The Bank of England misleads on the EU

Now I have had chance to read the lengthy Bank of England Report on EU membership I have been struck by the lack of evidence to support its one positive conclusion for staying in the EU. The Bank claims that membership has helped the “dynamism” of the UK economy.

They do see the need to define and prove this vague statement. They do so by saying the EU has made the UK a much more open economy, and this can be seen in the growth of trade resulting from this greater openness. Yet when you turn to the Annex to see the figures, you find in Annex 3 that the UK’s openness as measured by increased trade has advanced less quickly than that of the OECD as a whole. It is true they only give the figures for the period 1999-2014, not our whole membership. However, the last 15 years is the most relevant, as it is only in the last fifteen years that the EU has become so much more integrated and intrusive. Their figures show both trade in services and trade in goods increasing more rapidly for the OECD as a whole than for the UK.

The Bank of England is more in line with reality with the negatives they cite. They are right that the “UK economy was materially affected by the euro-area crisis” , which could of course recur. They are also right that “the impact of EU membership on financial stability is more challenging”.

It is difficult to argue that the single market increases our dynamism, when it weighs business down with dear energy, complex product rules, high VAT rates, an expensive overarching bureaucracy at EU and national level to implement it all, and a failure to negotiate free trade deals with much of the rest of the world. The EU seems to favour a limited number of large companies in each sector at the expense of challengers and small businesses.

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79 Comments

  1. matthu
    Posted November 7, 2015 at 6:56 am | Permalink

    Daily Mail comment [names have been redacted to protect sensibilities]:

    J— R—— possesses the most brilliant mind in Parliament. The former Cabinet minister, a fellow of All Souls College, Oxford, predicted with uncanny accuracy the consequences of the European single currency when the calamitous project was mooted.

    Tomorrow night, on BBC Radio 4’s Analysis, Mr Redwood will deliver his latest verdict on the euro, setting out the conditions needed for it to work. It will make essential listening.

    Yet when he invited British supporters of the euro to come on his programme, they refused. Tony Blair, Peter Mandelson, Nick Clegg, Vince Cable and others all turned down the BBC’s invitations.

    I understand that the Labour Party would not put up a single person to discuss the euro. This is worse than collective cowardice. It is symbolic of a wider problem in the pro-European camp.

    Its spokespeople constantly spread scare stories, but they will not engage in genuine public debate about the future of the European project, of which the single currency is the most important part.

    • Denis Cooper
      Posted November 7, 2015 at 12:12 pm | Permalink

      I’m not sure that the single currency is the most important part of the European project, that seems questionable when the project includes a single army.

      Reply So far!

    • forthurst
      Posted November 7, 2015 at 12:57 pm | Permalink

      Last item on Peter Oborne’s Saturday Nov 7th column: http://www.dailymail.co.uk/debate/article-3307979/PETER-OBORNE-finally-learn-truth-Britain-torture.html

      Currencies and Countries with John Redwood. Analysis: Sunday Nov 8th on Radio 4 at 9.30 PM

      http://www.bbc.co.uk/programmes/b06mcfdp

      • Chris
        Posted November 7, 2015 at 6:13 pm | Permalink

        Thank you, forthurst, for alerting us to Peter Oborne’s article, something I had missed. The situation described is quite shocking, although it is what many believed at the time. Oborne highlights, quite correctly, that the US system for getting to the truth and bringing key individuals to account has been far more vigorous than ours. In fact our government “action” seem to have been not only totally unsatisfactory, but also obstructive. What a disgrace.

        • Denis Cooper
          Posted November 8, 2015 at 7:21 pm | Permalink

          Yes, well, during the protracted witch mania the German system “for getting to the truth and bringing key individuals to account” was “far more vigorous than ours” – the German law positively required that every person suspected of witchcraft must be tortured, as the only way to get to the truth, while in England the use of torture was (normally) illegal and evidence obtained by torture was (normally) inadmissible at a trial – and the awful consequence was that in Germany there were cases where entire populations of towns were revealed as witches and burned, while in England the death toll of completely innocent people was very much lower.

          I’m not absolutely opposed to the use of torture to try to extract vital information, but obviously it can have major drawbacks. It has been claimed that during the Second World War British intelligence never employed torture, but then interrogators had the threat of trial and the death penalty at their disposal – which is no longer the case thanks to the Labour government signing us up to Protocol No 13 to the European Convention on Human Rights, prohibiting the death penalty under all circumstances, even in time of war.

    • waramess
      Posted November 7, 2015 at 2:54 pm | Permalink

      They will not engage in serious debate because their reasons for wanting to remain in the Euro at any cost is because they fear change of any sort or in some cases their reasons for wanting to stay in are shameful (continued employment and influence for retired politicians).

