Should we take our balance of payments deficit elsewhere?

The  November trade figures repeated the picture of our long years of membership of the EU. We remain in heavy deficit, thanks to a large deficit with the EU. Our trade with the rest  of the world is in surplus.

November saw new records for the level of our imports from Germany, Spain, Slovakia and the Czech Republic. Germany remains by far and away the largest exporter to the UK, selling us £5.3bn of imported goods  in the month. The USA remains our biggest trade partner for our exports, buying £3.8bn of our goods in November.

The reason I voted for Out of the EU in 1975 was I ran the numbers on the UK in the EU at the request of my then employer. It was quite clear that the EU was going for asymmetric trade freedom in ways which would help the manufacturers of Germany and France export to us whilst not helping the service providers of the UK export so much to them. I forecast a continuing run of large deficits, as happened. I also ran the numbers on UK contributions, which were large and rising, as that was prior to the Thatcher renegotiation which got the net contribution down usefully. Mr Blair then gave some of that away putting us back to almost as bad a position as the original bad deal.

The UK is made to pay far too much for the alleged privilege of importing from Germany and the others. We would trade quite easily with them without belonging to their expensive club. I am not out to transfer our deficit somewhere else, but stopping the club subs would cut the deficit substantially anyway.


  1. Leslie Singleton
    January 13, 2016

    Postscript–Approximately 10 seconds after writing the above I read that Boris has just “told senior Eurosceptics he does not want to be their leader”. I think the less of him.

    1. Mitchel
      January 13, 2016

      Are you really surprised though?The man has no principles and it was only ever likely he would have gone ahead if there had been an unassailable lead in the polls for OUT (on an “it’s the Sun wot won it” basis).His sister made her position slyly clear in the MoS – she didn’t want her friends who work for the EU bureaucracy to have to leave London so she’s voting for “Great Britain rather than Little England”.

      I’m rather glad the snowflake Eurosceptics are melting away,we will all know where we stand then for the referendum is unlikely to be the definitive end of the matter,either way.

  2. Boudicca
    January 13, 2016

    This is precisely why, if the UK votes to leave the EU, a Trade Treaty will be on offer in very short order.

    Germany can’t afford not to agree one. Neither can France.

    The trade argument for EU membership doesn’t stack up, yet that’s been the only argument the EU-philes have used until recently. Now the scaremongering has been countered with facts, they’re parroting the “national security” line. But that’s been trashed by the migrant influx; terrorist attacks and the NY Eve attacks in Cologne and various other German cities carried out (allegedly) by Muslim “refugees.”

    So the EU isn’t making us prosperous. It isn’t providing security. They cannot find a positive reason for our membership, so they are relying on a negative campaign to scare the British people into staying in.

    1. Timaction
      January 13, 2016

      Indeed. There is no convincing reason to remain but to fulfill the Legacy parties dreams of Federal European State. That is and has always been their ambition by stealth. I watched Farage wipe the floor with the Welsh First Minister in a debate and for the first time listened to the working people starting to understand its about our sovereignty, law making, culture and history. Trade is an aside!

    2. alan jutson
      January 13, 2016


      Absolutely correct.

      All the stay in campaign has done so far is to try to impose fear if we leave.

      Not a single positive argument for staying
      Their ideas for the future of the EU (Five Presidents report) has not been promoted in the main media at all, its as if they want it hidden from the population until after the referendum.

      At least the leave campaign are offering alternatives which are positive.

      To Govern ourselves.
      Trade with the rest of the World
      Control our own Borders
      Save a £50 million a day membership fee
      Control our own energy policies.
      Set our own employment laws and regulations
      No having to go to the European Court of so called Justice.
      Control our own tax rates.
      Set our own Budgets.
      Set our own Foreign policy
      Never know we may even get our own fishing waters back to work for us.
      Etc, Etc.

      If the EU imposed restrictions on our trade with them, I think Mercedes, VW, BMW, Audi and the like would be worried they would suffer the same in return.

      Likewise France, Italy, and Spanish wine merchants.

      If we have not lost the power to completely Govern ourselves, then why has our Prime Minister gone begging for crumbs from the table of our EU Masters to try and get some back.

      All we want is Trade and Co-operation from the EU, nothing more, and you simply do not need to be a Member and pay huge fees for that to happen.

