Leave the EU to improve the balance of payments

The October figures for our balance of payments published last week were disappointing. Once again we ran a large deficit. Such deficits have to paid for by either selling UK assets to foreigners, or by borrowing from abroad. There are limits to how much of this a country can and should do.

I know advocates of staying in the EU want to keep us running a very large balance of payments deficit. They always say we need to run high levels of inward investment = which means we need to keep selling assets to foreigners. They want us to stay in on current terms to keep the trade at current levels, which of course means keeping our imports far higher than our exports to the rest of the EU. When it comes to EU/UK trade the UK is the customer and the rest of the EU is the supplier. That’s why some of us think we can get a better deal, and need a better deal.

Using the 2014 annual figures, if we left the EU we would immediately be £10 billion a year better off. In 2014 our transactions with the EU institutions required by our membership cost us a net £10 billion. That was money we had to send to them. That was money that cost us a loss of £ 10 billion on our balance of payments. All that contribution had to be funded by borrowing from abroad or selling more of our assets.

In 2014 the UK ran a current balance of payments deficit with the rest of the EU at the whopping level of £107 billion. Fortunately our trade with the rest of the world was in surplus, so that cut back the overall deficit a bit. £30 billion of that was our trade deficit in goods with Germany, who sells us twice as many goods by value as we sell her. We also run large goods deficits with Italy, Spain and Belgium amongst others.

I will in future posts look at how an independent UK could narrow its balance of payments deficit. But first we need to get people to understand that far from helping the UK, the EU relationship itself is a major cause of the big balance of payments deficit we run. Coming out would immediately make a very positive contribution to correcting it. We have run a large balance of payments deficit with the rest of the EU for most of the time we have been in it, as the EEC/EU liberalised trade in the things Germany is good at more than the things we are good at.

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  1. Mark B
    Posted December 14, 2015 at 6:33 am | Permalink

    Good morning.

    What about all the fines and other ‘under the counter’ contributions we have to make ? Lets begin by talking about that bill from the EU for the sin of actually being successful. You know, the one that CMD would not pay that amount on that day but, as later emerged, would pay smaller amounts over time. ie the same.

    Then there are food costs. Being able to buy cheaper food will lower prices, especially for the poor.

    But leaving the EU is not just about saving money, it is about being able to live the lives by the rules our elected politicans make and the international treaties they sign for and on our behalf. It is about being a sovereign nation again. We have lost so much.

    Posted December 14, 2015 at 6:36 am | Permalink

    Your book JR: “Public Enterprise in Crisis: the Future of Nationalised Industries ” first published in 1980. You recommended it to myself and others some time ago. It’s still waiting in a queue, typical English, of books for me to read . But I’ve dived into bits of it . Very well written by the way.

    On page 50 you wrote of the coal industry in the 1930s being “…a rather naked and unrefined capitalism…” and that in 1946 ” There was no blueprint available” as to how the Labour Party would actually take over the coal industry’s running.

    My mind took me off at a tangent and an age-old mystery resurfaced. Why, in your opinion, was it that senior players in the Labour Party, with their core voters never even using terms such as capitalism and very many never using or even having any knowledge of a thing called “socialism ” ,were adamant to “achieve socialism” when they had the opportunity as individuals to speak matter-of-factly with other MPs of a different persuasion and most certainly had the resources to go to Russia and see for themselves just what socialism meant? Why did they not proceed perhaps parallel with say the policies and mind-set of the US Democratic Party? Even now the Labour Party believes the Democrats to be lefties when in fact the Republicans are the only ones standing up for US coalminers and their industry.

    Many young people including myself at the time without worldly experience found it easy to dream the un-experienced dream of something called Socialism. But a few sorties to the Eastern Bloc by way of holidays and such… soon knocked the red out of ones flag.

    Again, so why did the Manny Shinwells in such watch-tower positions in the Labour Party lead their followers up the genuinely terribly dark and cruel alley of nationalisation? How could they possibly have thought they were doing right?

    Not being personal, but how can Corbynistas in today’s Parliament who can and do speak one to one with Chinese, Russian, American politicians and business people, continue to pump the lie out about Socialism? It hardly seems fair to waste young people’s lives chanting daft slogans at brick walls. How junior doctors with obviously great academic achievements, and in the company socially and at work with whole philosophy books of people can march down a street chanting and reciting mindless leftist mantras is an massive psychological disincentive never to fall foul of psychosomatic illnesses. Young doctors are scary.

    • David Edwards
      Posted December 14, 2015 at 5:59 pm | Permalink

      I’ve wondered about that too. If such terms apply, my tentative conclusion is that the ‘right’ represents slow and organic evolvement of society and the ‘left’ constitutes rapid or step changes to it, even if, as you say I think correctly, leftist experiments don’t quite seem to work. But, if people on the one hand hanker after the status quo as I think they do, or at least control over their destiny and the right provides the status quo and gives that control back to people, why are people drawn on the other hand to the left, if nothing more than to express dissatisfaction with their lives or a dreamy hope that things could be better. My opinion is that things can be better, but only slowly, over the course of time, with organic not artificial changes. But who knows??

    • stred
      Posted December 15, 2015 at 11:41 am | Permalink

      Jeremy Corbyn reminds me of an old commie friend, who I used to go for walks with and discuss things over dinner. He has always been very well meaning, principled and consistent. He even has a beard and dresses like Corbeau. Once, I was on a walk with him and another of his friends, who was originally Canadian and had been living with his commie wife here for a long time. We started to talk about perestroika and I mentioned that Sky TV has an amusing advert on in which the old Soviet leaders were discussing how good it was, as the missiles rolled past on Red Square. It was surprising that they took offence to my remark and his friend explained that Stalin had actually done a lot of good for the Soviet people. Bearing in mind that the elimination of the middle class was one of the successes, I was glad I had brought a large walking pole and reinforced boots. The odd thing is that Corbyn and my freinds were middle class too. The blue collar tradesmen that are my friends in London would laugh at them. We continued the walk, avoiding politics.

  3. Gary
    Posted December 14, 2015 at 7:13 am | Permalink

    we backed the wrong horse. Short sighted all-in on financialization, including trading massively leveraged IOUs and bonds including mortgage bonds instead of producing value added goods for a possible 7 billion consumer global market. And as the 30 year driver of this, the monotonic march of lower rates has hit the buffers we are stuffed. We only have ourselves to blame.

  4. MIke Stallard
    Posted December 14, 2015 at 7:14 am | Permalink

    We need, it is true to leave the cage of Europe, where we run a deficit, and link up with Australia, the Subcontinent, Asia, New Zealand, South Africa, lots of Africa, the West Indies, North America and, yes, South America too.
    But are you saying that we stop trading with Europe? If we did, it is true, we would lose our deficit, but isn’t this cutting off our nose to spite our face? I love my dish washer and my lawnmower – both by Bosch – for instance.
    What we really need is a trading arrangement with the EU – nothing more than that. And Associate Membership (by whatever name Mr Cameron is going to call it) is not what we want as it is but a step away from losing all our historic rights, our prosperity and our principles.

    • Leslie Singleton
      Posted December 14, 2015 at 6:03 pm | Permalink

      Dear Mike–Bosch lawnmower? Incroyable! You have clearly never, not so much used, as owned a Honda. Advertisements are usually drivel and I am not even sure that this was an advertisement but it is true as has been said that it is very difficult to persuade a man to buy another make of lawnmower once he has owned a Honda–and I started off very prejudiced against.

  5. Antisthenes
    Posted December 14, 2015 at 7:23 am | Permalink

    It is bad enough that we give the EU 10 billion especially as it is an institution and a level of government that is totally necessary. It then uses some of that money to force us to implement policies that harms our competitiveness so reducing our ability to export and increases our imports as other countries are no so hampered so can produce goods and services cheaper than we can.

    EU are now telling us that they are going to implement with vigour the new climate deal regardless of the fact it is going to make us even more uncompetitive. Also regardless of the fact that other countries who export to us are certainly not going to. So will exacerbate our balance of payment problem even more.

    The mad men of Brussels are turning Europe into a basket case. They drag us into crisis after crisis none of which are ever satisfactorily dealt with. We need to leave now before it is too late.

    • Mark
      Posted December 14, 2015 at 10:53 am | Permalink

      Given its non-binding nature, I suspect that the only countries that will end up trying to implement the climate deal will be those of the EU, which will turn the “should”s and “requests” into “shall”s and “requires” as it transposes it into EU law.

      A thought has occurred to me: the EU is a party to the COP21 agreement in its own right, so we could end up in the farcical situation that we withdraw from the agreement as a country, yet are bound to it via the EU.