      It is regrettable the “stay in” crowd are not willing to enunciate their fears more clearly because it is only then we will be able to see how unreasonable these fears might be.

      The best PM we never had? Probably, although I for one would say the same for Farage, so maybe our host will not be too keen on my observation.

      • Chris
        Posted November 7, 2015 at 6:02 pm | Permalink

        Waramess, I would indeed agree about Nigel Farage.

    • Anonymous
      Posted November 7, 2015 at 10:50 pm | Permalink

      The EU referendum will come down to screaming out the basics, I’m afraid.

      THREE MILLION JOBS WILL BE LOST !

      Vs

      TEN MILLION IMMIGRANTS WILL COME IN !

      I’m afraid there will be no refined debate on this issue however unpalatable it may seem. Either way the outcome will be won on hysteria.

      For the sake of our country we must win the OUT vote at all cost.

      • Denis Cooper
        Posted November 8, 2015 at 9:06 am | Permalink

        Well, the Leave side have no clear plans for what would happen after we had left the EU, a great weakness in their case; while the Stay side do have much plans for what would happen if we stayed in the EU, but are taking care not to draw them to the attention of the wider public.

        Because they know that if the electorate properly understood where the EU is heading then they would stand little chance of winning.

        • libertarian
          Posted November 8, 2015 at 6:32 pm | Permalink

          Dennis

          I’ve heard this nonsense line spouted “No plan once we leave” for ages. Its totally meaningless. As no one knows the future we could just as legitimately say no one knows what would happen if we stayed in !!!!

          We were a soveriegn country ( for a 1,000 years) along with the 165 other countries including the 22 European countries that are also NOT in the EU. So I guess we will carry on with the 82% of GDP as internal trade, 9% of world trade and 9% of buying & selling stuff to the EU. Those UK citizens resident in EU countries can apply for a visa to remain and those EU citizens resident here can do the same

          • Denis Cooper
            Posted November 8, 2015 at 7:38 pm | Permalink

            Unfortunately your personal view and my fairly similar personal view are both pretty irrelevant, unless we can convince about 15 million undecided people to agree with us and vote to leave.

          • libertarian
            Posted November 9, 2015 at 12:26 pm | Permalink

            Dennis

            Totally agree & thats why the answer to the question is No one knows what will happen if we stay in.

        • APL
          Posted November 9, 2015 at 2:27 pm | Permalink

          Denis Cooper: “Well, the Leave side have no clear plans for what would happen after we had left the EU”

          Just the very thing that Richard North has been working on, the process of leaving, Brexit, including as an intermediary step, ‘The Norway option’, which our host doesn’t approve of because Norway is in a worse condition that the UK.

          Reply Nonsense, not what I said. Norway is rich and successful outside the EU, helped by her abundant oil and gas. The UK can however do better than the Norway agreement with the EU, which includes making payments to the EU and accepting free movement of peoples. I see no reason for the UK to accept either of those features.

          • APL
            Posted November 9, 2015 at 10:34 pm | Permalink

            JR: “The UK can however do better than the Norway agreement with the EU, which includes making payments to the EU and accepting free movement of peoples.”

            And what has Mr Cameron done that give the EU any idea that he want anything resembling a better agreement with the EU.

            How would Mr Cameron’s negotiations be better than the ‘associate membership’ that is already on the table, requiring no renegotiation at all by Cameron?

          • petermartin2001
            Posted November 13, 2015 at 11:56 pm | Permalink

            ” Norway is rich and successful outside the EU, helped by her abundant oil and gas.”

            When Britain first had “abundant oil and gas” unemployment sky rocketed as Mrs Thatcher’s government used the money from oil to keep the pound high and force manufacturing industry into decline. We were told that was because we now had a “petro-currency”.

            Naively, prior to that we’d all just assumed that the proceeds of oil and gas would be used to reinvigorate manufacturing industry not pay for its decline.

            So if Norway can do that now, why couldn’t Britain then? Or was that all the unions’ fault?

  2. Lifelogic
    Posted November 7, 2015 at 7:04 am | Permalink

    Indeed well put.

    The bank just has the usual lazy group think views like the BBC, Whitehall and most of the Tory leadership. Evidence, reason and logic have nothing to do with it.

    Rather like global warming where the huge increase in Antarctic ice over the recent years and lack of any warming is hardly even reported. It does not fit with their bogus science/religion so it is ignored.

    • Lifelogic
      Posted November 7, 2015 at 10:00 am | Permalink

      Why all this fuss about how many women are on the new passport design, why do we need a new design?

      Surely we are reverting to the old slightly larger, deep blue, British Passport soon.

