We will get a wage rise by leaving the EU

There is one feature of the Treasury’s ludicrous forecasts for 2030 that I agree with. They reckon in our out of the EU the UK will be better off in 2030 than today. Given the rate of technological change and the ability to work smarter and better in the years ahead, it would be surprising if we were  not better off.

The issue in dispute is will be even better off if we leave or stay?  2030 is too far ahead to be sure. Whichever route we choose, we will never be able to answer that question definitively, as the country can only live one of the two options. I do think it more likely we will be better off out, for the many reasons I have set out in recent weeks on this site.

It is easier forecasting the next two or three years. Forecasting the next fifteen is just about impossible. Will China be the world’s largest economy in 2030, still growing well, or will there have been a China crisis as some fear? Will there be major new breakthroughs in technology, or will still be adapting and using the main internet, materials and biotechnologies we already know about? Will the world comfortably absorb the huge supply of potential labour from the poorer countries, or will there be difficulties in spreading wealth and incomes more widely?  Will political tensions in the Middle East, in the China Sea and elsewhere remain contained?

It seems likely that if we leave the EU we can look forward to a better pay rise at the bottom end of the pay scale than if we stay in. Lord Rose, the Chairman of Remain, said as much in a rare honest forecast from that campaign. Assuming a post Brexit government does take control of our borders and impose sensible and effective controls on EU migrants wanting to come to take low paid jobs, we will remove some of the downwards pressure on wages.

We will also have £10bn a year to spend at home that we have to give way to EU in contributions we don’t get back. This will enable us to hire more people for the NHS and schools who will tend to be better paid people with more skill. This also helps boost UK family incomes as we train more nurses, doctors and teachers and get them into employment.

There is also the stimulus effect of the first post Brexit budget, spending that money and removing VAT on fuel to increase  people’s spending power. That too will boost incomes and help create more jobs as the money circulates through our economy instead of being paid away. The left has often called for more so called fiscal stimulus. They want the state to spend more to create activity and jobs. That is exactly what we can do if we reclaim our own money to spend on our priorities.

 

(A longer version of this has appeared as an article in City am)

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79 Comments

  1. Dame Rita Webb
    Posted June 5, 2016 at 5:25 am | Permalink

    What a load of cobblers to talk about rising incomes. In or out of the EU, nearly half of UK citizens will pay no income tax. On top of that there has been no elimination of non contributory benefits. So if incomes do rise, you can bet your bottom dollar, there will be a continuing increase in tax on those still working. It thats not the case look at the historic progression of those being brought higher rate tax. Also how are incomes going to rise if the “highly skilled migrant visa” (aka wage cutting for the British worker) program remains in place?

    • Dame Rita Webb
      Posted June 5, 2016 at 6:59 am | Permalink

      And how are they highly skilled? How are there gaps in the workforce that barbers and nail “technicians” need to be imported from outside the EU? My former employer liked to use Indian IT workers (making the British ones redundant) they are regularly in the press for their systems breaking down and leaving their customers annoyed.

      • Lifelogic
        Posted June 5, 2016 at 9:19 am | Permalink

        It is not so much that employers “like” to use Indian IT workers (for example). In a competitive market they probably have or their customers simply go to other businesses that do and they go out of business and this would hardly help their employees.

        Politicians (and many people working in the state sector) so often totally fail to understand this.

        • Hope
          Posted June 5, 2016 at 7:17 pm | Permalink

          EU citizens have an absolute right to enter the UK whether in work or not, whether a mass murderer or not, whether a criminal or not, whether under supervision or monitoring by their justice systems or not, some under arrest might not.