    3. backofanenvelope
      January 13, 2016

      The plan to achieve a workable exit from the EU rather depends on the EU leadership taking a rational approach. The immigration and euro crisis both suggest a lack of rationality in the upper reaches of the EU Commission and the Franco-German leadership.

    4. petermartin2001
      January 14, 2016

      If the EU, including the Eurozone, was a success then there would be a good case to be made for staying in. But, we’d have to be prepared to adopt the euro otherwise we’d end up, effectively, not being a full member. We wouldn’t have much, any influence.

      That’s still true even though the EU, including the Eurozone, isn’t a success. It’s been quite a while since I heard anyone argue the case for the UK joining the euro.

      The pro-EU side have a big problem there. They can only argue that we should continue to be an associate member of a failing organisation. They can’t argue we should go the whole way and be full members.

      That’s not a very inspiring argument for staying in!

  3. Mike Stallard
    January 13, 2016

    This is a good argument for leaving the EU.

    A rider:
    Carwyn Jones, who is First Minister of Wales, does not want us to leave the EU because there are so many jobs and industries that depend on the EU and he does not want to put them at risk.
    He assumes – quite wrongly – that the day after the victory for the LEAVE vote comes through, we will immediately be out of the EU. Immediate effect.
    Nobody wants that.
    We have to be weaned off it slowly and with great care. We need to apply article 138 as Article 50 will then be called under the Fundamental Law. We need to make sure that Associate membership embraces EEA and EFTA Membership.
    We continue trading as normal. We accept and repatriate all EU: laws too for later discussion. Nothing will seem to change.
    Softly softly catchee monkey and all that stuff from my distant childhood.

    1. Denis Cooper
      January 13, 2016

      Hopefully Article 50 TEU will still be Article 50 TEU when we come to invoke it.

  4. Ben Kelly
    January 13, 2016

    The UK is made to pay far too much for the alleged privilege of importing from Germany and the others. We would trade quite easily with them without belonging to their expensive club

    And here is one of the easiest refutes of the “in” crowd’s arguments. The EU is a marketplace not a club. The “in” crowd claim you can not be in the club without paying your dues and abiding by the rules. However in a marketplace you just turn up with your wares, pay for your pitch and trade. If you are buying there is no fee to buy.

    We do not need to be part of this asymmetric “club” in order to buy and sell to it.

    1. petermartin2001
      January 14, 2016

      Its actually much more buying from than selling to.

      The Germans are very good at providing figures showing their trading relationships. In 2014 they bought less than half as much from the UK as they sold to the UK.

      I’d argue that it doesn’t do them any good to trade this way. They may have a surplus in money but it’s a deficit in real things. Still, they seem to want it this way, so why would they want to do anything to damage the UK economy after a leave vote?

  5. Jerry
    January 13, 2016

    “The November trade figures repeated the picture of our long years of membership of the EU”

    Strange way of looking at 35 years of de-manufacturing, I bet our ‘magic money tree’ industries do very well in exporting our expertise!

    “Our trade with the rest of the world is in surplus.”

    What is the break down on those figures though, are we talking about trade that earns the UK profit or does it just give those within the UK jobs, for example many cars are assembled in the UK but because the company is not owned by a UK based company any post tax profits might not stay here in the UK.

    [my emphasis] “It was quite clear that the EU was going for asymmetric trade freedom in ways which would help the manufacturers of Germany and France export to us whilst not helping the service providers of the UK export so much to them.”

    Surely a comparison between apples and pears, if not apples and oranges, One has to ask why then the Thatcher government that you were an advisor to decided that our economic well being lay in such service industries and not our then manufacturing base – yes I know that we had awful labour relations problem, but so did both France and W.Germany.

    Nice to read some economic arguments for a Brexit though, bet it won’t stop reader comments along the lines of ‘it’s all the fault of migrants” sadly…

    Reply I advised Mrs Thatcher’s government to encourage industry as well as service development and proposed and supported various policies to help, including the successful lower Corporation Tax rate strategy that Mr Lawson developed and put through as Chancellor

    1. Jerry
      January 13, 2016

      @JR reply; Well at least you had some success John…

      But the fact remains, we can not as a country be ‘makers’ -and thus striver’s- if we do not have the manufacturing capacity, and when we do have that physical manufacturing capacity it is owned by one of our national competitors and the profits (and perhaps tax liabilities) are simply going off-shore (and where future investment/R&D decisions will also be made).