    • Lifelogic
      Posted December 14, 2015 at 11:04 am | Permalink


      Indeed except of course – the mad men of Brussels have already turned Europe into a complete basket case. Aided by Heath, Major, Bliar, Cameron, the absurd PC lefty BBC propaganda outfit plus Clegg and the “wrong on every issue but civil liberties” Libdims.

      • Jerry
        Posted December 14, 2015 at 8:45 pm | Permalink

        @Lifelogic; “Aided by Heath, Major, Bliar, Cameron, the absurd PC lefty BBC propaganda outfit plus Clegg and the [..//..] Libdims.”

        You forgot to mention the one person who a/. caused the UK political left to fall in love with anything and everything that was the Delors Commission and now the EU, b/. more or less single handed started the political snowball rolling (that has become the avalanche that is COP21) back in the 1980s as far as the current pollution/climate-change clamour, one Margaret Thatcher!

        This country hasn’t had a credible government for at least 45 years, it hasn’t had a sensible government for something like at least 57 years…

        • Edward2
          Posted December 14, 2015 at 11:19 pm | Permalink

          This is now a constant and desperate left wing propaganda story.
          The rise of the climate warming movement came from the UN and a well known Canadian billionaire who helped the funding of sympathetic research projects.
          To try to claim that Lady Thatcher was involved is ridiculous

          • Jerry
            Posted December 15, 2015 at 7:56 am | Permalink

            @Edwards; Historical facts suggest you wrong Edward again, some on the right really do not like the truth when it comes to their beloved Mrs T and her place in the formulation of current climate and EU policies etc. Mrs T was well into issues such as “acid rain” [1] that were the pre-cursor to the current climate clamour, long before the UN or the left picked up on it.

            [1] I seem to recall that it was a part of the dash for gas/oil argument, away from coal burning and all its sulphur emission

            Reply Mrs Thatcher would probably have opposed the dear energy dirigisme of current EU policy. As she is now no longer with us discussing what she might or might not have thought about modern problems is a fruitless task.

          • Lifelogic
            Posted December 15, 2015 at 9:04 am | Permalink

            Well she did fall for the state sector/BBC group lunacy rather at one point. She did also sign the hugely damaging Single European Act. which replaces many unanimous decision-making processes with Qualified Majority Voting. She also made the mathematically challenged John Major chancellor and even let him take the UK into the ERM. Furthermore she also rather failed to cut the state sector down and benefit culture down to a sensible size.

            Infallible she was not just better than most of the others.

            Reply I advised her not to sign away the powers we did in the Single European Act. She was forced to enter the ERM by a combination of Foreign Secretary and Chancellor, and knew it to be hazardous or wrong.

          • Jerry
            Posted December 15, 2015 at 2:28 pm | Permalink

            @JR reply; “As [Mrs Thatcher] is now no longer with us discussing what she might or might not have thought about modern problems is a fruitless task.”

            Indeed but my comments were about what she or anyone else did during the 1980s and the implications of those decisions, politicians are paid not to just make decisions for today but years if not decades into the future – should we desist in debating Wilson’s or Heaths political legacy too?…

            @JR reply; “She was forced to enter the ERM”

            No PM is ever forced to do anything his or her Ministers want done, because as Macmillan’s “Night of the long knives” shows any minister is only ever a phone call away from being sacked, always assuming that the PM is in control of their MPs/Lords/party!

  6. Antisthenes
    Posted December 14, 2015 at 7:25 am | Permalink

    “It is bad enough that we give the EU 10 billion especially as it is an institution and a level of government that is totally necessary”.

    Should read “It is bad enough that we give the EU 10 billion especially as it is an institution and a level of government that is totally unnecessary”.

  7. Denis Cooper
    Posted December 14, 2015 at 7:29 am | Permalink

    I’m afraid it will be very hard work convincing the voters that our balance of payments would actually improve if we left the EU, when so many, too many, of them believe the propaganda stories that it would be an unmitigated disaster in every way.

    • Lifelogic
      Posted December 14, 2015 at 7:07 pm | Permalink

      It will be hard with Cameron, all the Tory MPs except at best 100, the Libdims, probably Labour, the greens, the SNP, the BBC, the CBI, many in big business, the US president, much of the largely parasitic legal profession and most of the state sector are all pushing for in.

      True they make an entirely bogus argument as is very clear. But then so is the bogus catastrophic c02, runaway hell on Earth religion but many fell for that bogus drivel too.

    • Jerry
      Posted December 14, 2015 at 8:56 pm | Permalink

      @Denis Cooper; If those who want a Brexit keep emotions in check and out of the arguments I think you are very wrong to say that the average voter will not be able to understand the very strong arguments/benefits of leaving. What puts people off even considering the arguments of the Brexit camp0 are ‘over emotional’ suggestions of a “EUSSR” super-state and worse that all the UK’s problems have been and are still caused (mass-)migration. Most of not all our socio-economic problems are very much home grown, and many pre-date the single market EU, some even pre-date our entry into the EEC.

      • Denis Cooper
        Posted December 15, 2015 at 11:11 am | Permalink

        That’s right, Jerry, those who genuinely and whole-heartedly oppose the EU should stay out of the referendum campaign and leave it to those who at best are only half-hearted about it and at worst really support the EU.

        • Jerry
          Posted December 15, 2015 at 2:58 pm | Permalink

          @Denis Cooper; Those “who genuinely and whole-heartedly oppose the EU” do not need to use the scapegoats arguments that involve fear of the old Soviet block and its political system, nor the fear of mass-migration. The economic arguments alone are almost enough given the utter mess Euro-land is in, the ‘dream’ that was sold in 1975 and again in the early 1990s has turned into a vivid nightmare!

    • petermartin2001
      Posted December 18, 2015 at 10:21 pm | Permalink

      You could try showing them this:

      German Exports to UK: €79.2 billion
      German Imports from UK: €38.6 billion

      Google {Order of rank of Germany’s trading partners – Statistische}

      I’m in two minds as to whether this is a problem myself.

      On the one hand if Germany is supplying more stuff to us than we have to give back to them we are getting the better deal. On the other hand if the external deficit translates back into an internal Govt deficit which causes everyone to worry then it can be a problem.

  8. turbo terrier
    Posted December 14, 2015 at 8:08 am | Permalink

    Very good entry today John.

    I think that one of the problems with the public at large is that for years the big numbers that are spoken about when refering to our deficit have just got bigger and are not completely comprehendable to the man in the street. When I was starting out debts were spoken in millions now it is all about billions and trillions and this process has sort of created a brain dead society that it does not relate to their circumstances. Houses that were once in thousands are now in the millions, and the higher the personal debt rises the less significant the national debt and payments seems to become. A very high percentage of the UK population are in real debt and they live with it 24/7 so why should the country be any different?

    The 10 billion paid to Europe is from the bottom line and it must therefore be “earnt” and if it was not being paid out and invested in the country, it surely must be far more valuable due to the knock on effect in jobs and production for the benefit of the population.

    Then there is all the interest payments. Government departments, health trusts and all public bodies should be legally bound to show their monthly interest payments and then ministers and officials can be accountable for the amount of lost revenue going out of their budgets as interest payments is just dead money. There is still within the rank and file a “what the **** its not my money” But in reality it is.

    Here in dictatorship Scotland the Devolved Parliament are very clever in using the renewable energy scam to get more money into local authority circulation with all the “community benefits” being paid thanks to the over generous help of your government and the 50 million bill payers in the rest of the UK. Every pound paid out is one less for them to find which in the case up here relates to more being squandered on vain nationalistic projects.

    This country has got to get back to living in the real world and within its means. You cannot run sucessful business on debt alone. Yes we have to look after the less fortunate but the 10 billion paid out would go a long way to addressing some of the real problems that beset this country.

    The customer supplier chain is a two way street and as business have found for years not everybody clearly understands the process and this has to be addressed. the country has to cut out waste. If it don’t add value to the business don’t let it happen. How much is the delay in the third runway saga going to cost in real terms? In major decision making our Prime Minister is found to be wanting.

    All this jetting off around the EU what does the man not understand about the word no. There is no point in flogging the dead horse. Its over, know and understand when to leave the table and walk away. To stay results in more losses and debt. This is not rocket science. We cannot as a country carry on digging a bigger hole for ourselves. If the PM and those of his collegues that cannot understand that, then they should go and let people who do understand and can deliver stand up to the mark. How many times do you see struggling companies and sports clubs change the management and then become successful.

    In many areas of the way this country is being run and managed it is screaming out for change.