      • fedupsoutherner
        Posted November 7, 2015 at 8:45 pm | Permalink

        I do hope so Lifelogic

    • alan jutson
      Posted November 7, 2015 at 12:45 pm | Permalink

      I thought the Bank of England was supposed to be independent, not a spokesman for politicians or the Government.

      Why is the BOE even making comment in the first place !

      • Lifelogic
        Posted November 7, 2015 at 7:36 pm | Permalink

        The bank seem to have daft, unscientific, opinions on the huge exaggeration of global warming & impending catastrophe too.

      • miami.mode
        Posted November 7, 2015 at 9:39 pm | Permalink

        alan

        BoE independent? I think not. You only need ask who pays his wages.

        I believe that, quite rightly, the Chancellor reserves the right to change any BoE decision.

        • Denis Cooper
          Posted November 8, 2015 at 9:10 am | Permalink

          Except “in relation to monetary policy”, under Section 10 of the Bank of England Act 1998, unless Parliament has agreed to the activation of reserve powers under Section 19.

          http://www.legislation.gov.uk/ukpga/1998/11/contents

        • alan jutson
          Posted November 8, 2015 at 11:59 am | Permalink

          miami.mode

          I agree, independent in name only, another con by a certain Mr Brown.

  3. Mike Stallard
    Posted November 7, 2015 at 7:41 am | Permalink

    Mr Cameron’s theory seems to be that we ought to stay in and reform Europe. That we all know is completely impossible.
    Associate Membership means that we are just that – all hopes of reform gone as the EU trundles forward into “More Europe” under the thumb of the Commission.
    We need to get out and arrange a trade agreement like that of South Korea or Australia. Then we can take our place at the inter nation bodies, like Norway does at the moment and fix the international standards for trade.

    • Lifelogic
      Posted November 7, 2015 at 8:12 am | Permalink

      Indeed, how can the UK possibly reform the EU when the UK has so few votes their and the other members are nearly always pulling the wrong direction. A direction of ever more central control, ever more central regulation and ever more taxation and ever more government.

    • Denis Cooper
      Posted November 7, 2015 at 12:07 pm | Permalink

      But we already have a reformed EU; it seems to be forgotten that Merkel reformed it with her Reform Treaty, later renamed the Lisbon Treaty.

  4. Oldtimer
    Posted November 7, 2015 at 8:01 am | Permalink

    Did he comment on future regulation and taxation of the City? The recent Presidents Report was quite explicit about the need for all EU members to be subject to the same financial regulation and transaction taxes. This is huge threat to a significant part of the UK economy and its own taxable capacity.

  5. Ian wragg
    Posted November 7, 2015 at 8:02 am | Permalink

    Carney is Gideon mate. He changes the story on interest rates with the frequency of changing his underwear. The man is totally discredited as is his report.
    He should keep out of politics and stick to what he knows which evidently isn’t much

    I see his bid to rule Canada is down the pan.

    • John C.
      Posted November 7, 2015 at 5:57 pm | Permalink

      I lay no claim to financial expertise, but this particular governor inspires no confidence in me at all.
      He was trumpeted upon his arrival in a way that suggested he needed to be boosted, and his wavering pronouncements so far have been distinctly uninspiring. He seems to state the obvious long after everyone has commented on it and moved on.
      Why on earth did we have to scour North America for someone to lead the Bank of England? Do we produce no-one of our own who has the knowledge or ability?

      • Iain Gill
        Posted November 8, 2015 at 4:25 am | Permalink

        Why? Because George Osborne is his mate. Meritocracy it isn’t.

  6. Ex-expat Colin
    Posted November 7, 2015 at 8:16 am | Permalink

    A Customs Union with VI’s at the centre and circling round the edges. Those VI’s in Brussels will ensure the UK stays in and assure the inability of the UK to prosper. Rather, get out of its huge debt and not get lumbered with more.

    The BoE should really shut up because they have no business awkwardly biassing the debate. I suspect too many people in UK believe that whatever the BoE utters must be right?

    How can it be dynamic with an unelected group forcing the way of the union from behind closed doors? Forcing it/us into ever greater debt.

    Hannan 2012:

    Again and again, we have been forced to sign less liberal accords than we would have negotiated bilaterally in order to accommodate some protectionist interest on the Continent.

    Farage yesterday:

    I was struck on my last trip to Washington, D.C. just how little American politicians know about the EU. I’m keen to go back in the new year to get some more alternative voices. A UK voting to Remain will before long cease to be able to be the USA’s greatest ally. We cannot allow Obama and now the Bank of America Merrill Lynch to skew the UK debate.

  7. formula57
    Posted November 7, 2015 at 8:24 am | Permalink

    Thank you for this illuminating analysis of the Bank’s report. The Bank seems to add credence to Mr Juncker’s apparent view that Britain does not need the EU.

