases should be shipped out to India (who would do a deal with the UK)where they can be cared for at a fraction of the cost.
The council houses thus freed up could then be reallocated to UK families
3)Improving our “top line” through putting exporting and language teaching on a war footing so that we can sell our way out of trouble.
4)Reducing taxes so that we can become competitive and attractive to wealthy inward investors capable of creating large numbers of nett new jobs
Reply: Spare a thought for granny – exporting the elderly is a heartless idea that will not catch on.
October 5, 2011
There is no tradition in the UK for children to look after the elderly although my sister and I looked after my stepfather for three years when he had Alzheimers.
Currently,Adult Social Care recipients,primarily woman over the age of 65 cost local authorities (County Councils,Unitary Authorities,City Councils and Mid County Authorities)50% of their budgets leaving the remainder to cover the costs of all other services.
This figure will get worse as we now have the most obese woman in Western Europe and a burgeoning number of dementia sufferers due to earlier pot smoking during misspent youth,living under aircraft flight paths(antimony in aircraft fuel,cooking with aluminium saucepans,paracetemol and poor diet).
It can cost £1000 gbp a week to keep one of these people and if they are a typical C1,C2,D or E, that means the rest of us have to pay.
In the 1950,s and 1960,s excess population was sold under Harold MacMillan to the Australian Government for £2,695 gbp a head under the assisted migration scheme.
What I am proposing is essentially the same except that these people who are now economically inactive,would be cared for in a warm climate at a fraction of the UK costs of care.
In our present position of massive deficit we need to increase our income and reduce costs as does the rest of Europe.
This is no time for sentimental nonsense unless we are talking about people who were of the World War 2 generation to whom we owe a lifelong duty of care.
October 6, 2011
You’ve not met Electro-Kevin Senior, John.
October 5, 2011
When is a stability mechanism not a stability mechanism?
One answer could be “When it’s a bankruptcy mechanism”, but that isn’t how this German politician sees it.
http://www.dw-world.de/dw/article/0,,15435758,00.html
“German Economics Minister Philipp Rösler is to push for a plan for the orderly bankruptcy of highly leveraged eurozone countries, according to a letter obtained by the Frankfurter Allgemeine Zeitung (FAZ) newspaper.
The key points of the plan are to be incorporated into a draft treaty on the European Stability Mechanism (ESM) – the permanent eurozone financial aid program which is supposed to succeed the temporary European Financial Stability Facility.”
To recap, the intra-eurozone Treaty establishing the European Stability Mechanism:
http://www.consilium.europa.eu/media/1216793/esm%20treaty%20en.pdf
is being erected on the new legal base in the EU treaties which would be created by the radical EU treaty change quietly agreed on March 25th through European Council Decision 2011/199/EU:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:091:0001:0002:EN:PDF
That EU treaty change would insert this new paragraph into Article 136 TFEU in the EU treaties:
“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”
If Rösler believes that the permitted “stability mechanism” to “safeguard the stability of the euro area” could and should include a bankruptcy mechanism, a plan for the orderly bankruptcy of a eurozone country, then what else could that “stability mechanism” eventually include?
How about a Financial Transaction Tax? Could a Financial Transaction Tax also be represented as part of the “stability mechanism” to “safeguard the stability of the euro area”?
If Germany and France decided that it did, and so it could be imposed just on the eurozone through an intra-eurozone treaty, a treaty made just between the eurozone states, then what the UK government do about that?
The UK would not be a party to that intra-eurozone treaty, would have no say over its contents and would have no veto to exercise or threaten to exercise, so what could the UK government do about it?
October 5, 2011
The Government should give real support to companies trying to trade outside Europe. It should be providing incentives to companies with the objective of reducing our trade within Europe and “having too many eggs in one basket”.
China, which is perhaps a similar size to Europe, doesn’t see its future in terms of internal trading, it wants to sell its goods worldwide. Why does Europe think that it can survive by just trading internally within Europe?
October 5, 2011
I agree that the trade with the EU should not be a reason to hold back on developing trade with the rest of the world. Ireland and the UK share many of the characteristics you mention. US investment is similar in both countries and this shows the potential for growth of trade outside the eurozone. Even in these dire economic circumstances FDI Intelligence ( part of FT Ltd) have reported that US investment in Ireland rose 49% in 2010.
It is true that the EU rules and regulations are a drag but the UK still has control of the rates of corporation and income taxes. Northern Ireland receives large capital transfers from the exchequer and they are now asking to be allowed to lower their corporation tax closer to the Irish 12.5% rate. If this was permitted they would attract some inward investment and lessen the need for support from the treasury (US firms invested $18 billion in Ireland during H1 2011-FDI Intelligence report).