  9. Ian wragg
    Posted December 14, 2015 at 8:18 am | Permalink

    The large deficit is one of the reasons big business wants us to stay in
    The main utilities and manufacturing are owned by France and Germany. More and more businesses will be gobbled up until we are a quaint theme park.
    Btw I have been reading about EU policy on dredging which is largely banned
    The dredged material which for centuries has been returned to the land as an important fertiliser is now classed as controlled waste and subject to ruinous landfill tax making it uneconomic to dredge.
    Once again we have a natural disaster made worse by EU dictat which is largely ignored by the rest of Europe but gold plated by our EA.
    Why no mention of this John.

  10. bigneil
    Posted December 14, 2015 at 8:39 am | Permalink

    A big thumbs up from me John, and at the same time start removing ( with no appeals process), all those who have come here to abuse our welfare and make this island a dangerous place for the rest of us. The main sticking point will be a certain two-faced PM who wants his personal ego trip of a seat in Brussels as a reward for destroying England and the English.

    • DaveM
      Posted December 14, 2015 at 12:00 pm | Permalink

      Does the PM even have an ego?

      I would hope he has a bit of pride, because at the minute the elected leader of our country, the Queen’s representative, the mouthpiece of the UK, is being publicly humiliated by various EU personalities as well as being mocked daily for his impotence in the national press. It’s getting embarrassing now.

    • Jerry
      Posted December 14, 2015 at 9:05 pm | Permalink

      @bigneil; Very few people who you might wish to call “English” are actually truly English, https://en.wikipedia.org/wiki/Anglo-Saxons (for example) might be worth a read…

      • Edward2
        Posted December 14, 2015 at 11:21 pm | Permalink

        But if they come here a few years ago and were born in another nation are you claiming they are British now Jerry?

        • Jerry
          Posted December 15, 2015 at 8:21 am | Permalink

          @Edward; My point was to show that many people who call themselves “English” are not themselves truly English. Some people on the right, when it comes to (im)migration, seem to be using the same tactics as those on the left-wing who push the AGW agenda – ignore anything before their own unilaterally decided date; those who push AGW let no one talk about climate before circa 1900; those who push the supposed migration problem try not to let anyone talk about a date before 1990 (and for some, 1950).

          As for your ‘question’, of course they are not “British”, unless of course they have taken out British Citizenship and thus hold a UK passport…

          • Edward2
            Posted December 15, 2015 at 1:03 pm | Permalink

            But what is the point you are trying to make.
            That few can trace their family back centuries maybe true but why should that disqualify them from having an opinion on the current levels of immigration.

          • Jerry
            Posted December 16, 2015 at 8:23 am | Permalink

            @Edward2; “but why should that disqualify them from having an opinion on the current levels of immigration.”

            Because it basically it makes them somewhat Hypocritical, or at least ignorant of their own past!

            Possibly why few citizens of the USA have ever complained about legal migration, their nations history being sufficiently recent and thus unforgotten. No country has ever been an isolated island, no country is frozen in time (beyond perhaps N.Korea). Had there never been any historical migration to/from the UK this country would be unrecognisable today as that country so many (on here and elsewhere) seem to talk about when they dream of a time before post-war inward migration.

          • Edward2
            Posted December 16, 2015 at 2:20 pm | Permalink

            Your family must therefore go back to 1066 Jerry, as you have opinions on immigration and dozens of other current topics

          • Jerry
            Posted December 16, 2015 at 8:56 pm | Permalink

            @Edeward2; “Your family must therefore go back to 1066 Jerry,”

            Funny you say that, not only 1066 but the Hastings area and a marriage to Norman nobility! As for your comment about opinions, more filthy pots and pans being put on display whilst the cook complains that someone else’s kettle is a little dusty. Whatever…

          • Edward2
            Posted December 17, 2015 at 7:06 pm | Permalink

            How noble you are Jerry. I never knew.
            This is why you have such strong opinions of this and everything else you pronounce on.

  11. Lifelogic
    Posted December 14, 2015 at 9:01 am | Permalink

    Indeed the position is just as you describe. We cannot keep selling Knightsbridge and Chelsea to pay for everything. Furthermore Osbornes’s idiotic and counter productive attack on nondoms and the rich, his enveloped dwelling taxes, his failure to keep even his pathetically small IHT threshold promise, his attack on landlords thus increasing tenants rents and the rest will backfire badly, kill productivity and this source of property “exports” too.

    Certainly getting out of the EU would be a huge net benefit to the country. If we just got out and substituted British made cars and goods for BMWs and Mercs and the many other things we import we would have a trade surplus.

    Losing all the absurd regulations of the EU and having cheap energy would be yet another huge boost to UK competitivity.

    We would alas still have the Cameron/Osborne socialism with their high tax, hugely over complex tax, endless damaging interventions and regulations, warmongering, tax borrow and piss down the drain socialism and their fake green lunacy – all harming competitivity hugely. Further we will still have the largely dysfunctional public services such as the (in three letters) N H S, social services, poor schools, poor universities and the rest.

    Still, we can perhaps address these problems later after we see how wrong they were on the EU issue perhaps they will go and we will get some sensible leadership.

    • Lifelogic
      Posted December 14, 2015 at 9:05 am | Permalink

      The depressing thing is just how may Tory MPs are essentially fake green, tax borrow and piss down the drain Libdims or members his disastrous A list of token women etc. pro EU lefties .

      So the chance of a sensible Tory party even after any Brexit is still rather slim.

    • Lifelogic
      Posted December 14, 2015 at 9:20 am | Permalink

      Why (when Heath, Major, Cameron types are always such a complete disaster for the Tories, the economy and the Country) do Tory MPs keep electing such lefties as leader?

      We saw what the country thought of the Libdim’s policies at the last election yet Cameron’s policies are essentially just the same – he just pretends they are not in his many, totally dishonest, no if no buts/cast iron/in three letters N H S/vote blue get green/low tax Conservative at heart, apologists for terrorists – speeches.

      Still he did (nearly) abolish HIP packs and seems to be slowly & quietly killing the absurd green grants, that so damagingly misdirect the whole energy industry.

      • Lifelogic
        Posted December 14, 2015 at 9:24 am | Permalink

        Also get on with a five runway Heathwick Hub as soon as possible. We will need more long hall flights as we deal rather less with the EU and more with the rest of the World.

        • Original Richard
          Posted December 14, 2015 at 4:41 pm | Permalink

          Although I agree with the need for additional long haul airline capacity I think it is nonsense to consider Gatwick, an airport situated to the south of London and consequently right at the southern end of England.

          We need this additional capacity to be more easily accessible to the Midlands and North of England than Gatwick.

          If Heathrow is an environmental problem then it would make more sense to use the spare capacity that still exists at Stansted Airport and to do this by improving the rail and road links to the airport.

          Perhaps building even a “Heathsted” hub or even a “Heathwicksted” rail hub, which would be of far more use than HS2.

          • Lifelogic
            Posted December 14, 2015 at 7:13 pm | Permalink

            A six/seven runway Heathwicksted hub with an HS train round the M25 taking say 20 minutes sound good to me. By the time they finally get round to giving it the go ahead we will need seven runways at the London hub.

            Though Cameron did say “no if no buts” to Heathrow expansion so perhaps it will happen sooner, given his record of serial ratting.

          • Jerry
            Posted December 14, 2015 at 11:09 pm | Permalink

            @LL; [re your “Heathwick” idea] For goodness sake try looking at detailed a map… 🙁

        • Lifelogic
          Posted December 15, 2015 at 8:29 am | Permalink


          Heathwick can work just fine it just needs some political will. There is nothing on a “detailed map” to suggest it would not work what are you thinking of? Furthermore it can be done in stages a new runway at each and the HS shuttle link, each and all of which would produce advantages in themselves, while ending in a sensible 5 runway hub airport.

          • stred
            Posted December 15, 2015 at 10:38 am | Permalink

            An overhead railway, like the one from vancouver airport into town, could be the answer, largely alongside the motorways. Agree about Stansted. This would cut the already excess traffic on the London motorways and railways. Shopping rather than planning seems to be the criteria for the Davies commission.

          • Jerry
            Posted December 15, 2015 at 3:22 pm | Permalink

            @LL; “Heathwick can work just fine it just needs some political will.”

            Yes, if we lived in the USSR were what the State decides is what gets carried out without comment or protest. Even if the runways could be built without problems your idea of a High speed shuttle link would cost a small fortune for such a relatively short route, if built as anything like direct link, that might end up making the projected cost of HS2 look like small change such would be the property compensation bill should it be largely above ground (even when built as an overhead railway or roadway), whilst the engineering costs for a high speed underground line would be even more colossal. The UK could also have our own manned space flight programme, using our own rockets and space-station, with destination first the Moon and then Mars, after all “it just needs some political will”, and all within the next ten years…

      • Tom William
        Posted December 14, 2015 at 12:27 pm | Permalink

        Because of people like the Chairman of a local Conservative Association in Hampshire who I overheard at a party say, at the time of Cameron’s election, “I couldn’t vote for someone (ie David Davis) who was brought up on a council estate by a single mother”. I did not know her and was too feeble/polite to tell he what I thought of her.