    2. libertarian
      January 14, 2016


      Only read your first sarcastic ( and totally wrong ) sentence

      “Strange way of looking at 35 years of de-manufacturing, I bet our ‘magic money tree’ industries do very well in exporting our expertise!”

      Once again Jerry supplies us with evidence of his total ignorance of business.

      Service exports ( what you call magic money tree ) exports first exceeded manufactured exports in 1956 and have done ever since. Even so the UK is still the worlds 6th largest manufacturer . Service industry expertise exports are indeed highly valuable and huge UK revenue generators in multiple areas of service expertise

      As you were so wrong with your opening I didn’t waste time reading the rest of your drivel

      1. Edward2
        January 14, 2016

        Libertarian I agree with all you say.
        Those who sneer often seem to have 20/20 hindsight vision.
        Yet they offer no solutions to the problems of today.

        1. Jerry
          January 15, 2016

          @Edward2; Only if one is looking at the problems of today in a vacuum, as both you and Libertarian try and do. The solutions to our problems lie with acknowledging past mistakes.

          Funny how in the 1980s identifying what had gone wrong between 1945 and 1979 was acceptable, but 35 or so years on from 1979 (that is, in 2016, the same period of time as between 1945 & ’79) people like you two seem to get very upset when people want to learn the lessons from history that period now that the policies of those days have matured and the actual (ill-)effects are known.

          Its as if the 1979-1997 period of Tory government policies must not be questioned, but had the same reasoning (an unknown number “made it good” in those years) had been around in the 1980s then we would have still been building council houses by the thousands (to be let out to grateful tenants) and most likely system-built high-rise flats too, simple because many a builder made their fortunes doing so from the 1950s.

        2. Edward2
          January 18, 2016

          Endlessly pedantic Jerry
          Just carry on posting your trivialities.
          Just try to remember the topic of the original article.

      2. Jerry
        January 15, 2016

        @libertarian; “Only read your first sarcastic ( and totally wrong ) sentence “

        Well at least you admit to replying to what you think I said and not what I have actually did said…!

        “Once again Jerry supplies us with evidence of his total ignorance of business.”

        How do you know either way, after all you said that you have not read past the first sentence, duh…

        “As you were so wrong with your opening I didn’t waste time reading the rest of your drivel”

        More likely (as you imply you did read my entire comment) you can’t actually pen a coherent reply as the facts are facts and the truth is starting to be exposed, since the magic-money tree caught die back in 2007.

        Sorry if it hurts but your flavour of magic-money capitalism has failed, this country is now nothing more than a warehouse (and at best a factory owned by companies from our competitor nations), where we were once a manufacture for the world, yes it provides employment but without profits, IP and R&D etc. being retained here in this country what is our future. The only “drivel”, and constant excuses, are coming from people like you Mr [non] libertarian.

        Try stepping out of your comfort zone of CBI style breakfast meetings and what ever, try asking some of the rank and file, even some well established businesses owners (not forgetting the millions of sole traders).

        1. Libertarian
          January 15, 2016


          Oh dear for some one who bangs on about facts its a shame you don’t know any. The world moved on , service industries are now a major part of manufacturing and as far as UK is concerned a vast income generator.

          1) I own a small manufacturing company

          2) I can introduce you to dozens of small leading totally UK manufacturing co’s

          3) You have no idea despite the fact that I’ve linked you many times to the UK manufacturing society website what is made here by who

          Sadly for you you will never get to hear my well received lectures on the small business economy. Shame you might learn something about the economy in the 21st century

          Oh and capitalism and service industries isn’t all about banking, and that is why your limited vision leads to drivel

          1. Jerry
            January 16, 2016

            @Libertarian; “The world moved on , service industries are now a major part of manufacturing and as far as UK is concerned a vast income generator.”

            But the world has not moved on, that is the point (the world still does all the same things we used to), it is just that some in the UK decided that the UK would opt-out of what the rest of the world did and still does, and now we often than not have to buy from our national competitors, whilst many have become very good at also doing all those blue-skys service industries that you think the UK leads the world at simply because we were the pioneers back in the 1980s.