  8. fedupsoutherner
    Posted November 7, 2015 at 8:47 am | Permalink

    Well done John for highlighting this problem. There are many areas where the Bank of England is not transparent. Carney was recently going on about ‘global warming’ and the effects on our economy. What he failed to mention was the fact of how much we are paying for the folly of wind farms. I have been looking at a list complied by Dr John Constable from Renewable Energy Foundation and he compiled a list of 66 wind farms in the UK stating how much they had been paid over a period of a year to switch off.
    The totals are as follows:

    £157,587,794; total MWh = 1,859,714 and average price per MWh = £124. Data last updated : 04-Nov-15.

    (Individual wind farms receiving multiple millions left out ed)
    I think people will agree that Mark Carney or someone in the Bank needs to tell us more, particularly as these funds get taken from all our bills. No wonder we are losing our steels industries and other industries dependent on high energy usage. I wonder what the reals costs are to the economy when you consider the numbers of people in fuel poverty and debt and their health this winter?

    • Lifelogic
      Posted November 7, 2015 at 7:41 pm | Permalink

      Indeed it is not the largely non materialising “global warming” but the global warming (exaggeration of) religion that is damaging the economy hugely.

  9. Glenn Vaughan
    Posted November 7, 2015 at 8:49 am | Permalink

    I raised this issue concerning the Governor’s comments re. our “dynamic economy” on this website several days ago.

    I hope that you will forward a copy of your observations on this report to the Bank of England directly.

  10. Iain Moore
    Posted November 7, 2015 at 9:13 am | Permalink

    Carney had to say something positive about the EU, after all his sponsors, Cameron and Osborne, are going to stick their political careers on it.

    I suppose he was hoping that by throwing the odd crumb of comfort in their direction wouldn’t damage his own reputation. Fortunately for him there isn’t that much scrutiny of claims in favour of the EU this far out from the referendum, so he might have got away with it. But for those of us who do take an interest, trying to suggest an institutionally sclerotic EU is good for competitiveness is completely incoherent.

  11. Richard1
    Posted November 7, 2015 at 9:30 am | Permalink

    Wouldn’t it be fair to say that the EEC/EC did assist in making the UK a more open and dynamic economy up until the advent of the euro, when the EU became more intrusive and the balance of policy in the EU seemed to more in a more sclerotic and corporatist direction? Membership of the EEC did assist eg the Thatcher govt in saying we have to open up markets to competition.

    It’s possible if we had got out in 1975 we would still have had the Thatcher revolution and would now have a more dynamic and lower tax economy but we can never know – it might have gone the other way with socialism getting more entrenched.

    • Anonymous
      Posted November 7, 2015 at 10:59 pm | Permalink

      Look at the ANZAC nations to see what we would have been like.

    • Denis Cooper
      Posted November 8, 2015 at 9:14 am | Permalink

      If the British people vote for socialism then they should get socialism.

      • Richard1
        Posted November 8, 2015 at 10:42 pm | Permalink

        Yes but if they do I’d prefer to find a way of limiting the damage.

        • Denis Cooper
          Posted November 9, 2015 at 1:21 pm | Permalink

          It’s like calling in a foreign army to overthrow the government.

  12. Gary
    Posted November 7, 2015 at 9:42 am | Permalink

    The problem when GDP growth contains govt spending (debt) as the current major component, then countries with the most sovereign debt growth will have the most GDP growth. That probably explains the OECD GDP growth being higher than the EU. Eg. The USA govt debt has doubled over the period to £18T. The UK govt debt has increased by 50% since 2010. There is a lot of GDP “growth” in that.

  13. Anonymous
    Posted November 7, 2015 at 10:06 am | Permalink

    The open economy that included the EU was the same open economy that sold off countless British brands so that their revenues now go to other countries.

    Now we hear “We need a march of the makers to create a dynamic economy.” yet we have offloaded so many established makers for fast bucks; as often predicted our workers lost their jobs – some of them took hundreds of years to build and we cannot replace them.

    We obsess about GDP and ignore balance of payments. GDP makes prostitution and the immigration of poor and uneducated people look like good things to have.

    The open economy made us incapable of building our own power stations or catch our own fish.

    The open economy finally means that we have gone beyond selling the silver and now our very homes are up for sale to foreign investors, this just to keep the holed economy afloat; this is why every policy is geared towards keeping house prices high.

    The last thing this country can afford is affordable housing and so we impoverish our young and beggar their futures to keep the old to the standard they have become accustomed.

    It is only a matter of time before the open economy delivers to us its final death blow. If the Bank of England didn’t fear this then it would have raised interest rates.