        There are even less party members now than then but I wonder how much they have changed.

        • Lifelogic
          Posted December 14, 2015 at 10:00 pm | Permalink

          Give me David Davis and Norman Tebbit types over serial ratters, tax borrow and waste merchants, pro EU, high tax, fake green conservatives & PR spin merchants every time please.

          I suppose Cameron is quite good at presentation but a sense of direction is what counts then the presentation is for easier anyway. Leading everyone over a cliff with good PR and presentation is not a good plan. Leading them over a cliff with stupid policies & bad presentation (John Major style) is even preferable to this.

      • David Edwards
        Posted December 14, 2015 at 5:03 pm | Permalink

        I enjoy very much reading your stern comments life logic as much as I enjoy reading JR’s more softly political approach. I was particularly disheartened that DC has retracted from his proportionate argument with regard to inter-member state migrants because the commission’s position is not “enshrined” in treaty, it is derived from the advocate general’s judgement in Antonissen. Go figure, the ECJ changing treaty law. Who’d have thought it:)

        • Lifelogic
          Posted December 14, 2015 at 7:20 pm | Permalink

          Indeed that whole way in which lawyers have been able to write law and stretch “right to a family life” or “common market/free trade” or “free movement” to mean almost anything they want it to mean is not democracy in any sense. It is rule by (usually dreadful, and largely parasitic) unelected lawyers.

          What do lawyers want but more and more daft laws, endless court levels, conflicting laws and presidents, huge slowness, arbitrary outcomes, very high fees and a stream of litigants preferably rich or funded by other peoples taxes. Almost exactly the opposite of what benefits the public.

  12. Bert Young
    Posted December 14, 2015 at 9:24 am | Permalink

    Being in the EU has been a financial disaster . Little by little our manufacturing industries have been eroded – in some cases (like ICI) to nothing ; our automotive industry – troubled for years by industrial relation problems , is now completely dominated by outside organisations . Large companies are mainly international and are heavily influenced by their shareholder voices and Board Rooms , so , is it any wonder that they comprise a large influential part of the EU subsidised CBI who cry for us to stay in the EU .

    We must retake control over our affairs . International organisations must be subject to our laws of trade and tax and the EU influences kicked into the long grass . What happens within our own borders is entirely up to us and no-one else ; if organisations cannot and do not subscribe to our conditions , then they are no longer welcomed . We are an attractive enviroment to investors and will continue to be as long as we offer skills and customers for their products ; what we do not need are outside dictates hell bent on destroying our independence .

    • Tad Davison
      Posted December 14, 2015 at 7:02 pm | Permalink

      It’s all down to the type of people we have allowed ourselves to be governed by Bert.

      We only get what we vote for. The trouble is, for some intangible reason, the ones who seemed right at the time, nearly always turn out to be well short in terms of practicality and common sense. No-one in their right mind would ever vote to belong to the EU, but how do we legislate for madness, or those who see position for personal gain and stuff the country to which they should bear true allegiance?


  13. MikeP
    Posted December 14, 2015 at 9:24 am | Permalink

    Sadly too few voters understand this, particularly how the deck is always stacked in Germany’s favour. Those same people who fear leaving the EU, so will vote in ignorance, are also those who bemoan the loss of yet another company to India or China or ridicule the Government for running up huge levels of debt. I hope the Leave campaign is able to get this all across to the masses in due course.

    • margaret
      Posted December 14, 2015 at 10:48 am | Permalink

      We need Peter Snow with his big charts on the box explaining all the movements in money and the balance; not in 5 mins , but half an hour.

      • Tad Davison
        Posted December 14, 2015 at 7:10 pm | Permalink

        I’d go along with that suggestion Margaret! Keep it short, simple, and to the point in a way everyone can understand. But some institutions won’t allow a proper debate. I have had BBC presenters complain to me that they cannot be as critical of the EU on air as they would wish. And such a skewed position from our ‘most trusted’ and ‘impartial’ state broadcaster!

        Perhaps some patriotic private member of parliament might propose a bill to stop the BBC getting anything from the EU.


  14. alan jutson
    Posted December 14, 2015 at 9:24 am | Permalink

    Such a shame that the general Public never seem to get to hear of these figures in the National media.

    So thank you for publishing them on here again.

    The majority of people seem to think trade would drop and we would lose 3 million jobs if we left the EU such has been the lies of fear pedalled for decades by politicians who have their snouts in the trough and who benefit directly from their positions within the EU.

    • Lifelogic
      Posted December 14, 2015 at 11:12 am | Permalink

      The BBC and state sector propaganda units ensure that “the majority of people seem to think trade would drop and we would lose 3 million jobs if we left the EU” many also seem to thing CO2 is dirty pollution and a poison, the a new warming firery hell is just round the corner, that higher taxes and government “investment” helps the economy, that bikes, public transport, bio fuels, wind, PV and walking save much CO2 and lots of other BBC think anti science drivel.

      • Lifelogic
        Posted December 14, 2015 at 7:28 pm | Permalink

        When you ask the public how much Co2 there is in the atmosphere they usually seem to come up with totally daft figures like 10%+ when it is about 400 parts per million.

        Few seem to have a clue about the huge cost and difficulties in storing electricity either or the huge costs of intermittent PV and wind. But who can blame the public with the endless alarmist propaganda from the BBC. It is never honestly explained or put into context.

    • fedupsoutherner
      Posted December 14, 2015 at 11:30 am | Permalink


      Such a shame that the general Public never seem to get to hear of these figures in the National media.

      Why not put all these figures up on a large billboard in every major town and cities across the UK on a weekly basis? Perhaps then a lot more people might realise what is going on!

      • alan jutson
        Posted December 14, 2015 at 6:15 pm | Permalink


        “….why not put all these figures up on a large billboard…”

        Absolutely agree, indeed I said as much on this site about 5 years ago after visiting New York and seeing a huge electronic billboard updating the US National Debt every second in lights.

        The position for such a sign in the UK should be on the Green opposite the entrance to the Houses of Parliament, so Politicians would see it every day.

        Indeed if I was ever in power (never likely I know) that would be the very first thing I would do, so that the true figures could never be hidden or fudged over again for so long.

        Also adds strength to any Chancellors argument when trying to balance the books.

        You would have course have politicians arguing with each other about what actually should be included in the National debt figures.

  15. The Active Citizen
    Posted December 14, 2015 at 9:35 am | Permalink

    You make important points as usual, JR. The key figure to keep quoting is the one of £107 billion balance of payments deficit with the EU. This is the figure that matters.

    The surplus we have with the Rest of the World, which helps to offset this, should not be quantified, as it will only confuse people. I’m pleased to see you didn’t quote that figure. It’s enough to say that we’re in balance of payments surplus with the Rest of the World. It’s only with the EU that we have a massive deficit, of £107 billion. And that deficit is costing us all.

    My preference would be to leave the net contribution figure of £10 billion out of any discussion about our trade balance. This outrageous cost of EU membership for the UK is a separate point, even if it does impact the deficit.

    The pro-EU lobby will of course say that leaving the EU won’t affect our need to continue buying so much from Germany et al. They will even argue that we may end up paying more for our imported goods if EU countries impose tarifs on us. A ludicrous argument – the Eurozone countries need all the sales they can get, as many of them are doing so badly. They can’t afford to make it less attractive for us to buy goods from them.

    The overall answer to all this is simple. When we leave the straitjacket of the EU we’ll start to become a truly globally-trading nation again. Our renewed international outlook will encourage British businesses to produce more for internal consumption (reducing imports) and to export more internationally. And very importantly British business will no longer have to worry about the costs of EU-imposed laws and standards, just the usual international ones.

    This whole area of ‘business confidence’ isn’t stressed nearly enough. Decades of socialist indoctrination have made us Brits almost apologetic when dealing with overseas markets. I write as a businessman and I was certainly guilty of this for many years. Outside the EU and standing on our own two feet, we should be proud of making and providing British products and services. Far more countries have a soft spot for us than you’d think and would be pleased to have the chance to buy from us!

    Part of the upbeat message of the campaign to leave the EU must be to tell the great British public how much we’ll benefit from being free to negotiate lucrative trade deals internationally and for our business people to feel inspired and confident to take advantage. More exports to more countries, more jobs, more success for all.