          Major seems to have given leave to the little senses he had and his poor memory fails him that he cost jobs, mortgages to rise, business to go bust because of HIS fanatical dram to join the Euro and be a region of the Ezu superstate. Has he not been reading and seeing Merkel’s negotiations with Turkey without recourse to any other nation state, then when it went tits up after inviting a million to Germany insists every country in the EU share the burden? He talks of squalid dishonest campaigning. He needs to look in t he mirror because his comments apply to himself. Traitor to the country and a man who clearly does not believe in self democratic government who wishes foreigners rule our country. His (word left out ed) personal behaviour not mentioned by Marr or himself, we must feel sorry for his poor old wife. etc ed

          • forthurst
            Posted June 6, 2016 at 10:46 am | Permalink

            As the polls move towards the patriotic position, the traitors who have been promoting the dissolution of our great nation into the dysfunctional failing EU superstate with their entirely dishonest Project Fear have now in their desperation resorted to Project Smear. Personally, I always regarded Major-Ballsup a nasty piece of work.

    • Dioclese
      Posted June 5, 2016 at 7:52 am | Permalink

      Assuming – unlikely that it is – that the lower paid get pulled into the tax net by a rising wage, is it not better to have more money and pay some tax on it that to have no more money at all?

      Plus we’re not suggesting that wages will rise at the upper end as well as a result of Brexit. Low cost Eastern EU labour doesn’t effect the other end of the scale

      I fear your logic is flawed.

      • Dame Rita Webb
        Posted June 5, 2016 at 10:43 am | Permalink

        Even outside of the EU you are still going to be confronted with a declining tax base and increasing demand for state services/handouts. Its arithmetically impossible to keep borrowing forever, as currently happens, so the talk of workers having more money to spend is absurd

    • bigneil
      Posted June 5, 2016 at 8:15 am | Permalink

      Don’t forget the foreign criminal, come here and destroy someone’s life and be rewarded with a free everything on-the-taxpayer for life program. Never have to work, learn the language if they feel like it – and laugh at all the workers rushing about to earn the foreign criminals (do nothing except breed more kids for us to keep) life. Our justice system knows how to punish !!! Just like the ?….gangster/murderer/drug dealer – £2k a month and NHS for getting here illegally. He’s a hell of a lot better off than me – I only worked for 45 yr and paid in. Makes me proud to be English – sarcasm – -real real sarcasm.

    • Hope
      Posted June 5, 2016 at 8:23 am | Permalink

      I see Major talking rot again on Marr. Has his memory failed him what misery he caused to the UK economy and personal misery he caused to people like me by making my mortgage payments soar through the roof, loss of business and mass unemployment. He w responsible for a recession. Now he is. Along leave campaigners ” ..dishonest, squalid, deceitful…” What a horrible dishonorable person he is. This traitor will say or do anything to stay in the EU!

      • Know-dice
        Posted June 5, 2016 at 9:17 am | Permalink

        Boris did well though, except towards the end of the interview Marr did lose it a bit [lot] especially not allowing Boris to even half answer questions put to him by Marr.

        • Lifelogic
          Posted June 5, 2016 at 12:30 pm | Permalink

          Where as Major was interview in the usual Marr way to a remainer – what words of wisdom would you like to impart to the nation next Sir John.

      • DaveM
        Posted June 5, 2016 at 9:28 am | Permalink

        How about someone actually publishing what (some of the grandees for Remain ed) et al actually get from the EU and what they stand to lose in te event of a Leave vote? It might sound a bit smear-campaignish, but what’s good for yhe goose….

      • Anonymous
        Posted June 5, 2016 at 9:53 am | Permalink

        The £350m a week claim has to be nailed one way or the other. Whether we like it or not it has become the key economic issue.

        The best argument I’ve heard yet is from Dan Hannan “People never tell you what their net Council Tax is when you ask them. They don’t deduct services they get from their bills.” (from memory.)

        This is the rationale behind using the gross figures.

        The other issue which Mr Gove failed to bat off was on the “90% of economists disagree with you.” But only 17% of economists responded to the survey ! Instead Mr Gove took the line that “Economists are usually wrong.” which is not so convincing.