    • Anonymous
      Posted November 7, 2015 at 11:02 pm | Permalink

      By ‘the final death blow’ I mean a complete devaluation of our currency.

  14. Mark B
    Posted November 7, 2015 at 10:12 am | Permalink

    Good morning.

    First let me say that my post from yesterday did not make it on to the site. Lets hope for better today.

    The EEC/EC/EU has been an enormous benefit to both France and Germany. They have decided that it is perhaps better to share the ownership (through the EU) of Europe via their industries than conquer it for themselves. The two old continental rivals have become partners with France now playing a junior role.

    The UK and others have opened our markets to these and other countries and have suffered as a result. We have lost our fishing grounds (the richest in Europe) and the profits from it. We are losing our manufacturing ability and these means to supply energy to it and the rest of the UK economy. We no longer can make decisions at a higher level than the EU, as the EU now speaks for us. We have allowed our elected representatives to give away powers that are not theirs.

    As for the report. Many, I include myself in this, so thank you Mr. Redwood MP sir for taking the time, will not have read the report. But I bet the BBC and others will tell a gullible public that the Bank of England no less supports membership.

    We are not out of the woods, not by a long way.

  15. Tad Davison
    Posted November 7, 2015 at 10:30 am | Permalink

    Good points John, and it takes a politician of the very highest standing to enlighten us. For that, I am sure we are all very grateful or we might have missed the document’s significance.

    I wonder if someone like the BBC’s Andrew Neil will have the guts to put these very pertinent questions to the lovers of all things EU?

    Wouldn’t it be great if a good interviewer put them to people like Sir Richard Branson or to Roland Rudd, or maybe to Laura Sandys. But will that happen?

    And I was always under the rather naïve delusion that it was the job of broadcasters, and investigative and political journalists in particular, to hold our political representatives and public servants to account.

    Well BBC, here’s your chance to earn your licence fee! Don’t flunk it!

    Tad Davison

    Cambridge

    • Anonymous
      Posted November 7, 2015 at 11:05 pm | Permalink

      Relatively few people read John Redwood, I’m afraid. Those that do are ‘stale, pale, males’

      (Why is that racist and sexist expression allowed in progressive Britain ?)

      • Tad Davison
        Posted November 8, 2015 at 9:11 am | Permalink

        I doubt that Anon. People who matter cannot afford to overlook the posts on this blog, and that includes anyone who regards themselves as a serious journalist. I know for a fact politicians read it. This blog is regarded as a vital source of feedback.

        Tad

  16. Alan Wheatley
    Posted November 7, 2015 at 10:31 am | Permalink

    I think the UK government(s) too “favour a limited number of large companies in each sector at the expense of challengers and small businesses”.

    A good example is BDUK (Broadband Delivery UK set up under Labour and continued by the coalition and Conservative governments). It started out requiring competitive tenders from many companies bidding for its money. It managed to achieve a monopoly for BT! And it seems in large part that was because it was easier for BDUK to deal with one big company placed by an earlier government in an advantageous position.

    I think the Civil Service ain’t what it used to be, but maybe they are not helped by being required to do too much with too little resources.

    • A different Simon
      Posted November 7, 2015 at 6:21 pm | Permalink

      Good points Alan ,

      I agree the EU and HM Govt’s do prefer big corporations – even though this flies in the face of supposed competition and anti-monopoly laws .

      Some of the features of TTIP are worrying to0 ; all agreed in secret by unelected EU commissioners , their counterparts in Washington and Big Corporate .

      I had not realised for example that a U.S. GMO food manufacturer could sue the UK or EU for loss of earnings for preventing it from starting to sell it’s products here .

      This is completely different from oil and gas explorers which have already spent tens of millions exploring licenses issued by the French govt (i.e. critically a contract already exists) suing because the govt suddenly banned hydraulic fracturing .

      Our life and our laws are increasingly being handed down to us by big corporations . How can politicians agree to this with the obvious ramifications for sovereignty and democracy ?

      • Chris
        Posted November 7, 2015 at 10:58 pm | Permalink

        Sadly, Simon, all part of the plan envisaged by The New World Order, I believe. Very alarming indeed. Once I would have dismissed this sort of thing under the conspiracy theory label, but not now. There is obviously a huge power base and great wealth behind these changes that are being driven through our societies. They have not happened by chance.

  17. Leslie Singleton
    Posted November 7, 2015 at 10:48 am | Permalink

    Dear John—I have been brooding on your comment the other day that “Eastern bloc countries replaced the rouble quite easily” with its obvious implication about possible breakup (down?) of the EZ (I do not say it is the least bit likely.)