    Finally, your last sentence. I really don’t think people understand that the EU has always been interested in trade in goods, not services. Why? Because as you rightly point out, the economies of Germany and certain other countries are dependent on manufacturing goods of certain kinds – they’re not strong in services.

    Where is the UK hot? In services. And in the EU there’s still no single market in services. It’s like being members of a football club when in fact we’d like to play rugby.

  16. Loddon
    Posted December 14, 2015 at 9:47 am | Permalink

    Could explain in more detail what are the things “we are good at” that the EU has not liberalised the trade regulations for, and what are the things “they are good at” that the EU has liberalised?

    • Lifelogic
      Posted December 14, 2015 at 11:19 am | Permalink

      Well some German Engineering I suppose. The French are quite good at selling bubbles in cheap wine for a complete fortune and similarly deceptions for over priced perfumes and fake beauty treatments. Italians seem quite good at stamping “Italian” on things like Olive Oil, other food products and the similar.

      The UK are quite good at (Charging ed) people with (questionable ed) audits on company accounts and other profitable tricks of the financial sector like interest rate swaps. Things like Equitable life, Tesco or RBS might perhaps come into this but who knows the courts usually fail the public in these areas?

    • matthu
      Posted December 14, 2015 at 12:39 pm | Permalink

      Historically, the EU has always tended to favour protectionism rather than liberalism. So legislation brought in to favour EU vacuum cleaners over Dysons, sugar beet over sugar cane etc.

      Then legislation introduced to favour taxation e.g. cars to carry SIM cards to faciliate road tax, households and businesses to install smart meters etc. More insurances made mandatory – and then taxed. Dredging reclassified as landfill – and then taxed.

    • Sean O'Hare
      Posted December 14, 2015 at 3:43 pm | Permalink

      …what are the things “we are good at” that the EU has not liberalised

      At a guess I would say services.

      what are the things “they are good at” that the EU has liberalised


      • David Edwards
        Posted December 14, 2015 at 5:14 pm | Permalink

        What are the things we are good at?

        Common law established over centuries of working it out slowly and carefully to avoid step changes.

        What is the EU not good at?

        Common law established over centuries of working it out slowly and carefully to avoid step changes.

      • Jerry
        Posted December 14, 2015 at 9:34 pm | Permalink

        @Sean O’Hare; The UK is very good at manufacturing and the like, which is why (as I have often been remind on here) both EU and non EU based car companies for example often choose to site their component/assemble factories here in the UK, what the UK business (or indeed, dare I say it, the State…) is very bad at doing is owning the means of production with all the fiscal issues that arise.

  17. David Edwards
    Posted December 14, 2015 at 9:57 am | Permalink

    If we were to leave the EU we would be free to invest in UK industry and a somewhat simplistic panacea to UK manufacturing and trade deficit problems (and environmental problems) would be to give the net £10,000,000,000 we give to the EU instead to the 18,000,000 households in the country (just shy of £600 each) in the form of a “helicopter” voucher to be spent on goods only that have been manufactured in the UK. I’m sure there are numerous flaws in my logic, but more important is the general concept that leaving the EU allows us to do different things that we are currently restrained from doing, possibly as well to continue, as we have done for so many years, to be a beacon that promotes political best practice (aka nation state democracy).

    • Jerry
      Posted December 14, 2015 at 10:07 pm | Permalink

      @David Edwards; ““helicopter” voucher to be spent on goods only that have been manufactured in the UK”

      I’m sure that if the state gave every household £600 to spend as they choose on UK manufactured goods the Plebs would dutifully comply, but were will that leave UK manufacturing a year or two. There would need to be a much more sustained “Buy British” promotion, perhaps even moderate compulsion in some areas (by way of higher purchase taxes on certain non essential, discretionary, luxury imported goods). We have all been in love for far to long of buying those £10 widgets made in China, not the £25 widgets made here in the UK (often with better QC etc.), would such a national habit really be broken that easily?

      • Edward2
        Posted December 14, 2015 at 11:22 pm | Permalink

        Plebs…how rude.

        • Jerry
          Posted December 15, 2015 at 8:29 am | Permalink

          @Edward2; “Plebs…how rude.”

          No, not rude, just a bit of sarcasm. After all I’m sure every single one of them understand the value of their £10 Chinese widget but do they truly understand the worth of those £25 UK made widgets?

          • Edward2
            Posted December 15, 2015 at 1:08 pm | Permalink

            My experience of the difference between the two nations prices is much greater than your widget example.

            And it assumes that the UK still offers an alternative product even at a higher price.

          • Tad Davison
            Posted December 15, 2015 at 2:11 pm | Permalink

            I do have a little sympathy with the basic tenet of your post Jerry. Chinese goods and those from the Indian sub-continent are often inferior. I’m presently building a powered hacksaw machine, and the cheap bolts and setscrews are shoddy to say the least, and the threads aren’t properly formed, but better quality domestically-made ones are not to be found, so I had no alternative.

            I have often made mention that one of my many interests is designing, building, flying, then writing articles about radio controlled model aircraft. Many model shops have gone out of business because they simply could not compete with on-line sales of equipment from China. I recently bought a brand new electric motor for just 10p including postage, yet that would cost nearly £20 from a UK retailer.

            One of my other interests is model engineering. I recently made a nice adjustable tool post on my lathe and milling machine as a project intended for publication. As an exercise, I costed it. Even taking my time out of the equation, my raw materials, electricity, and tooling came to more than I could buy a similar item for from from China.

            But what’s the answer?

            Do we force UK unit labour costs down to match those of China or India to be competitive globally?


          • Jerry
            Posted December 15, 2015 at 3:44 pm | Permalink

            @Edward2; As I said, some people (seem) to know the value of everything but few now seem to understand the worth of anything. I fully understand the worth (and quality) vs. value argument, I really doubt you do one bit Edward, it’s still capitalism though, just using a different equation…

          • Edward2
            Posted December 17, 2015 at 7:13 pm | Permalink

            We in the UK have citizens and companies that own huge values overseas just as overseas people and companies own elements here in the UK.
            The world has become smaller and boundaries have fallen.
            You may protest but how are you going to stop Globalisation?

            Back to a siege economy with another version of the Berlin Wall I presume.

  18. Mitchel
    Posted December 14, 2015 at 11:21 am | Permalink

    For those scared by the economic implications of leaving the EU,it might be interesting to watch what is going on in Russia which has obviously been subject to sanctions,exclusion from capital markets and general isolation since Crimea(surely far worse than we can expect post-EU)and yet after a year of recession(largely due to the oil prices) seems to be expected to return to growth next year.I note from an article in today’s Telegraph that one of its most important industries,armaments,saw growth of near 50% in 2014(attributed to new technologies,and new markets)Their agri-food companies seem to be doing well too.Since our elites think we are so superior,so much more sophisticated and entrepreneurial than the “backward” Russians,it should be a breeze for us,shouldn’t it?

  19. majorfrustration
    Posted December 14, 2015 at 11:33 am | Permalink

    Its not that the writers on this blog do not see the problems of the EU – its the other 60m (ish) of the UK think things as fine.

  20. Michael Walzer
    Posted December 14, 2015 at 11:41 am | Permalink

    What are the domains for which the UK has a comparative advantage?
    – services, particularly banking, insurance and business services
    – creative industries (worth 80+ bn annually)
    – tidal energy (for once, the UK can really be told to be at the forefront of developments)
    – robotics and autonomous systems.

    In the pipeline, and more often than not thanks to universities (not to the private sector):
    – energy-efficient computing
    – synthetic biology
    – regenerative medicine
    – agri-science
    – energy storage (linked to renewable energy, and likely to fall back thanks to the government)
    – advanced materials and nanotechnology
    – satellites & commercial applications of space technology.

    There are at present no clearly defined figures for the revenues that these (future) industries could/will bring to the UK, but they certainly are much larger than the 10 bn discussed by JR (see the 80+ bn just for creative industries).

    Are all these ongoing developments to be better sustained within or out of the EU? I am afraid that the rather simplistic answers peddled around here are not good enough.

  21. ian
    Posted December 14, 2015 at 12:17 pm | Permalink

    Business in the is 60% owned by UK companies and 40% own worldwide companies and soon to go down more.

    • Edward2
      Posted December 14, 2015 at 7:05 pm | Permalink

      And UK companies and individuals own large numbers of overseas businesses.

  22. Paul Cohen
    Posted December 14, 2015 at 12:26 pm | Permalink

    Quite apart from the economic scenario, wouldn’t the threat and the possibility of an eventual complete loss of sovereignty be enough to vote “out”?