I think the Northern Ireland case for reducing corporation tax is a strong one and also an exceptional one . Northern Ireland has the added attraction over its southern neighbour of not being in the Euro! The Irish stance shows that it is possible to be in the EU while still retaining sovereignty over your tax regime. I cannot think of a more conservative value than to reduce corporate tax in NI which could be virtually implemented without EU permission being required.
October 5, 2011
(1) I suppose if the Foreign Secretary is saying that the UK is at least several, and perhaps many, years away from regaining powers from Europe, then there might be hope! (He did state Colonel Q was on the way to Venezuala, so hopefully the Foreign Secretary is putting up a smokescreen / just wrong).
(2) “David Cameron is right that the way out of a debt crisis is to borrow less, not more.”
And what is the signal that is sent out to Jo’ public on this?
If you have saved then your money will be looted from you, if you have wrecklessly borrowed then you will be rewarded.
If you rent from a private landlord you will pay increasing rental, if you are saving for a deposit your savings will be diminished by inflation but if you are in a local authority house you will have an increased discount to purchase.
etc. It is futile making the list. The PM may have some appropriate words, but in summary anyone of whatever age or wealth who has tried to “do the right thing”, is seen as the soft touch to tap up, this is essentially an erosion of the country’s ‘integrity capital’. Silly and dangerous.
October 5, 2011
So correct.
Bailout the banks. Kick banking reform into the long grass. Do not entertain MMT theory or positive money and retain a system full of vested interests. Ditto the EU.
No real control over public spending , if they attempted the inside interest of the public managers would cull the frontline?
Allow global forces to compete on local labour, versus free capital to move freely around the world. But when Capital makes a malinvestment, bail the boys out?
Banking is an industry but unlike the miners before very much more powerful.
Competition like taxes only seem to really hit the little people in the real world. The little people in the private and public sector have had enough.
October 5, 2011
There is a delicate balance of “Greed and Fear” spreading across Euroland. The Germans and French know they are deep in the Gu.. Gu.. over funding these, soon to be Zombie EU Banks.
Our Government should balance the European Political Fear of losing the UK as a critical Standard and Poors AAA Member, at this time, against the greed of grabbing ever more Billions in guarrantees, from the British Voter Purse. If EVER there was a time to strike for a major EU Treaty Re- Negotiation, it is right now Mr Cameron/Coalition.
Do you not agree Mr Redwood?
October 5, 2011
The last poll I saw was conducted by YouGov in July and asked, ‘If there was a referendum on Britain’s membership of the European Union, how would you vote?’ 50% said they would vote to leave, 33% would vote to stay, while the remainder would abstain or didn’t know.
Because of this, I’m curious to know where your 29% figure comes from. Based on the YouGov poll, it seems as though the EU has already succeeded in radicalising the UK against them.
Reply It was last week-end’s poll which offered people more than a simple In/Out
October 5, 2011
Mr.Redwood, I know you make the ‘buying BMW’s’ in slight jest but it does pose the question would the likes of BMW have bought Rolls Royce and VW Bentley were they for sale all over again if those german companies thought we were now having second thoughts on EU ties? In the 90’s I was Chairman of a BMW owned company in the UK but with operations throughout the world, their choice of the UK then was very much because they saw the UK as an eventual full ‘partner’. Times may have changed and now we need to ensure Chinese and Indian money such as Tata etc. continues as in global terms they have only just got started with what they might do here. My own view is that any further EU involvement for us will be to the detriment of far east potential investment as they see Brussels as ‘meddling and interfering’ far to much for business to flourish against the likes of Korea, Brasil etc.
Reply Germans will invest here if they can make money here.
October 5, 2011
Geoff not Hoons: “would the likes of BMW have bought Rolls Royce”
BMW actually has bought Rolls Royce.
The car manufacturer not the engineering firm.
October 5, 2011
I have a very low expectation that a Cameron Government will have either the courage or the will to take the necessary action to protect our interests and enhance our opportunities.
Given the plummet in the Conservatives poll ratings before the election, at the point when Cameron’s “Cast iron guarantee” melted; no one should be in any doubt that a Conservative victory in 2015 is totally dependent on the Government listening to its own people on Europe, rather than fawning to the Eurocrats and selling us down the river once again.