    It seems to me that there is a profound difference between the Soviet Union and the EZ, viz Russia and the rouble were on any basis going to subsist after the bloc broke away and Russia would and very much did want to keep trading with said bloc if only to keep them solidly within their sphere of influence so Russia had every reason to assist in the transition. One such way of assisting was by encouraging, certainly allowing, the breakaways to continue to use the rouble transitionally and at pleasure whereas there would be no mileage for anybody in the EZ, as a mere currency zone that would soon cease to exist by reason of the very process we are discussing, attempting to keep a transitional and fast-literally-disappearing Euro in place. There is no ongoing substance, no Mother Duck, at the centre of the EZ.

    Changing gear, there is a close parallel with the SNP’s wanting to continue to use the pound. Again, strange that in particular the Scottish papers did not latch on to the comparison and milk it.

    • Denis Cooper
      Posted November 8, 2015 at 9:25 am | Permalink

      Germany is the substance at the centre of the eurozone, the Mother Duck.

      In April 1938 Douglas Reed wrote near the end of his book “Insanity Fair”:

      “The small states, seeing the abyss of betrayal yawning before them, are flying like frightened chicklets to the protecting wings of Mother Germany.”

      and that is what has been happening now, with the connivance, or at least the passive toleration, of the UK government.

      Take Germany out of the eurozone, as some have suggested, and the rest of it would disintegrate in short order.

      • Leslie Singleton
        Posted November 8, 2015 at 5:56 pm | Permalink

        Dear Denis–The discussion was about how easy it would be for EZ countries to go back to their pre-existing currencies–I thought (and think) it would be a Herculean task but JR demurred pointing out that the Soviet bloc broke away in to separate currencies easily enough. My last post resulted.

        Germany may indeed be the Mother Duck whilst the EZ is ISQ but she would be of little help to the others in a return to old currencies because she herself would, like the others, be one of the deserters. No comparison with an ongoing Mother Duck like Russia allowing and encouraging transitional use of the Rouble. I continue of opinion that it would be extremely difficult to reverse the EZ–so difficult that it is hard to imagine it happening at least not by voluntary agreement–it would take a cataclysm of some kind.

        • Denis Cooper
          Posted November 8, 2015 at 7:42 pm | Permalink

          Support for euro membership is still strong in Germany, not least because of the Germans’ guilt over what their forefathers did.

          • Leslie Singleton
            Posted November 8, 2015 at 9:24 pm | Permalink

            Dear Denis–No argument on that, indeed I have said a few times here that the EU and therefore the Euro will collapse when Germany’s guilt wears off but not until then. The point of the above however was that even if the mood music changes and countries ever wanted to go back it would be extremely difficult.

  18. Bert Young
    Posted November 7, 2015 at 11:12 am | Permalink

    The Bank of England has every right to state its views on our membership with the EU ; whether it is right or wrong in its views is another matter . No-one wants Carney to be a toady to David Cameron ( who could ever steep so low ! ) , The Governor should always be a stand alone individual who can be relied upon for his wisdom and longer term judgement – politicos are far to inclined to shorter term measures and the quest for popularity .

    I take on board the view of the Bank that Brexit may have the result of a run on the £ , but this may have certain advantages as far as our exports are concerned . We have been facing the challenge of cheap Chinese products driving our production abroad to them ; with a much lower £ , this might rejuvenate some of our lost industry . At the same time I also believe that the Euro is baseless and could well suffer a run on the currency at the same time as the £ – where would that leave us ?

    Apart from any economic argument is our loss of sovereignty ; this is the only matter of real concern and I want it restored asap .

    • Anonymous
      Posted November 7, 2015 at 11:14 pm | Permalink

      Part of China’s success in our market is the idiocy of ignoring their human rights and environmental abuses whilst driving our own power generation and industry into the ground.

      I ask yet again.

      What is the point of making our industry emissions-and-human-rights-compliant and then, after all the effort, closing it down because foreign ones are – surprise surprise- cheaper ?

      On this and many issues our ruling elite is completey INSANE.

  19. Bob
    Posted November 7, 2015 at 11:29 am | Permalink

    How many of the following countries pay £350 million per week and opened their borders to trade with the EU?

    EU Imports (£billions)
    – China – 280
    – Russia – 207
    – UK – 204
    – USA – 196
    – Switzerland- 56
    – Japan – 56
    – India – 37
    – Brazill – 33

  20. Atlas
    Posted November 7, 2015 at 11:43 am | Permalink

    Am I being too dismissive when I think, upon reading your analysis, that the B-of-E is just another paid lackey to the EU pipedream?