  23. MikeP
    Posted December 14, 2015 at 12:40 pm | Permalink

    I suspect that the average voter has no understanding of these issues, particularly with regard to Germany’s stranglehold on the EU’s trade, all skewed (as is the Euro) in its favour. European domination they didn’t achieve in the 20th Century achieved by the back door in the 21st.
    Just watching Daily Politics and Damian Green was spouting the oft-quoted scare story that our trade and jobs are at risk if we were to Leave, but neither Daniel Hannan (who was constantly interrupted) nor Jo Coburn asked the simple question, “Why? Why will jobs be at risk?” Surely given unfettered access again to the Commonwealth, the US, Brazil and China our trade with them, and jobs here, will all increase.
    Are we really going to see the French and Germans buy less of our meat, cheese, pharmaceuticals, Airbus wings, Rolls-Royce engines, our cars, IT, accounting and insurance services? Of course not, since they couldn’t risk a drop in their exports of BMWs, Mercedes, VWs, Audis, Porsches, Citroens, Peugeots, Renaults, their cheese, wine, champagne, bratwurst and goodness knows what else.
    The Remain campaigners keep saying we control our borders, well having seen the recent migrant crisis, let’s imagine how well we’d be able to control free access to 60 million Turkish citizens once the EU welcomes them into the club too, as they’re bound to do so they can broaden their trading base to another sucker country.
    No, let’s just get out and get on with our lives, away from this basket case of a protectionist bloc.

  24. forthurst
    Posted December 14, 2015 at 12:45 pm | Permalink

    “Such deficits have to paid for by either selling UK assets to foreigners..”

    …or by encouraging foreigners to build blocks of flats here in prestige locations to be sold exclusively to foreigners as investment vehicles with the certainty of capital gains for them and of homes for English people becoming less available and less affordable, or by bribing foreigners to invest in major infrastructure projects like nuclear power stations by offering them mouthwatering guaranteed returns to be paid for by future consumers of electricty etc.

    Our economy is in a parlous state as a result of our ruinous membership of the EU with its crazy rules designed to destroy it, and with the policies of a government of spivs that has no interest in the future of our country or its people, but one which is simply interested in rewarding an inner circle of revolting slime with which it sees a mirror image of iteself.

    • turbo terrier
      Posted December 14, 2015 at 7:49 pm | Permalink


      “Rewarding the inner circle”

      Is that not the path to full implementation of Agenda 21?

  25. Horatio McSherry
    Posted December 14, 2015 at 1:00 pm | Permalink

    How the hell do we run a goods deficit with Belgium?!

    • Lifelogic
      Posted December 14, 2015 at 10:10 pm | Permalink

      It seems surprisingly these are their top ten exports to the World anyway. I would have though pointless parasitic bureaucracy would have been first but perhaps this is invisibles.

      Oil: US$53.9 billion (11.4% of total exports)
      Pharmaceuticals: $49.8 billion (10.6%)
      Vehicles: $45.9 billion (9.7%)
      Organic chemicals: $34.1 billion (7.2%)
      Machines, engines, pumps: $33.2 billion (7%)
      Plastics: $32.3 billion (6.8%)
      Gems, precious metals, coins: $23.3 billion (4.9%)
      Iron and steel: $16.7 billion (3.5%)
      Medical, technical equipment: $14.9 billion (3.1%)
      Electronic equipment: $14.8 billion (3.1%)

    • matthu
      Posted December 14, 2015 at 10:13 pm | Permalink

      All our MEPs spending their daily allowances.

  26. fedupsoutherner
    Posted December 14, 2015 at 1:49 pm | Permalink

    More claptrap policies coming from the EU. On Radio 2 Jeremy Vine they were discussing the latest madness to hit the UK. Apparently, in 15 years time we cannot cook on gas or use gas boilers for central heating!! We all have to have an underground pump or use electric. On top of getting rid of fossil fuel driven cars. Where is all this electricity going to come from? We cannot manage now without calling on diesel generators and why then are we building new gas turbine power stations? All utter madness and will drive people into more fuel poverty as electricity prices will rise as people will have no choice but to use it. Where are the ordinary folk going to find the cash to implement all of this? Everyone will have a deficit!!

    • ian wragg
      Posted December 14, 2015 at 5:23 pm | Permalink

      This is absolute drivel. We would need at least 300GW of base load power when this year we are struggling to meet 55GW peak loading.
      The smart grid is a pipe dream which is a euphemism for shedding load automatically when demand gets too high.
      New gas fired power stations coming on line have a nominal life of 40 years so none will get built unless given a large subsidy for being standby when the wind isn’t blowing,.
      This is just posturing by then politicians and we are becoming the laughing stock of the world.
      remember that a degree in stupidity is required to become and MP.

      • matthu
        Posted December 14, 2015 at 10:14 pm | Permalink

        There is nothing in the climate legislation to ensure supply will always meet demand.

    • Lifelogic
      Posted December 14, 2015 at 10:18 pm | Permalink

      Indeed insanity. Heat pumps, run off electricity (usually generated by gas/coal) make little sense with current technology. Too capital intensive, expensive to maintain, slow to respond and electricity costs so much more anyway than gas. So the coefficient of performance is largely lost due to the higher price of the fuel and equipment. Perhaps a small. gas driven heat pump combined with a small electric generator, refrigeration and some combined heat and power will make sense eventually. Especially as LEDs can reduce lighting power needs so much. Then perhaps just a gas supply for the whole house or office.

      • hefner
        Posted December 14, 2015 at 11:29 pm | Permalink

        There is a proper explanation of heat pumps on a site from Natural Resources Canada (www.nrcan.gc.ca). They only use electricity to circulate the fluid between hot and cold, or cold and hot sources. So they use much less than an electricity-based heating system, at least a factor 3 efficiency.

        A large number of dwellings in Canada have heat pumps, and I would think Canadians are happy with them. I have got one in a house in Massif Central for winter heating and summer cooling (these things are reversible) and it works perfectly well for about half of what I spend in the UK for heating. As for the set-up and installation, it cost only 70-80 % of what a central heating system would have cost, which would have done nothing for cooling.
        And the technology is not that new. It has been around for domestic use for more than 15 years (maybe not in the UK).

        • stred
          Posted December 15, 2015 at 11:23 am | Permalink

          Re Heat pumps. I too personally installed an air con/air heat pump in my house in France. Even near Spain on the Med, it hardly works in cold winter weather. My French neighbour find the same. Houses on large plots can use ground heat pumps or use a swimming pool size water store. In his book on energy, Prof MacKay is concerned, after working out the heat capacity of the ground, that tightly packed urban houses wil be unable to use ground heat pumps effectively.

          Fedup may be amazed, but this is actually the plan being worked on with total belief by the innumerate zealots at DECC, with the green and electrical industry looking forward to the orders for a system 9 times the value of the old one. Meanwhile the national gas suppy pipes are being renewed by a private monopoly and the cost added to our bills.

  27. Tad Davison
    Posted December 14, 2015 at 1:52 pm | Permalink

    ‘When it comes to EU/UK trade the UK is the customer and the rest of the EU is the supplier.’

    Except this customer (the UK) is paying twice for a very lop-sided and flawed deal. Massive trade deficits are one thing, and are ultimately unsustainable. But for our prohibitively expensive membership fee, we also find ourselves meekly contributing to the EU’s fraud, waste, and mismanagement whenever they demand it through poor and weak domestic leadership. The EU blows our tax-payer’s money in the worst traditions of socialism, as did the Labour Party when last in office, and it has brought the whole EU monstrosity to the point of collapse. With any luck, it will founder before too long, and save us in the UK a whole lot of trouble. Massive amounts of QE by the ECB, and negative interest rates in some areas show the desperate straits the place is in.

    And those who think we in the UK need to keep on borrowing are just plain mad, so people should listen closely to what the Labour Party and the Lib Dems actually say on this subject, especially the neo-liberal interventionists amongst their number who welcome conflicts without really understanding what might happen as a consequence. As one famous general once said, ‘The best laid plans seldom survive the first encounter with the enemy’.

    Whilst interest rates remain low and money is cheap, our debt might seem manageable, but clearly, events could change that at any time, and then, mark my words, we’ve got a REALLY BIG problem!

    Tad Davison


  28. Shieldsman
    Posted December 14, 2015 at 2:19 pm | Permalink

    just read: Benny Peiser: The Non-Binding Paris Deal And Its Implications

    Isn’tit time you started a battle with the Lords over the CO2 reductions demanded and enshrined in the Climate Change Act.
    The idea that we will set an example and everyone else will follow is plain stupid like most things that come out of Government these days with Cameron in charge.

    COP 21 in Paris was a farce, there is no binding and forcible CO2 emission reductions which the parties signed up to. They are working on it, not today or tomorrow, sometime after 2030 possibly.