        • Jerry
          Posted June 5, 2016 at 1:20 pm | Permalink

          @Anonymous; Not sure that Mr Hannan’s ‘explanation’ helps very much at all, in fact (as usual with interventions by Mr Hannan) he has mudded the waters again – or at least your version of what he said has. 🙁

          The argument is about what the EU costs the UK, not what we get from paying the membership fee or what the cost might have be in some other scenario. For example, if you wanted your car serviced and decided to use an independent garage that offers discounted menu-based servicing, using non OE parts, you would talk about what it actually costs you to get your car serviced, not what the cost would have been had you paid main dealer labour and parts prices.

          The debate is about the actual cost of the product (EU membership) to the UK, not the RRP…

          • Anonymous
            Posted June 6, 2016 at 8:24 pm | Permalink

            Jerry – See Denis Cooper’s reply below.

        • Denis Cooper
          Posted June 5, 2016 at 2:07 pm | Permalink

          I’ve previously said that if I was going to use a gross figure for a simple slogan then I would base it on the gross contribution after abatement, but it is too late to change that now and in any case the £350 million a week figure is not necessarily more misleading than other figures being bandied around.

          The reality is that the official financial interactions between the UK and the EU are complex, far too complex for anybody to properly understand unless they spend a lot of time carefully looking into it – and that is actually a point which the Leave side should be making, in my view.

          For example Thatcher is often misquoted as saying: “I want my money back”, and on the face of it that is what she got, because some of the money which has been paid in one year is paid back in the next and possibly following years.

          The complicated way that works is explained here:

          https://en.wikipedia.org/wiki/UK_rebate#Calculation_and_mechanics

          “Broadly, the UK gets back 66% of the difference between its share of member states’ VAT contributions and its share of EU spending in return … The calculation of the rebate for any one year is budgeted and paid for the following year, and the payments are subject to revision for up to three further years.”

          So when this Remain supporting website:

          http://infacts.org/petitions/uk-not-send-350m-week-brussels/

          says

          “Margaret Thatcher secured a discount on our payment to the EU”

          that is not really correct; what she secured was not an upfront discount, but a retrospective refund because the daft system meant we had paid in far too much during the previous years – another point the Leave campaign should be making.

          In my view the Treasury select committee was wrong to home in on the mere mechanics of payment and criticise the £350 million a week figure because the refunds from previous years are deducted from the payments for the current year before they are made, arguing that therefore the money never leaves the country.

          That is no more valid than arguing that we don’t send £350 million a week to the EU because the payments are actually made monthly, it is just a quibble.

          • Anonymous
            Posted June 6, 2016 at 8:26 pm | Permalink

            Thanks Denis.

        • Lifelogic
          Posted June 5, 2016 at 4:42 pm | Permalink

          Sound economists think Brexit will be good, especially the ones who predicted the disasters of the Erm and EURO

      • yorkshirelad
        Posted June 5, 2016 at 3:22 pm | Permalink

        Thanks for your comment, you are spot on! I remember the pain of those years until we exited the ERM. I had moved, with my job and wife and three children to NW London from Yorkshire. We bought a house 2.5 times more expensive than we had sold, but very much a step down. our mortgage rose to almost half my monthly salary. In panic we tried to sell but couldn’t; we were saved by exit from ERM. I wouldn’t trust Sir John’s judgement on Europe. I am not political, was unsure which way to vote but have moved to leave; more convinced by the day.

  2. hefner
    Posted June 5, 2016 at 6:53 am | Permalink

    Everything is told in the last line of this post: A longer version of this has appeared as an article in City am. What we got today is the rather deluded view of one close to the richest in the land, who does not have to worry for his future pension, and can talk and talk: Apres moi le deluge!

    • Denis Cooper
      Posted June 5, 2016 at 9:45 am | Permalink

      Why not prove the “rather deluded view” part, rather than making it personal?

      • libertarian
        Posted June 5, 2016 at 10:04 am | Permalink

        Denis

        To be fair hefner is an expert on deluded views

  3. Brian Tomkinson
    Posted June 5, 2016 at 7:16 am | Permalink

    Interesting that since Lord Rose, Chairman of Remain, made that forecast, which I believe was to a House of Commons Select Committee, he has not been heard nor seen since.

    • Lifelogic
      Posted June 5, 2016 at 9:20 am | Permalink

      Well telling the truth on the remain side is indeed a deadly sin.