  21. libertarian
    Posted November 7, 2015 at 11:48 am | Permalink

    Indeed John

    The EU, the BoE , the UK Conservative Government & the CBI are ALL anti small business & try as hard as possible to make running a small or medium sized business difficult, expensive and over burdened with bureaucracy, petty rules and huge costs ie autoenrolment which is of course the 2nd set of payments business now makes for pension provision , the blurted out arbitary living wage announcement, VAT regulations etc etc.

  22. CHRISTOPHER HOUSTON
    Posted November 7, 2015 at 12:00 pm | Permalink

    President of the European Central Bank Mario Draghi’s term of office ends 2019-2020. Governor of the Bank of England, Mark Carney’s term of office ends 2017-2018 unless he extends it closer to the full eight-year term from his originally desired five.
    The US Fed would lose face if it ever appointed a Canadian as Head. Might even be against US law.
    So Mr Carney says his only probable future employer creates “dynamism”. Figures.

    • Denis Cooper
      Posted November 8, 2015 at 9:32 am | Permalink

      I feel sure that the ECB President has to be a national of a eurozone country, if not by law then because the eurozone governments would insist on it.

  23. Denis Cooper
    Posted November 7, 2015 at 12:05 pm | Permalink

    Surely you must realise, JR, that “read the lengthy Bank of England Report on EU membership” is just what you’re NOT supposed to do, the idea is that you only take away the headline message that leaving the EU would be a bad thing.

    Same with all the other reports of dire warnings from various banks, think-tanks etc, it’s the headline message that counts, not whether there’s any substance to their claims.

    We do however have a counter to this propaganda, that these are often the same people who gave dire warnings of the consequences if we didn’t join the euro, plus in many cases they failed to give any dire warnings about the impending financial crash.

    • Anonymous
      Posted November 7, 2015 at 5:13 pm | Permalink

      Denis – That we have any economic recovery at all is because of our divergence from the EU rather than our convergence with it – ie not being in the Euro.

      Did the Bank of England forget this ?

  24. lojolondon
    Posted November 7, 2015 at 12:40 pm | Permalink

    I agree with John – it reads as a very reluctant headline, with flimsy proof. I surmise that the report is possibly the output of a person who has been instructed what the result of the report should read, (perhaps the opposite of their private conclusions) so they did it be-grudgingly and poorly.

  25. Terry
    Posted November 7, 2015 at 12:48 pm | Permalink

    When the graphs given in the article link below are studied, it is quite clear just how badly the EU has been performing economically around the globe. Such evidence destroys the BoE contention the the EU has actually improved our “dynamism”. Whatever that means, here. As JR has pointed out, quite the contrary to the BoE belief, the EU has stifled our economic growth with endless Red tape and over bloated bureaucracy. For proof, just look where we could have been when free trading with the Commonwealth nations. I would have to ask, “Has the BoE been infiltrated or bribed by EU agents”? I can think of no other reason for our Central Bank to succumb the the dictate of the EU. Wars were fought to guarantee our independence, yet, here we have a key UK organisation wishing to insult and to abandon those who died protecting this country from foreign rule. I find it disgusting and disgraceful.

    http://blogs.telegraph.co.uk/news/danielhannan/100163336/look-at-these-graphs-any-possible-argument-for-remaining-in-the-eu-has-been-blown-away/

  26. majorfrustration
    Posted November 7, 2015 at 1:11 pm | Permalink

    Am I correct in thinking that the BoE’s report was compiled by an acknowledged pro EU official. Independent indeed.

  27. forthurst
    Posted November 7, 2015 at 1:51 pm | Permalink

    The most dynamic period for our economy was immediately following our accession to the EU (CM) on Jan 1st 1973 when our economy was thrown open to six Continental countries that had been trading together since Jan 1st 1958. Most of our engineering industry rapidly declined to either close or be taken over by foreign competitors since it was simply not prepared in terms of either the quality of management, of Trade Union leadership or products or productivity to compete with any hope of success. This was the first but by no means the last of the miscalculations inflicted by Europhile political leaders from all the main parties which has so damaged our economy and our country. However, no industry experience a period of dynamism more than our fishing industry which, before accession being worth £3billion to our economy in present terms, was destroyed, a sacrificial lamb offered to the French for permission to subsidise their grossly inefficent agricultural industry in perpetuity.

    For those of us whose eyes tend to glaze over rapidly when confronted with a cliff face of almost fact free verbiage, there are schematics on pages 8,9 at the end of the management summary (Gideon and Mark Carney’s spin) which are useful; they demonstrate that the world outside the EU is most important to us for exports (56%) whereas we are most important to the EU for our imports (53%). (The figures for the Netherlands are skewed by Rotterdam which is a major transit hub for EU and non-EU goods.) In other words, the likelihood of the EU denying us free access to their market after Brexit is zilch.