    The 1.5C limit is a laugh a minute, if we are to believe the IPCC estimates of CO2 sensitivity in a wide range of 1.5 to 4.5 we are already on the way to exceeding it. COP21 has yet to take effect, if it ever does.

    • Tad Davison
      Posted December 14, 2015 at 6:11 pm | Permalink

      Jeremy Corbyn’s brother was worth listening to on RT’s Sputnick last Saturday (Episode 102), and the BBC’s ‘This Week’ programme broadcast the week before last. He’s a highly qualified man in this field and says the Co2 problem is guff. He actually quantifies it in terms even the BBC, the Greens, or the Lib Dems could understand. He also mentions the big corporations who are using this to their advantage to rip us off even more.

      Highly recommended!


  29. Richard1
    Posted December 14, 2015 at 2:33 pm | Permalink

    I suppose if we leave the EU we would save some at least of the £10bn contribution (depends on the deal – Norway and Switzerland both pay something). But why would it necessarily improve the balance of payments? For that we would have to start buying British wine not French and British cars not German wouldn’t we or start exporting a whole lot more? One of the arguments of The Leave campaign is trade won’t be affected – no tariffs etc, so this one needs thinking through.

    Whether we are better off out of the EU depends on what sort of govt and policies we should get having left. If small govt, low tax, Switzerland or Singapore style, great. If on the other hand we get Corbyn and his gang unconstrianed even by the EU treaties which would now prevent some of their confiscatory policies, then it would be worse.

    Reply No other country pays fees to trade with the EU apart form the ones you mention. The saving of our net contributions is a direct savings of the balance of payments, as it is a payment to foreigners we would not longer have to make!

    • Richard1
      Posted December 14, 2015 at 5:12 pm | Permalink

      Yes I agree if the £10bn can be reduced or got rid of that is clearly positive for balance of payments. But if the economic argument comes down to saving £10bn I think Project Fear will win as it will be portrayed as a small price to prevent the uncertainty of leaving.

      I don’t understand why Mr Cameron is so focused on benefits for EU migrants, they don’t seem to cost that much and surely this isn’t the issue. Nor do we want to reduce the number of law abiding hard working and productive Poles – the only interaction I’ve had with newly immigrant Poles has been 100% positive. He should be more focused on bigger picture issues such as contribution levels, remit of the ECJ, trade agreements, limiting the collateral damage of the euro etc. We should welcome productive immigrants. What we don’t want is criminals, terrorists and their sympathisers and welfare scroungers.

      • Anonymous
        Posted December 14, 2015 at 9:12 pm | Permalink

        Richard 1 – The collective of policies means that the national debt is increasing.

        It doesn’t matter how productive Poles are. If they are not paying tax or they are not helping to close the balance of payments gap, then the policy of immigrating them has not worked.

        It is no good topping up their wages, giving them free public services and failing to tackle the 1,000,000 or so Brits that should be doing their work.

        For every Polish criminal who slips through how many Polish workers are needed to pay for the cost of the crime, the court case and the imprisonment of him ?

        • Richard1
          Posted December 15, 2015 at 8:14 am | Permalink

          Spending should have been cut more but of course debt is increasing every year there is any deficit at all. An 11% deficit as was left by Labour was never going to be closed immediately. I see no evidence your comments on Polish immigrants are based on fact.

      • Jerry
        Posted December 16, 2015 at 8:49 am | Permalink

        @Richard1; “I don’t understand why Mr Cameron is so focused on benefits for EU migrants, they don’t seem to cost that much and surely this isn’t the issue. Nor do we want to reduce the number of law abiding hard working and productive Poles – the only interaction I’ve had with newly immigrant Poles has been 100% positive.”

        Four words, U.K.I.P… Remember, without the UKIP standing in marginal seats Cameron would have had a majority back in 2010, Mr Farage even boasted about the fact!

  30. petermartin2001
    Posted December 14, 2015 at 2:41 pm | Permalink

    Such deficits have to paid for by either selling UK assets to foreigners, or by borrowing from abroad.

    Yes indeed they do!

    But we do have to ask: which is cause and which is effect? Does the UK have a deficit in trade, as in the conventional view, because of insufficient exports and too many imports? Therefore there is a need to sell assets and borrow from overseas (ie sell gilts)?

    Or, does the UK have a deficit in trade because there are too many assets sold overseas and too many gilts sold to overseas buyers? This forces the pound up to a higher level than it should be pricing UK exports out of the market and sucking in too many imports?

    • Denis Cooper
      Posted December 15, 2015 at 11:39 am | Permalink

      Noting that even when the pound is low we have difficulty running a trade surplus overall my answer would be “Both, but the first is predominant”.

      • petermartin2001
        Posted December 16, 2015 at 9:48 pm | Permalink

        When has the pound ever been consistently low? Not in recent times I would suggest.

        It’s no good if the consistency isn’t there. That would just make imports temporarily more expensive which could even have a counterproductive effect. It takes some time for the industries to develop to fill the available demand.

        Those investing in those industries would need an assurance, as no doubt has been given by the German government to its industrialists, that the aims of fiscal and monetary policy will be to control currency variations in such a way as to not damage that investment.

        Of course the downside, from a German workers’ POV, is that they are making goods and services for others to consume rather than themselves.

    Posted December 14, 2015 at 2:59 pm | Permalink

    There will be a loss of money on leaving the EU….The money paid by the EU to British trades union branches for weekend visits and accommodation/expenses to “look round the European Parliament ” ( Same people/activists annually getting lots of looks around ) and various organisations like GreenPeace or is it Friends of the Earth..anyway they all eat from the same muslin feedbag of goat’s cheese and organic lentils.

    Did the EU ever get compensation from the French Government when its clandestine Security Forces, Direction Générale de la Sécurité Extérieure (DGSE) bombed an EU funded Greenpeace boat Rainbow Warrior in New Zealand in 1985….(drowning ed) Fernando Pereira, a perfectly innocent Portuguese man armed with a camera? The French Government have since apologised and no doubt they will be just as charitable when ISIL says sorry for Paris natural misunderstandings.

    France is good at making wine.

  32. David Tomlinson
    Posted December 14, 2015 at 3:59 pm | Permalink

    JR: Have you ever been able to get figures for the personal remittances home of both EU workers and non EU residents?
    Every East European worker I come across is remitting every penny home (our local Albanian owned Rumanian manned car wash people describe with pride their extensive house investments). Our Somali refugees are investing back in Mogadishu – all to the detriment of our balance of payments. e.g an Addison Lee driver describing to me his remittance of his savings to build a small hotel in Mogadishu run by his brother. He is about to go there once again on holiday, this time with his two children. Very nice but it is all to the detriment of our balance of payments.
    Ultimately that has an adverse impact on our exchange rate so the cost of our imports goes up.
    Then of course you’ve got £12 bn a year in foreign aid, by definition most if not all in foreign exchange.

  33. Maureen Turner
    Posted December 14, 2015 at 4:43 pm | Permalink

    Selling off the family silver to enable the UK to run a large deficit sounds complete madness. What happens when even the broom cupboard is cleared out. Do we put up a for sale notice. Is it any wonder the EU wants us locked into their Project when their exports to the UK are so much greater than ours to them. In the case of Germany alone £ 30 bn.

    We were advised three years ago Wm. Hague was drawing up a pluses and minuses table on our EU membership but he resigned before we got sight of it. Was this ever compiled by any other Minister or was it never intended to be drawn up or published in the first place? How can the electorate be expected to return a considered vote in any Remain/Leave referendum if they are unaware of all the implications of their vote?

    I have never felt so deceived by any UK government in my life. If we vote to Remain we will no doubt be required to adopt the Euro and be subsumed into the master plan for a Federal State of Europe and all because we thought in our stupid little minds we were merely joining a trading bloc.

  34. Original Richard
    Posted December 14, 2015 at 5:02 pm | Permalink

    Forget about our balance of payments, the forthcoming EU referendum is all about whether or not we want to become a free and independent country again.

    Of course, the corporates are pushing hard that the UK remains in the EU as they are able to use the EU to move factories and workers where they wish and avoid corporation tax.

    The pro-EU proponents always ask the question as to what changes will happen to the UK and how the UK will survive if we leave.

    The more important question to be asked and answered is what will happen to the UK if we vote to remain in the EU.

    Will we have to join the Euro ?

    Will we have to accept continuing very high levels of immigration as the EU expands to include Turkey (75m people) and all the eastern European countries as far as the Urals (both Conservative Party as well as EU policies) ?

    How much will our contributions to the EU increase as the EU absorbs further poorer countries and millions of economic migrants from outside the EU ?