Be in no doubt; the public will fully support a Government which decides what is necessary regarding re-negotiation, and makes it plain that Europe can either accept it, or face the prospect of a referendum and the possibility that the UK will unilaterally leave the EU.
I am quite sure that there are other individual member states which would be happy to make their own arrangements with us, and that the EU would not survive our leaving.
October 5, 2011
Nick W
You are right, the first of the big three Party’s to promise to hold a referendum on Europe will get a big surge in support.
If Cameron leaves/delays it until the next election, then he will be lost, as people will simply say he is just saying that to get re-elected, and why did he not do it in the last five years when he had the opportunity when in power.
October 6, 2011
I was swung on those guarantees at the last minute, Nick.
18 months in now.
At this rate I definitely won’t be voting for a DC government again.
October 5, 2011
This is a very important article and it is greatly appreciated by quite a number of those, including me, that have contributed thus far. However, I am very mindful of the points made by Denis and having gone into the e-mail addresses given, to me the proposals are full of holes for those that are not in the euro, to fall in to.
This is a vast Treaty change, and as far as all 27 Countries in the EU is concerned and especially those outside the EURO, this changes should be debated in full in the UK Parliament and the promised vote on any Treaty change-and I take very seriously what Denis Cooper has written-should take place.
October 5, 2011
Anybody wondering whether Mr Cameron is entitled to the title Conservative Leader might like to ponder Rodney Atkinson’s accurate asssesment of his record on “conservative issues” thus far:
“Since Mr Cameron came into office he has: reneged on his “cast iron” referendum guarantee on membership of the EU, allowed non Tories to help select Tory candidates, invited socialists to speak at the Tory conference, alienated the Tory working class, committed hundreds of billions to the man made climate change myth, accepted Marxist political correctness, surrendered critical powers to the EU, rejected grammar schools, failed to heed warnings about Andy Coulson, permitted homosexual proseletising in schools, refused to attend CBI and NFU conferences, disastrously gave Lib Dems a platform in the election, ignored classical liberal and Conservative think tanks, and chose deliberately to lose the general election rather than win 30-40 additional seats by accommodating the UKIP line!
October 5, 2011
European Union is about centralised control of Europe – and more importantly; centralised control of the money supply. Hence the EURO.
I agree with the sentiment:
“David Cameron is right that the way out of a debt crisis is to borrow less, not more. The UK public sector has to speed its work in this area as well.”
David Cameron’s recent word changes to his speech regarding paying off our personal debts such as credit card and store card loans, sounds great and is the correct thing to do in “Lollipop Land”, but unfortunately, our money supply depends on more and more people borrowing money inorder to sustain the existing money supply.
When someone pays off a loan, the money is extinguished from the money supply as it was created using Fractional Reserve Lending. If we did what David Cameron said, the money supply would shrink, there would be less money in the economy and more and more people would go bankrupt.
If we had 100 % Banking System, David Cameron’s speech we be excellent advice – unfortunately; either he does not understand how money is created and destroyed or he believes nobody else understands how money is created and destroyed.
Good draft speech by David Cameron, but the advice would wreck the economy.
This is how perverse our Banking System is – inorder to get out of debt, someone else has to get into debt. We can therefore, never escape perpetual debt.
October 5, 2011
The EU’s idea of equality of opportunity has for too long been that if one has it’s hand tied behind its back then everyone should have their hands tied behind their backs – rather than the simpler solution of untying it in the first place!
For too long we have been members of this silly club and time we got out.
We could make a start by refusing the pay any more money into a company that cannot even gets its own books passed through the auditor and should long ago have been declared bankrupt.
It has proven itself both bankrupt in ideas as well as money.
October 5, 2011
On Sunday I imagine it looked like those of use streaming past the Central were all trying to prevent public sector cuts John.
I know some of the speeches were of the vein that ‘cuts must be stopped’.
But down there among the protesters the level of insight in the conversation between the protesters was much deeper. I mean – for goodness sake – it’s the ATL out there John…. Yes I know there were 20 anarchists in hoodies and the nutty extremist too but there aren’t that many of them. They just happen to have some loud and easily heard chants unlike the rest of us.
I and others were there because we have concerns about specific aspects of the way which cuts are being done. We can see that the consequences will not be as the government says they will be financially. Not all cuts will lead to savings – some will lead rapidly to much greater costs and we are standing up and shouting about this because no-one is listening through the proper consultative routes. It is important analysis is done with the experts who can map the consequences of changes so that efficient and effective cuts can be made.
We are the experts who understand the economic infrastructure of the public sector and the consequences of perturbations. We’re not fluent or practised in speaking rapidly about these issues because they haven’t been top of the agenda for a while.