            You seem totally removed from the realities of Mr Average in the UK (and that includes everyone from the small company owner to the person who works part time to make their pension go just a little further), just like so many who think they have all the answerers, heck even Mr Osborne has had to accept that things might well get worse before hopefully getting better (hence his warnings barely a month after all his optimism when delivering his Autumn statement). China is slowing down, stock markets are in a state of flux, the oil price has all but crashed. Never mind Mr (or is it Mrs/Miss/Ms) @Libertarian, carry on pruning your rose garden, by the time people like you notice winter has arrived it will be to late and your roses will be lost to the frost, it will be 1997 all over again but this time it will be a Mr Corbyn welcoming a new beginning at 7am and then striding (or cycling) up Downing Street, not nice Mr Blair with a blue streak to his policies.

            “I’ve linked you many times to the UK manufacturing society website what is made here by who”

            That is only half the story, and probably no more than a quarter, and you know it.

            “Sadly for you you will never get to hear my well received lectures “

            We’ll have to take your word for that, seeing that @Libertarian could be anyone with access to the internet… Oh and Hugo Chávez was also “well received” too, those looking for what they want to hear usually do give a good reception to the speaker!

          2. Edward2
            January 18, 2016

            Jerry you live in the past
            And you seem to have no experience of what commerce is like now.
            Your heyday was the seventies
            Life is very different now.
            Libertarian is right.

  6. Richard1
    January 13, 2016

    An argument put forward by the Stay campaign is are some 200 trade deals by the EU around the world all of which would need to be renegotiated, and may or not necessarily be as favourable. leave needs an answer to this, also more tangible evidence as to why the single market works for German manufacturing industries but not UK service industries. I don’t think the public has much of a handle on this yet.

    Reply If we leave we will propose continuation of the current terms of all trade deals with rest of world until we can improve them by negotiation.

    1. Denis Cooper
      January 13, 2016

      Further to the reply, technically it would be a simple matter to add a protocol to an existing trade treaty between the EU and its member states on the one hand and a third country on the other to say that the treaty will continue to apply to the UK even after it has left the EU, either for a set period of years or indefinitely.

      1. Richard1
        January 13, 2016

        Only if the third country agrees

        1. Denis Cooper
          January 14, 2016

          Of course, I’m talking about a simple technical step which (as far as I can see) would achieve the desired practical result of maintaining trade on the existing basis and allow a new agreement between the UK and the third country to be negotiated at leisure. If the third country, or the EU, or indeed any of the EU member states, would prefer to see trade disrupted with economic losses to all concerned then they could refuse to agree to that protocol.

    January 13, 2016

    The UK could have made a killing recently exporting prefabricated housing to Germany and decent food to Calais and Dunkirk. But no British producer and exporter stepped up to the plate.
    It seems MPs are more concerned about whether we should ditch singing God Save the Queen at football matches. God forbid.
    If needs must: the late Lonnie Donegan’s 1960’s song might hit the spot:-
    “My Old Man’s a Dustman”

    “Oh, my old man’s a dustman
    He wears a dustman’s hat
    He wears cor blimey trousers
    And he lives in a council flat
    He looks a proper narner
    In his great big hob nailed boots
    He’s got such a job to pull em up
    That he calls them daisy roots
    Some folks give tips at Christmas
    And some of them forget
    So when he picks their bins up
    He spills some on the steps
    Now one old man got nasty
    And to the council wrote
    Next time my old man went ’round there
    He punched him up the throat ”

    Of course nowadays “dustman” (line one ) would need to be replaced by “Wheelie Bin Service Person” on anti-sexist grounds
    “dustman’s hat” ( line two ) replaced simply by “hat” to avoid stereotyping
    ” lives in a council flat” (line four ) replaced by “lives in his home” to avoid stereotyping
    “narner” (line five ) replaced by “appropriately mixed fruit” to avoid a racist word
    ” Christmas” ( line nine ) replaced by “days off work” avoiding Islamophobia
    ” punched him in the throat ” ( line sixteen ) replaced with “calmly discussed ” so not promoting violence

    We have come a long way since 1960. It’s no wonder we import so much from our wonderful friend German (or woman ) y.

    1. Margaret
      January 13, 2016

      Well they have dug a hole where a hole don’t belong and we are going to fill it with progressive caring Brits with common sense values.