    EU membership and the Bank of England October2015:

    http://www.bankofengland.co.uk/publications/Documents/speeches/2015/euboe211015.pdf

  28. MikeP
    Posted November 7, 2015 at 3:07 pm | Permalink

    I hope that, one way or another, your very reasonable challenges (but not least the OECD comparison) find their way to a couple of journalists’ questions at Carney’s next briefing. Personally I quite like the guy, though he should stay away from political hot potatoes unless he’s prepared to do better homework, as his guidance on interest rates is understandably changeable as the economy continues to stumble along in fits and starts. In a side note you have to laugh at media reporting about the China slowdown, every other country would be delighted with 7% growth but these journalists expect completely unrealistic exponential performance.

  29. waramess
    Posted November 7, 2015 at 3:18 pm | Permalink

    Merrill Lynch have said that the huge UK current account deficit the UK has would be a significant impairment to it’s financial stability if it leaves the EU.

    The point is, I think, that the markets believe in the face of a sudden and material decline in inward investments the Euro represents the UK’s get out of (into) jail free card.

    Whatever reason Merrill Lynch had, it is actually quite a sobering thought that this might be one of the UK’s biggest obstacles, and I for one would be very interested in our host’s comments.

    Reply I don’t agree it is worse if we leave. The only way we can continue to run a balance of payments deficit is if we attract capital inflows. As a range of overseas investors have made clear – e.g. Nissan/GM/Land Rover – they will carry on investing here if we exit.

  30. Vanessa
    Posted November 7, 2015 at 3:32 pm | Permalink

    JR – Your last sentence is why the EU is so hopeless on developing trade and allowing people to start up businesses of their own which could develop into the next Amazon or Google.

    And having hailed these big companies the EU then proceeds to snipe and criticise them for not paying enough tax despite their Directives allowing them to register in the country with the least corporation tax etc.

    Not a brilliant way to get the economy growing and its people made richer, but exactly the opposite. This is why we need to stop PAYING into this “little e-(small “e” deliberate)urope” and branch out on our own again.

    • Anonymous
      Posted November 7, 2015 at 11:22 pm | Permalink

      I wouldn’t mind being a little ‘e’ englander.

      This has so often been a pejorative term but my position is entirely decent. I would not have interfered in Iraq or Libya. I would have adjusted our economy to scale so that there were enough quality jobs and housing and services for a smaller and happier population.

      The elderly would have been better respected.

      Forget the march of the makers. We are assured of a march of the robots and driverless cars.

      So what are we to do with the new army of Uber taxi drivers ?

  31. Rita Webb (Mrs)
    Posted November 7, 2015 at 3:36 pm | Permalink

    JR what are your views on the U.S.-EU Free Trade Agreement (TTIP) particularly the Investor-State Dispute Settlement (ISDS) mechanism?

  32. NickW
    Posted November 7, 2015 at 3:37 pm | Permalink

    What should concern us is that the EU’s regulatory machinery has been captured by Industry lobbyists, thus ensuring that regulation is tailored to suit industry and not consumers.
    Unfortunately, the Industries that the regulation is tailored to are not British; they are German and French.

    Car exhaust emissions and testing are a case in point.

    James Dyson wrote recently that the EU vacumn cleaner power consumption regulations were specifically tailored to a non British manufacturer who had ensured that their cleaners used far less electricity when the dust bag was empty, than when it was full; hence the EU opting for regulatory testing on machines with an empty dust bag, thereby completely misleading consumers. Needless to say, Dyson technology is disadvantaged by this approach.

    EU Governance which deliberately disadvantages UK Industry has not and will not benefit the UK Corporate sector. We need to be free of it.

    • Anonymous
      Posted November 7, 2015 at 11:25 pm | Permalink

      Doubtless German vacuum cleaners will pass these tests.

  33. margaret
    Posted November 7, 2015 at 8:35 pm | Permalink

    Stream lining is dangerous anywhere. The domino effect is made considerably easier when everything is the same. An obvious thing to say one might think , yet the consequences of a trigger and a line made ready to fall are innumerable.

  34. Original Richard
    Posted November 7, 2015 at 10:39 pm | Permalink

    The Bank of England must have had a hard time searching for anything positive to say about the UK’s membership of the EU if the best word they could find was “dynamism”.

    It is important to note all the words they have felt unable to use – such as “prosperity”.

    • Alexis
      Posted November 9, 2015 at 12:11 am | Permalink

      I would like to have seen the word ‘dynamism’ defined in context.

      It is such a woolly, hurrah-word to have chosen, yet it really stood out.

      It leaves the reader asking ‘where? What is dynamic, exactly? Might whatever-it-is have been more dynamic outside the EU?’

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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