But if you want to achieve rapid and effective public sector cuts it’s essential planners properly engage with those of us who have the potential to be able so properly map out the consequences of changes and don’t just label us all as being ‘anti-cuts’ and ‘irresponsible’. We are neither. We are people who are far more intelligent and experienced in understanding the public sector that this government’s ‘experts’ and we are angry because we are being deliberately and systematically ignored and pro-actively negatively labelled.
October 5, 2011
The entire finance sector produces less than 0.1% of the UK’s GDP. It isn’t a major part of this country and never will be.
Reply Nonsense
October 5, 2011
uanime5 states that …’the entire finance sector produces less than 0.1% of the UK’s GDP etc etc…’
The UK GDP is roughly 1.45 trillion pounds so by uanime5’s calculations, the whole of the entire finance sector produces 1.45 billion pounds…..
Utter nonsense… but it fits in nicely with your macro economic policy!
zorro
October 5, 2011
“Fear at last stalks Whitehall on EU issues.”
Perhaps the solution is staring us in the face .
Convince Whitehall that the EU is not in Whitehall’s interests and wait for the politicians to follow suit .
October 5, 2011
Germany refusing to sell us more BMWs Course, not. We can like you just buy Jags or Freelanders instead. Jags are better looking anyway (ducks and waist for row).
October 5, 2011
Written in 1992 …
http://www.lrb.co.uk/v14/n19/wynne-godley/maastricht-and-all-that
“European countries are at present locked into a severe recession. As things stand, particularly as the economies of the USA and Japan are also faltering, it is very unclear when any significant recovery will take place. The political implications of this are becoming frightening. Yet the interdependence of the European economies is already so great that no individual country, with the theoretical exception of Germany, feels able to pursue expansionary policies on its own, because any country that did try to expand on its own would soon encounter a balance-of-payments constraint. The present situation is screaming aloud for co-ordinated reflation, but there exist neither the institutions nor an agreed framework of thought which will bring about this obviously desirable result. It should be frankly recognised that if the depression really were to take a serious turn for the worse – for instance, if the unemployment rate went back permanently to the 20-25 per cent characteristic of the Thirties – individual countries would sooner or later exercise their sovereign right to declare the entire movement towards integration a disaster and resort to exchange controls and protection – a siege economy if you will. This would amount to a re-run of the inter-war period.”
October 5, 2011
John, Any chance of your opinion of David Camerons speech. In confidence of course.
BobE
October 5, 2011
Mr Redwood, please can you ask Mr Cameron why, he’s keeping his promise for foreign aid yet not keeping his promises to us the British people. He broke them. We are not a world purse, and we should not be doing this. Why should my kids pay, via taxes, pay for Pakistani kids education, it’s not our responsiblity it’s their own governments. I was going to vote Tory, but with this statement, NO. I’m afraid it will be UKIP>
October 5, 2011
Barbara Stevens: “he’s keeping his promise for foreign aid yet not keeping his promises to us the British people.”
David Cameron doesn’t work for the British people.
He works for the Intergovernmental organisations.
October 5, 2011
JR: “That is why I made my modest proposal that in this crisis the UK allows Euroland to press on to single economic government in return for having an opt out from anything we do not like, past or future.”
I’d be more sympathetic to that modest proposal if I don’t know that under the present EU treaties Euroland is destined to continue its expansion across the EU; indeed it is legally required to expand until the UK and Demark are the only two EU member states left which are not part of it, and if the euro-federalists get their way it will expand until every EU member state including the UK is part of it.
Hence my own modest proposal that in exchange for the change to Article 136 TFEU that (some) countries in Euroland want, Cameron should have demanded a series of related and perfectly reasonable treaty changes to protect our long term national interests.
Such as:
1. The creation of a mechanism for a country to make an orderly withdrawal from the euro if it so chooses – installing a fire exit, to extend Hague’s “burning building” analogy.
2. The 8 EU member states which are not yet in the euro, but which were forced to commit themselves to eventually join it as a requirement of their accession to the EU, to be relieved of that legal obligation so that they have a completely free choice whether or not to adopt the euro.
3. The EU must cease to impose that legal requirement on new member states, so they too would have a completely free choice in the matter.
4. Strengthening of the UK’s “opt-out” protocol, so that it was written into the EU treaties that the EU could not allow the UK to join the euro unless that decision had been approved by a national referendum.