      • Lifelogic
        Posted June 5, 2016 at 12:32 pm | Permalink

        Next thing he will be telling us the EU is careering towards a single anti-democratic super state – if he keeps telling the truth!

  4. Antisthenes
    Posted June 5, 2016 at 7:19 am | Permalink

    I do not have a problem with the free movement of EU labour and I do not think higher wages is an economically sound idea without the accompanying rise in productivity. I do have a problem with open ended welfare for new comers to the UK. No welfare or healthcare without contribution would satisfy me. I understand why you push the higher wages theme especially at this time but I am sure you can see in practice it is not the best of ideas as we have enough anti competitive issues already.

    • Denis Cooper
      Posted June 5, 2016 at 9:49 am | Permalink

      What about open ended welfare for young Britons who have never had jobs and so have also made no contribution? That is also at the expense of the taxpayer.

      • Antisthenes
        Posted June 5, 2016 at 10:04 am | Permalink

        If we stay in the EU then to introduce the policy I advocate then it would have to apply to the British people as well. However perhaps a case could be made if British parents have made contributions up to the age young Brits are eligible for welfare they would get them. If we remain it remains highly problematic. If we leave of course we can have any rules we like.

      • DaveM
        Posted June 5, 2016 at 12:22 pm | Permalink

        Quite right. All these badly paid jobs that only foreigners will do etc. No work (if it’s available) should equal no money. Once again an example of weak hand-wringing politicians. The same ones who would rather prosecute parents than bite the bullet and tackle greedy holiday companies. Anything for a quiet life and a fat EU-sponsored pension. Pathetic. Lions and Donkeys.

      • Jerry
        Posted June 5, 2016 at 2:05 pm | Permalink

        @Denis Cooper; Indeed, but that is not the fault of migrants, or the employers in many cases, those words of Lord Tebbit (about his father search for work in the 1930s) are as relevant today as they were back in the 1980s when he delivered that speech, if someone really wants to find/have a job they will find one.

        • Edward2
          Posted June 5, 2016 at 8:19 pm | Permalink

          Have you moved hundreds of miles away from your home town Jerry?
          Or is it OK for everyone else to up sticks in search of work.

          • Jerry
            Posted June 6, 2016 at 8:27 am | Permalink

            @Edward2; I have not had to but I know British people who have, sometimes with families. Oh and how many school leavers do so in effect when they go to University [1], they move area, and often live in HOMO’s, so why can’t those of the same age group who are looking for work do so – assuming of course that they actually want work.

            If physically fit British youth (18-30) are not prepared to do the work then either the employers simply have to ‘shut up shop’ or they recruit from some place else, in this case eastern European migrants. What would you prefer @Edward2 ?…

            [1] never mind if they join one of the Army etc.

          • Edward2
            Posted June 6, 2016 at 9:47 pm | Permalink

            Its not easy if you live in social housing to move hundreds of miles away in the hope of finding a job.
            Also if you are a single parent with one or more children it is even more difficult.
            I think most people want to have a job and earn their own money but if you are at the margins, work sometimes does not pay.
            Competing with new arrivals willing to work for min wages living in HMOs has made it even more difficult.

          • Jerry
            Posted June 7, 2016 at 5:46 am | Permalink

            @Edward2; It is when employers are offering accommodation, as is the case with some of the jobs I’m talking about. As for making work pay, isn’t that what tax credits etc. are all about, heck if the wages is as poor as you say then these people will have their rents paid for them to, just as they are whilst sitting on JSA if they are not staying at the Hotel of Mum and Dad of course…

            Oh and as for your last comment, what do you not understand, if such British people were prepared to do this work there would be less ‘new arrivals’ (by which you mean presumably mean migrants), stop mixing up cause and effect!

        • Denis Cooper
          Posted June 6, 2016 at 9:53 am | Permalink

          I didn’t say it was the fault of migrants; apart from those who are in the country illegally, who should be deported, and the small minority of legal immigrants who behave badly, I see them as blameless.