  8. agricola
    January 13, 2016

    Apart from the Portuguese, Dutch, and Spanish there is not much of a maritime tradition within the EU. They are not outward looking, preferring protectionism of what they have. Witness the ramparts around agriculture and their seeming reluctance to have trading agreements with China, the USA, and India. It reflects their lack of confidence in their ability to compete.

    From experience of my part of the EU I think they would benefit greatly from more competition in the service sector, electricity and gas supply in particular. Road fuel is much cheaper here because the government take less out of it than in the UK.

    For the UK to have to pay a membership fee for the privilege of exporting to the EU seems very short sighted of our government when countries outside the EU pay nothing.

    CMD was right in the past to call for a root and branch reform of the EU, but it is now obvious that he will not get it. Like the cuckolded husband he still wishes to share the marital bed. It is indeed bizarre that he would wish to shackle us to the EU come what may. To take such an illogical stance there has to be something in it for him, but what I ask.

  9. nigel
    January 13, 2016

    JR: Can you explain “assymmetric trade freedom”?

    Reply They relaxed trade in goods they were successful at, but not in services where we were more competitive.

  10. Antisthenes
    January 13, 2016

    So like me you believed that the EU was build in such a way that favoured Germany’s mercantilism and France’s preferred economic model of protectionism. I came about that belief not as you did by research and calculation but just because it seemed to me obvious that was the case because of the mind set of the Germans and the French and the harmful effects that situation was having not just on the UK but also on many other members of the EU. It is an awful indictment of our governments that they appear to not see the damage that is being done to them by allowing France and Germany to decide how best the EU is constructed and run. In fact having an EU at all. They must be very blind or in denial or just do not care as it benefits the privileged few not too or fits their ideological beliefs. Mostly the last one as the concept is difficult to deny that it is an admirable one where as the reality is that it is not one that works when put into practice. As is so often been proven.

    The facts are that the EU as a political and trading entity is far more harmful to it’s members interests than useful to them. What uses it had and there were some are no longer valid trade is becoming global and so making it as trading block redundant. Political union has proved better in the theory as it has sped up international cooperation than it has and will in practice as a super nation excludes so many from the decision making process. Self determination and sovereignty is lost power is centralised so that we can be told what to do which is no better than living in a dictatorship. A recipe for discord, disharmony and for not applying national solutions to national problems.

    The UK and most of the EU’s members would be better out standing on there own and participating themselves not letting the EU do it for them in the world. Where they can participate in global trade and political discourse unfettered by narrow interest rules, regulations, laws and not limited by collective responsibility.

  11. fedupsoutherner
    January 13, 2016

    I watched the debate last night between Farage and the Welsh First Minister last night and this is exactly what Farage was saying John. If we left the EU there is no way that Germany and other major players will stop us trading with them. They have too much to lose and if we have (if we have) a powerful leader then we can make our own demands on how much we pay to trade with them. We do not have to have the same system as Iceland or Norway. It is about time we had confidence in ourselves as a nation and stopped cow towing to the rest of Europe, in particular, Germany. There is too much scaremongering going on amongst politicians on the issue of loss of trade and jobs. There should be more focus on our jobs we have lost for instance, our fishing industry which has been decimated. Many other jobs have gone too due to stupid EU policies on energy and too much red tape and legislation which could be reformed in a more favourable way.

  12. Bert Young
    January 13, 2016

    I have recently read of the attempts to join the OEEC that resulted in the Napoleonic “No” from De Gaulle . What was surprising was that the then ( Conservative ) Government proposed not only a commercial relationship but an increasing economic one – this at the expense of our relationship with the Commonwealth !. Heath of course was the instrumental influence in the Government at the time .

    Now we face the truth of our attempts ; the EU is fading fast and our fear of losing influence in world affairs proved not to be the case ; what we are left with is an economic imbalance and a continuing high cost of membership . It only goes to show that the trust the electorate have in their representatives does not always turn out to be for their good ; once again we face the challenge of redirecting our markets although , this time , without the bond of the Commonwealth as it used to be . I voted for “Out” then and I will vote for “Out” again . Leadership is often misguided – even when it is backed up by good worldly experience , today we have the same condition minus the experience factor .