    What sort of country will we become when we have to accept the laws and directives from an undemocratic institution over which we have almost no influence through QMV ?

    • Denis Cooper
      Posted December 15, 2015 at 11:18 am | Permalink

      Yes, yes, a lot, and we will become the sort of country which is not actually a country except for touristic purposes, like Shakespeare Country or Jane Austen Country.

  35. acorn
    Posted December 14, 2015 at 5:50 pm | Permalink

    A net £10 billion in subs to the EU, is peanuts in a £1,800 billion a year economy. JR, you are going to have to find a better metric to hang your campaign on.

    Redwoodians should gets some education on how a floating fiat currency economy actually works. This Conservative government, is still trying to control the UK economy, using an out of date instruction book, from the era of fixed exchange rates and the Gold Standard. The Balance of Payments under a floating currency regime, is different to one under a fixed exchange rate, Bretton Woods type regime.

    To cut a long lecture short, have a read of the “Pink Book”, (particularly Chapters 9 and 10). You will see how the UK economy of the 99% has, and continues to be, driven down hill since 2010, by an out of date ideology. If you are in the 1% elite, life is sweet and getting cheaper by the day. http://www.ons.gov.uk/ons/dcp171776_420406.pdf

  36. Leslie Singleton
    Posted December 14, 2015 at 6:17 pm | Permalink

    Have only just read Boris’s piece on becoming like Denmark re immigrants’ not being allowed to buy houses for five years. Am I alone in thinking this will not only not do much about the housing shortage (how many immigrants immediately buy houses?) it will for reasons too obvious to mention put the cost of renting up–where else are immigrants going to live? Mind you if insisting on being like Denmark in this matter irritates EU maniacs and just possibly helps us to move even a bit closer to the exit that would be good.

    • Denis Cooper
      Posted December 15, 2015 at 11:14 am | Permalink

      It’s just a red herring.

  37. fedupsoutherner
    Posted December 14, 2015 at 8:34 pm | Permalink

    If we’re really serious about saving money we could do no better than to listen to the advice of Patrick Moore, founder of Greenpeace. A very simple presentation highlighting what a waste of money all the green crap is. Hopefully, the 27 leaders within the EU will get the opportunity to sit down, listen and understand but I won’t hold my breathe. Mr Cameron, repeal the climate change act.

  38. matthu
    Posted December 14, 2015 at 10:27 pm | Permalink

    Today we have Boris saying we want an opt out to allow us to vary benefits to migrants.

    No, we don’t.

    We actually don’t want any temporary opt outs of any sort at all.

    Historically opt outs, like rebates, have almost always been given up or frittered away, like our rebate that Tony Blair largely gave up believing that we would be rewarded with CAP reformation. Or the multiplicity of opt outs that the Conservatives gave up earlier this parliament, with absolutely nothing in return.

    All of which simply serves to underline the fact that we can never take a deal with the EU at face value: an opt out is no more than a deferred opt in.

  39. cornishstu
    Posted December 14, 2015 at 11:54 pm | Permalink

    WRT to selling off the family silver, it seems that the government is yet again looking to sell off the land registry a public organisation that covers all its over heads and actually makes a profit contributing to the exchequers coffers, why? It can only be for short term gain or to line someones pockets, it certainly will not be in the taxpayers best interest.

    • Denis Cooper
      Posted December 15, 2015 at 11:13 am | Permalink

      Indeed, why?

  40. They Work for Us?
    Posted December 15, 2015 at 12:41 am | Permalink

    All of the previous discussion should tell us that our politicians need to have much of their power removed to act on our behalf. The ludicrous concept of increasing fuel bills, abolition of fossil fuels powered vehicles, central heating etc should be subject to referenda after the facts on cost and the true status/ validity of warming “predictions” explained.
    These matters should NOT be decided at a cheerful conference of the great and the good. On many matters the people need to be heard to shout “we never agreed to that and we are not doing it, Mr Politician you are fired!”

  41. waramess
    Posted December 15, 2015 at 5:43 pm | Permalink

    A very interesting piece which must make even the most ardent Keynesian pause. Even those who think with the most superficial of grey matter should consider the damage being done by these deficits and what is happening to our economy.

    Sending money to the EU is, stated simply, a gift of resources.

    There is no difference between sending money to the EU in return for nothing and running a current account deficit with Germany except that the resources end up in a different place.

    All pretty obvious stuff but I wonder how loud “Bloke in the Street”, whose labour is paying for it, would applaud should it be painted in such stark terms.

    There was a time when you could exchange a pound for more than 4 dollars and economists will give many reasons for it’s decline from this level however, nothing can hide the fact that when the pound could be exchanged for more than four dollars, we were in a better place than we are in now.

    There are those who would insist our current account deficit would be far worse than it is however since successive deficits have in effect simply sustained otherwise non sustainable government spending the remedy should be quite clear.

    Any deficit is bad news and the truism is that all deficits are incurred to finance unsustainable government spending.

    No doubt there will be those who delude themselves that running a deficit is the best way of getting the working man to take a pay cut but the genie is now out of the tin and it should be time to put it back, EU contribution or no EU contribution:-


    • petermartin2001
      Posted December 16, 2015 at 3:30 pm | Permalink

      Any deficit is bad news…..

      On the question of the current account or balance of payments it can’t be right to take this view. Not everyone in the world can run a surplus. All international financial transfers do have to sum to zero. So if Germany is always in surplus someone else has always to be in deficit. That’s just arithmetic.

      The same thinking can apply to UK finances too. If we divide up the UK economy into government, domestic and international then that also has to sum to zero. If the government is in deficit, then the sum of domestic and international must be in surplus. If the government aims to be in surplus, then the same sum of international and domestic would have to become a deficit.

      Our international trading partners are in surplus at present so the government’s aim to be in surplus too will put a huge strain on the domestic resources of the economy. There would have to be impossibly huge private sector borrowings to keep the economy going. Any government surplus, in the lifetime of this Parliament, is clearly not going to be possible unless the international position changes significantly and quickly.

      • Edward2
        Posted December 17, 2015 at 7:15 pm | Permalink

        Treating the planet as if its one big balance sheet.

        • petermartin2001
          Posted December 18, 2015 at 9:49 pm | Permalink

          If we ever have a permanent base on Mars or start trading with extra terrestrials, we’d have to have an interplanetary balance sheet too 🙂

  42. petermartin2001
    Posted December 16, 2015 at 4:26 pm | Permalink

    Just slightly off topic, but I might just point out that the US Fed is currently deliberating on the question of interest rates there and is expected to raise them. It is worth noting that the level of interest rates is nothing to do with supply and demand. Interest rates don’t naturally rise when there are more wishing to borrow money than lend it out . It is entirely a question of government policy or the decision of a “totally independent” central bank if we are to believe that.

    Why would the US government want interest rates to rise when it then had to pay out more on its National debt? If interest payments were a problem to the US government then it would never have interest rates much above 0%. In fact it could have zero permanently if it wanted. So, maybe they aren’t such a problem after all?

  43. James McGibbon
    Posted December 17, 2015 at 12:18 am | Permalink

    Dear John. Just looking at MPs & MSPs salaries. A scottish MSP minimum salary is around 53k. An MPs minimum salary is around 73k. Therefore around 126k is spent to represent my country Scotland with the various responsibilities. An English MP just gets 73k for all the responsibilities. Now being a retired former trade union representative and I know you are not keen on trade unions I would say English MPs should be paid far more than the devolved parts of the UK MPs. Looks to me it is not only the EU that are taking the English to the cleaners.

    Reply I wish to carry on doing both jobs as an English MP for the same money. Having fewer MPs can help get down the cost of politics. I am not anti TUs.

  44. Ken Moore
    Posted December 18, 2015 at 9:13 am | Permalink

    We keep being told that importing thousands of extra workers is good for the economy …but many of these extra workers are likely to send a good proportion of income back to their country of origin.

    This can’t be good for the current account deficit.

    Are there any figures available on this ?.

    • petermartin2001
      Posted December 18, 2015 at 10:06 pm | Permalink

      You could say the same thing about a UK retiree who sells up and moves their money to Spain.

      In both cases, the worker’s family and the retiree will want to exchange their pounds for euros on the forex markets. Is that a bad thing?

      It could cause the pound to fall in value, slightly, relative to the euro. That according to the principles of free market economics would lead to more export sales and few imports from the EZ and so reduce the trading imbalance.

      There are some of us who think that international markets aren’t quite as free as they should be – which is why we have these imbalances in the first place. They are generally caused by governments manipulating their currencies to give themselves trading advantages and the fault of neither migrant workers nor international retirees.

  • 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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