    • Iain Moore
      Posted June 5, 2016 at 10:48 am | Permalink

      Which came first , the productivity or the pay rise?

      Without the incentive to invest in productivity it is unlikely there will be any. When the Black Death reduced our population by a third, it forced massive changes in our agriculture and its productivity, a fore runner of the industrial revolution.

    • forthurst
      Posted June 5, 2016 at 12:57 pm | Permalink

      “I do not think higher wages is an economically sound idea without the accompanying rise in productivity.”

      Are you suggesting that wages of plumbers should remain the same for ever or even be reduced for ever by continually importing them from poorer and poorer countries? For many tradesmen, once they have become fully proficient, they can only improve their productivitiy by cutting corners.

      JR, very bravely, made a pitch yesterday for ‘investment’ bankers: so far as many people are concerned these people do not produce a social good, but rather they barge into markets in which they should have no legitimate presence, holding long and short postions which simply creams wealth from producers and users; they sell products which are so toxic that they have caused an international banking crash.

      The market should be the servant of all the people not the other way round. People with skills which are in demand deserve a fair wage commensurate with the high cost of living in the UK; leaving the EU and adopting points based immigration system will achieve that.

    • Anonymous
      Posted June 5, 2016 at 5:24 pm | Permalink

      Antisthenes – Can you not understand the concept of wage depression ?

      The public clearly do and this is why we’re having a referendum and why Brexit is now ahead.

      Wages are nothing to do with how hard you work or how much responsibility you take – it’s about how many people are able and prepared to step into your shoes. Ask any bus driver.

      Mass migration makes no economic sense whatsoever with a welfare system in place.

      It is cripplingly expensive as we can see in our national debt and deficit figures.

  5. Lifelogic
    Posted June 5, 2016 at 7:40 am | Permalink

    As you say it is impossible to predict for certain but one way we can have:

    A nimble & democratic government acting in the UKs interest rather than those of the EU bureaucrats.
    No huge EU fee to pay.
    Away from the EURO disaster and bail outs
    A bonfire of the hugely damaging red tape.
    A half priced sensible & reliable energy policy.
    Selective quality immigration under democratic control.
    No health or benefit tourism.

    If we stay they will walk all over the UK, even more than they do already. The city will be at huge risk of EU legislative attack. Norway, Switzerland certainly do not want to join the EU, far preferring their existing deals. The UK deal will be far better than theirs, given the large trade imbalance.

    As Alastair Heath puts it:

    It’s self-evidently normal to be independent and prosperous: just look at America, Australia, Canada or Singapore. But there are no known examples of a previously independent democracy being subsumed into a dysfunctional, economically troubled technocracy and doing well as a result. As mad gambles go, it is hard to think of anything worse.

    http://www.telegraph.co.uk/news/2016/06/01/there-is-no-safety-inside-the-arrogant-imperial-and-dangerously/

    • Lifelogic
      Posted June 5, 2016 at 7:47 am | Permalink

      For Brexit, or if you just want a better deal, we must vote Brexit.

      The vote is really: Do you think Cameron’s worthless deal is good enough or not.

      Surely not even Cameron can think his non deal is good enough can he? It does not even give us any control over who can and cannot live in the UK.

  6. Jerry
    Posted June 5, 2016 at 7:43 am | Permalink

    Oh right, so wages will rise, that means we will have to pay more for British made goods and services, so it’s back to the the future, back to a 1970s style economy!

    Well at least importers of EU and Chinese made stuff will be laughing all the way to the their banks, why would anyone buy a British made product or service when they can save themselves money buying cheaper imports/offshore – quite possibly direct, so not even UK middle man or woman earning their daily crust either like before. Once again the UK’s main export will be jobs.

    What ever happened to the “market forces” mantra, if it doesn’t apply now then it probably never did and thus another plank of 1980s right-wing political dogma bites the dust…

    ” Given the rate of technological change and the ability to work smarter and better in the years ahead, it would be surprising if we were not better off.”