  13. majorfrustration
    January 13, 2016

    Quite but has Cameron run the numbers. Could anybody on the back benches guide him and explain the significance

  14. The Active Citizen
    January 13, 2016

    Excellent diary entry, JR, succinctly put. The following multiple choice questions might work well for one of the Leave campaigns :-

    Confused About The EU? These Answers Might Surprise You

    “From the latest official ONS statistics, who does the UK sell most to?”
    A: France
    B: Germany
    C: USA
    [Answer: USA – a non-EU country – buys the most from us.]

    “Which country sells us the most?”
    A: Germany
    B: USA
    C: Switzerland
    [Answer: Germany – an EU country – does best out of selling to us. Nice for Germany, so they certainly won’t want to stop trading with us if we leave the EU!]

    “Which is the UK’s fastest-growing export market compared to a year ago?”
    A: Netherlands
    B: Switzerland
    C: France
    [Answer: Switzerland – a non-EU country – has bought 38% more from us than a year ago.]

    “Which is our biggest export region?”
    A: The EU
    B: The Rest of the World
    [Answer: The Rest of the World. It represents 55% of our sales as a country and this percentage has grown steadily. The EU market has a reducing importance for the UK.]

    In each answer above, the UK is doing better from non-EU countries than from our supposed EU partners. If we could negotiate our own trade deals with the Rest of the World – something currently prevented by our EU membership – we would do even better.

    Source: ONS latest trade stats

  15. oldtimer
    January 13, 2016

    No doubt part of that trade deficit with Germany is down to the favourable fx rate Germany enjoys through membership of the EZ. That no doubt also contributes to its huge trade surpluses with other EZ members and the rest of the world. No wonder they have a vested interest in its preservation and the retention of the UK to continue to pay for the privilege of running its trade deficit! Brexit would introduce new uncertainties for German business and its access to the UK market should the UK start to conclude its own trade deals elsewhere around the world.

    This economic aspect of the UK’s relationship with the EU does not get enough attention. Cameron seems to want to bury it and for good reason. Set out baldly, the argument for paying a net c£12 billion a year to the rest of the EU for the privilege of a c£40+ annual trade deficit and unrestrained access for EU citizens is a tricky one. Yet, no doubt, this will be advanced by him as the “safe” option.

  16. agricola
    January 13, 2016

    Over time I have come to the conclusion that far too much power is vested in the office of Prime Minister. He would seem to be able to move around making his own rules, policies and agenda with little honest open reference to the party that put him there , members of his cabinet, the wishes of his party supporters, or those of the electorate as a whole. The only restraining caveat would seem to be the potential loss of power at the next election. In the case of CMD, intent on retiring in 2020, he is possibly not too fussed about the next election.

    As a manifestation of this situation the future relationship of the UK to the EU would seem to be held within the fiefdom of the PM. I cannot recall any gathering at party or national level that gave him the freedom to strut Europe deciding our future as a nation. There is no consistency in his demands. Having set out to reform the EU, he is now reduced to gently stroking it’s body. An unresponsive body at that.

    I realise that one can argue that ultimately the country will decide, but only because UKIP effectively made it impossible for him to refuse. Why do we have to suffer all this anxiety and humiliation as a nation in the process. Consensus , clarity of purpose and direction would avoid this death by a thousand knives.

    We are even told that if he looses the referendum he will feel free to remain as PM and control our exit. A process that is so anathema to his purpose that he has no contingency plan to effect it. How arrogant can you get.

  17. Know-Dice
    January 13, 2016

    I want a document (single A4 sheet) that I can stuff in the face of any pro-EU person that knocks on my door in the next few months…

    5 to 10 Clear and concise points as to why we would be better off out of the EU.

    And 5 to 10 points disputing “facts” that the pro-EU lobby puts forwards – Like 3 million unemployed is we leave the EU – where does that come from?

    Anybody got something like this?

    1. The Active Citizen
      January 13, 2016

      Know-Dice, good question. I’d hoped that one of the Leave campaigns would have produced a one-page summary before now. They haven’t, so I started working on one myself.

      Concise, bullet-pointed, credible, and designed to appeal to the widest cross-section of society, on one sheet of paper. Maybe JR would like to set us all a competition for the best entry, with a token prize? 🙂

    2. petermartin2001
      January 13, 2016

      @Know Dice,

      First of all I should say that you shouldn’t be quite so confrontational in your approach as to use terms like “stuff in the face”.