5. EU member states that are not in the euro to regain some control over the entry of additional countries – at present it’s the eurozone states alone which make those decisions, under Article 140 TFEU, even though as we’ve seen the consequences of de-stabilisation of the eurozone severely affect the non-euro countries.
6. To help prevent any repetition of its disgraceful abuse in the future, Article 122 TFEU to be returned from qualified majority voting to unanimous decision making, so that the UK and every other country will once again have the right to veto its activation.
October 6, 2011
Sounds good to me.
October 5, 2011
If the EU makes a dash for centralised political and economic integration, the laws emanating from Brussels could well be totally inappropriate for the UK being outside of the Eurozone. We may need to do this to stay competitive.
I would have liked Mr Cameron to have stated that his government would renegotiate our relationship with the EU, as the 17 states look to become one.
A bit of a disappointing speech I thought.
October 5, 2011
http://www.thisismoney.co.uk/money/news/article-1616085/Economy-watch-What-Britain.html
Take a look at the graph of government debt “ring of fire” at the foot of this article.
October 5, 2011
Good post, John.
I suspect that future historians will see the whole eu project as a reckless experiment.
Taking several countries into a single currency without proper governance is typical of this recklessness.
What is quite scary is the ever widening gap between the moderate politics of the public and the extremist views of pro-eu politicians.
As you say, we are being radicalised and that is some achievement for such a mild-mannered People as the British.
October 5, 2011
Considering the implications of different scenarios for the future of the EU should have been at the forefront of thinking at the Treasury, FCO (including embassies in EU countries and other major foreign capitals), and most other government departments as soon as the government took office. Ministers, Parliament and civil servants alike are 17 months behind the curve if they’re only just working out the implications now.
The UK is a substantial net importer from the EU – something that is likely to get worse as our oil production and exports decline, and our manufacturing industry shuts down in response to over-regulation and excessive uncompetitive energy costs. We have little to fear from the EU so far as a trade war is concerned, should they be foolish enough to start one.
Instead, we seem to be planning to shoot ourselves in the foot with further bouts of competitive devaluation orchestrated via more QE, and the maintenance of uncompetitive taxes and gilded regulations.
October 5, 2011
Most of the British people understand this. The Tory party members certainly do so why do our political class keep insisting the EU is a good thing?
Would someone in the Tory party explain this to Cameron or better still remove him from office!
October 5, 2011
I watched Jonathan Dimbleby’s programme on Sunday about Brazil,200 million people in a country with everything,world’s third largest Aircraft maker,a bridge in Manaus over the Amazon nearly 4 Kms long costing $450 million,what did the last such length bridge cost to build here ?,probably in th£billions WHY?.An iron ore exporting terminal with a storage capacity of ONE MILLION tons working 24/365 loading ships going to mainly China.The economy GREW 7% last year AND their language PORTUGUESE .Portugal the former colonial power in a marriage forced by the likes of Barrosso to the EU to Portugal’s deficit,if the Portuguese were properly thinking of themselves they would be married to Brazil instead of the EU ,Brazil WILL be a bigger economy than all the Eu countries except
Germany very soon and WILL overtake Germany not much later.In American parlance
it is a NO BRAINER. Likewise this country as I have said before just 3 former colonies
Canada/Australia/New Zealand with about 65 million people which WILL be nearly 90
million by 2030, look at their GDP’s and their prospects I know which I would think is a better bet to trade with .And what about the entire remainder of South and Central America
and it’s Spanish speakers where Spain is concerned.
October 5, 2011
So Cameron insists he is a Conservative who wants a Conservative majority at the next election? He is clearly lying again because he is pro EU and he knows there’s no chance of a majority if UKIP is still around. They denied you a majority in 2010 and will deny you again in 2015 unless you grant the people a referendum. Cameron seems to think that saying he will never join the Euro as long as he’s PM is enough. Utter nonsense. The people would never vote for it anyway. Roll on the next election and let’s get this abysmal anti-British government out and Cameron to resign as leader. We need a true Tory leader.
October 6, 2011
Like John Redwood.
October 5, 2011
Even if there were a referendum I wouldn’t trust the BBC nor the political establishment (nor the EU itself) not to interfere in the run-up to voting. The sceptics would barely get a look in.
We cannot underestimate how far these people will go to protect the EU and I doubt that we’ll see the end of the Euro either – whatever it costs us.
December 9, 2011
Clealry each of us is going to regard the other as complete crackers, in perpatuity.
You just don’t seem to get Europe do you? I am starting to wonder if beliefs about Europe are genetic and unchangable things are that bad. I sinply cannot reason with people like you.