    But if you’re correct, that means there will be less people doing the work of many, as such technology takes over, so unless you intend to tax those who are working at a far higher level how will the nation afford to pay the now unemployed to not work, even more so if we start pricing UK made goods etc out of the market due to the above suggested wage raises.

    The Brexit campaign is falling off the rails with puff pieces like this, scribed to appeal to a very small section of society, just how many read City AM, how many even know of its existence? It was written for City AM and that is were it probably should have been put to bed.

    Sorry.

  7. alan jutson
    Posted June 5, 2016 at 7:46 am | Permalink

    George Osbourne has a problem getting 1 year forecasts correct, as has almost every Chancellor in the past 3-4 decades.

    These sort of wild forecasts into the future are simply guesses, some are educated, some are no more than pie in the sky wishes.

    Your posting a couple of days ago about technological change and development outlined the problem of trying to forecast too many years ahead.

    IF all economist were as good as some politicians suggest and argue, why are so many Countries in worse debt now than just 10 years ago ?

    If Companies can see that well into the future, why has their share price been almost static for the past 10 years.

    Commerce and trade can change in a flash, that is why it will be good to be able to act quickly, on our own we stand a chance, lumbered with 27 other Countries in the EU with the huge amount of National conflict that exists within it, we would be unlikely to do so.

    • Lifelogic
      Posted June 5, 2016 at 9:25 am | Permalink

      George Osborne clearly does not understand business, economics, competitive markets, supply and demand or any of the things he needs to be a competent chancellor.

      This is why we have a record trade deficit, absurd wage controls, a sugar tax, IHT ratting, hugely high taxes, pension, landlord and tenant mugging taxes, absurd tax complexity and still a huge deficit.

      Vote Brexit and be rid of him.

  8. Iain Moore
    Posted June 5, 2016 at 8:19 am | Permalink

    A reduction of cheap labour , Channel 4 news estimated that 80% of EU migrants wouldn’t make the immigration criteria which non EU immigrants have to meet, would force employers to invest in productivity.

    When ever I hear people claiming that we need migrants to break their backs in the fields for a pittance, I always wonder why these jobs haven’t been robotised/automated, then quickly realise its because the of the plentiful supply of cheap labour . Perhaps when we leave there will be an incentive to get on with the next agricultural revolution that should have happened decades ago.

    • Know-dice
      Posted June 5, 2016 at 9:20 am | Permalink

      ” I always wonder why these jobs haven’t been robotised/automated,

      Maybe because investment money has gone to our competitors – like Spain…thank you EU…

      • Jerry
        Posted June 5, 2016 at 2:22 pm | Permalink

        @Know-dice; Or that such jobs simply can not be robotised/automated, and never will be – until AI has been perfected along with the equivalent artificial versions of the human senses; touch, sight, hearing and smell (singularly or in any combination).

    • Lifelogic
      Posted June 5, 2016 at 9:27 am | Permalink

      Exactly employers will do what works best. If labour is cheap that is the way they simply have to go to remain competitive.

      But GDP per cap, living standards and productivity thus decline.

      • Denis Cooper
        Posted June 5, 2016 at 12:25 pm | Permalink

        Oddly enough one of Labour’s arguments for a minimum wage was that it would force companies to invest and improve worker productivity.

  9. Richard1
    Posted June 5, 2016 at 8:20 am | Permalink

    This pay rise for Brexit strikes me as nonsense. We have c 200k non-EU immigrants pa today, though a Conservative govt has complete control over these. Mr Farage says we should have total immigration of 30k, EU and non EU combined. If there is a ‘pay rise’ in such an event then it will be because we have to pay more for taxis as there arnt Uber drivers, back to the bad old days of shoddy workmanship in the building sector for rip off prices because there’s no competition from Poles and others etc. Who’s going to work in the food and hospitality services sector? Has anyone reading this been waited on by an indigenous Briton in a London restaurant during the last 10 years? I haven’t. I guess we’ll just have to pay much more for that as well, probably also for worse service.