      Pro EU campaigners will probably come from the Lib Dems, the Labour Party and the what some would consider to be the more progressive wing of the Tory Party. So you’d need to tackle their arguments on their own terms. Simply ranting on about too many immigrants isn’t going to cut it with them.

      But they are more vulnerable when we argue that the EU isn’t a success even on the terms that it has defined for itself. Unemployment is much too high in most euro countries other than Germany and Holland. Democracy is being blatantly overruled. The collective punishment of the Greek people by being deprived of their bank accounts was appalling. There would, I hope, no question of that ever happening to Scottish account holders in the event of a serious dispute between the Scottish and Westminster governments.

      John Redwood has given a comprehensive list of 16 points here:

      So work through them rationally and select an argument to suit.

      1. Know-Dice
        January 14, 2016

        Thanks Peter,

        I was hoping that someone may have done this already 🙁

        JR asks the questions, but there are 125 answers…

        I shall hand over my document gracefully to anyone who appears at my door 🙂

  18. Denis Cooper
    January 13, 2016

    It’s not just that the other EU countries, especially some of those in the eurozone which are still on or over the edge economically, couldn’t afford to cut off trade links with the UK, doing that would run contrary to solemn treaty commitments which all the EU member states have made and which would still apply even if the UK was leaving the EU. There is currently a dispute between Poland and the EU over the rule of law, which in a way is quite amusing given the history of the EU in bending and breaking its own laws, but the other EU member states could not escape reputational damage if out of spite and stupidity they went back on those treaty commitments by seeking to impede the existing trade with the UK.

  19. Nig L
    January 13, 2016

    Excellent on both English votes and our contributions to Europe. Presumably Cameron didn’t think he would get any concessions if he asked our our contribution to be reduced so we are locked into ever increasing amounts to fund, for instance road, projects across the old Eastern Bloc and heritage renovation wherever you seem to look.

  20. Atlas
    January 13, 2016

    It is a pity that the Prime Minister, who claims to have such strong arguments for staying in, tries to rig matters. His is a typical political manoevure – but it dimishes him greatly.

  21. James Winfield
    January 13, 2016

    Which is why we need to stay in the EU to ensure the free market in services is completed.

    1. Denis Cooper
      January 13, 2016

      Or, perhaps, to ensure that the federalisation project is completed while we are waiting for the single market in services to be completed.

    2. Timaction
      January 13, 2016

      After45 years?? Hardly likely. Bit like their promise to reform the CAP in return for a reduction in our rebate. That was when Blair was PM. It’s a political project don’t listen the the rest, to create a federal Europe. Please read the 5 Presidents report. Not reported by our msm. Cologne anyone?

  22. Original Richard
    January 13, 2016

    Our economic relationship with the EU has always been an asymmetric one to our enormous disadvantage.

    We gave away our fishing grounds to the EU.

    We pay the EU £12bn annually (the net annual payment) to provide assistance to poorer EU countries.

    We allow more access to our market and companies than all other major EU countries.

    We provide jobs in the UK for a million or more EU workers giving them full access to all our benefits including for children who do not reside in the UK.

    So not only do we have a trading imbalance we also have vast sums of money earned by other EU nationals leaving the country to further worsen our balance of payments deficit with the EU.

    For purely economic reasons leaving the EU is a “no-brainer”.

    This is before we even consider the more important reasons to leave such as regaining our freedom and being able to control our borders whilst Germany unilaterally invites millions of Middle Eastern and African migrants into the EU and makes Turkey (75m people) a member of the EU.

  23. DaveM
    January 13, 2016

    I’m in Norway at the minute, and everything’s pretty rosy. My Norwegian friends tell me the only real problems they are suffering at the minute are as a result of the Schengen agreement! Hilarious.

  24. Anonymous
    January 13, 2016

    No-one in Britain is forced to buy French or German cars, washing machines, wine, cheese… but they are darn good !

    That’s probably the chief reason why we are in deficit to them. Because we like buying their great stuff.

    If only we had remained a fiercely proud and patriotic manufacturing nation instead of having the City flog it much of it off* for quick, wide-boy, bonuses. Then we might have made our own goodies to satisfy us and not be in so much debt.

    *I’m not talking industries ruined by unions but those sold off after Mrs Thatcher’s reforms.

    1. petermartin2001
      January 14, 2016

      “That’s probably the chief reason why we are in deficit to them. Because we like buying their great stuff.”

      This is not true when you think about it.

      Suppose we had a very good and very efficient economy A trading with a poor and an inefficient economy B. Would country A always be in surplus?

      Well no it wouldn’t. Why would country A always want to supply country B with lots of good stuff if country B couldn’t reciprocate? Country B couldn’t make them do that unless Country A wanted it to be that way.

      Don’t ask me why but country A, sorry Germany, has always manipulated its currency downwards to ensure it has a trade surplus. It used to do that just by creating extra DM to keep its currency cheap. Now it uses the euro and the weaker economies of the eurozone.

      1. Anonymous
        January 14, 2016

        Peter – We buy lots of their stuff and it is expensive, high quality stuff.

        1. petermartin2001
          January 14, 2016

          That’s true. But if the Germans had a currency at a value which reflected the strength of their economy it would be even more expensive and we’d be able to afford fewer of those things.

          If I raised sheep and you raised pigs and they were of equal value then it would make sense for us to trade say 5 sheep for 5 pigs on a regular basis. If you only wanted 4 of my sheep then you’d perhaps still give me 5 of your pigs and you’d take my IOU for future use. That might make sense just once or twice.

          But it wouldn’t make any sense to always take my IOU on every trade. You’d accumulate so many that I’d end up being unable to repay. But that’s exactly what the Germans do. They like accumulating the IOUs of others that they have no intention of ever using!

          If you have any German friends you might like to ask them why!

  25. petermartin2001
    January 13, 2016

    Well done for highlighting what is our largely forgotten and neglected deficit, ie the trade deficit. It’s arguably the more important of our two deficits – the other being of course the govt’s budget deficit.

    If the UK as whole is buying more from overseas than it is selling overseas, then that deficit has to be funded by borrowing. So, either the government has to do the borrowing or everyone else in the UK has to do the borrowing instead.

    George Osborne’s stated plan is that he wants the Government to do less borrowing. That’s really not a good idea unless the trade deficit is reduced so that everyone else can borrow less too. If he wants them to borrow more he should say so.

    The economics of the deficits isn’t a difficult concept. Yet, Conservative governments are so fixated on one to the extent that they almost entirely exclude the other.

    Why is this?

    1. Mitchel
      January 14, 2016

      @petermartin2001-“If he wants them to borrow more he should say so”.

      Well,he’s done everything possible to discourage saving,notably the change to pension fund access in order to keep consumption going.

  26. MikeP
    January 13, 2016

    John this whole area of trade imbalance is well understood it seems only to those of us who read your blog and the many Twitter feeds of those wishing us to leave the EU; we rarely if ever hear these stats from Ministers or the BBC and the rest of the media.
    What is so disappointing, though predictable, is that the Government’s position, echoed again by William Hague tonight, continues to focus on the bogus question of migrant benefit claims (which are a tiny proportion of all claims) and not the much more troubling areas to many voters, such as a lack of freedom to trade globally; Germany’s disproportionate strength in the EU; primacy of our laws and Parliament vs the ECHR/ECJ; protection against the EU favouring Eurozone countries against non-Eurozone countries; a cast-iron guarantee of the UK not being drawn into “ever-closer union”; and our borders and controlling who can legitimately come here.
    I wonder why ?

  27. Lindsay McDougall
    January 15, 2016

    There is an obligation to place advertisements for contracts above a certain size in the European Journal but there are ways around it. I once saw an ad in the EJ for the provision of cleaning services in Italy. It concluded ……. Italian language only …………

  28. Lindsay McDougall
    January 15, 2016

    Now that we have got our promised EU referendum and established the right of cabinet ministers to campaign for leave, is not the next logical step to say that we want a Prime Minister who will take a harder line in negotiations with the EU, i.e. will ask for a lot more.

    My point is simple enough. Over 70% of Conservative Party members wish the UK to leave the EU, so why are Eurosceptic Conservatives MPs not demanding that they run the show? A realignment of the Right in UK politics is perfectly possible, with the pro-European Tory Wets leaving and UKIP members rejoining the Conservative Party. As usual, we are far too deferential.

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