    What’s the answer on immigration – how much net immigration do Leave think we should have? If it’s ’10s of thousands’, what sort of people amongst the 2m or so who’ve come in since the coalition / Conservative govt took office would we be better off without?

    • graham1946
      Posted June 5, 2016 at 10:17 am | Permalink

      We need a break from immigration. It has been too many, too fast and we cannot keep importing just so your restaurant bills are lower. We have more population than we can handle, health, education, pensions etc. already. These people who are here are not going away. Most will stay and form relationships and have families, get sick, get old and retire. Immigrants are more fertile, are used to having big families and are already producing more children than the British population. It can’t go on, not just here, but worldwide and one day politicians will have to find a solution.
      Low wages are not the answer. We British are intensely snobbish and tend to look down on those jobs such as waiters or street cleaners who are actually more essential than some executives in a FTSE companies as we have seen in the past when rubbish piles up and bodies remain un-buried. We don’t want to get our hands dirty at all and a lot of this springs from school where children are given a false idea of the world of work, mostly by teachers who have never left school and that everyone is a manager. Hence we get lots of rubbish degrees offered at Universities, just to take up the numbers wishing to go, but who don’t have the brains to be there.We need increases in wages at the bottom which will be spent in the economy. Low earners will spend their money. High earners tend not to in the same way.
      I remember a similar situation back in the 60’s and 70’s when wages were low and there was no incentive to invest. I can hear now an industrialist on the radio saying ‘ When we are making a loss we can’t afford to invest and when we are making a profit we don’t need to’ . I think this was in the car industry, just before they got trounced by the Japanese and we went through those bad years. If big populations and low wages was the answer, all the poverty stricken nations of the world would be prosperous.

    • Ian Wragg
      Posted June 5, 2016 at 1:51 pm | Permalink

      We do not need half a million immigrants annually. You get to a point where immigrants are servicing immigrants.
      How may foreign children require us to build more schools thus importing more foreign builders.
      How many more doctors appointments or A&E visits require us to import more foreign NHS staff etc etc.
      There is a recession due very soon and there will be job losses. How many of these non taxpaying will return home.
      My guess not many. Most will sign up for housing benefit etc and the welfare bill will soar.
      The government will then try to reduce our pensions to pay for it.

    • Anonymous
      Posted June 5, 2016 at 5:09 pm | Permalink

      Richard 1 – It doesn’t matter that you think the issue is nonsense.

      75% of the population don’t want it and a referendum on the EU has been forced over it. It doesn’t matter if they’re right or wrong.

      The rest of your comment is racist and ignorant. I’ve been served very well by plenty of English people.

      • Richard1
        Posted June 6, 2016 at 8:31 pm | Permalink

        What a stupid comment. I am pointing out that the vast majority of people working in the food service sector are immigrants, this is not ‘racist’, it’s an argument against your UKIP style anti immigration arguments.

  10. Denis Cooper
    Posted June 5, 2016 at 8:27 am | Permalink

    “Given the rate of technological change and the ability to work smarter and better in the years ahead, it would be surprising if we were not better off.”

    Well, since 1956 – and possibly before then – the long term trend growth rate of UK GDP has been 2.5% a year, and looking at this chart:

    http://www.tradingeconomics.com/united-kingdom/gdp-growth-annual

    it would take the eye of great europhile faith to detect when we joined the EEC or when the Single Market was created.

    Their effects, one way or the other, have been imperceptible; and that is not so surprising given that it was originally projected that the Single Market would add about 5% to the collective GDP of the member states, but in fact it has achieved only 2% – that has been stated by the EU Commission and accepted by the UK government – and according to this report:

    https://www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/Policy-Brief-Binnenmarkt-en_NW_02_2014.pdf

    the UK is one of the countries which has gained the least benefit, about 1%.

    We are talking about a one-off boost to GDP of only 2% at most, spread over a number of years, superimposed on the natural economic growth which exceeds that boost in just one average year, indeed possibly in just six average months, which is mainly down to steady technological advance and improved efficiency and not to trade liberalisation.

    It is a bit of a puzzle that the Treasury predicts that we would lose far more if we left the supposedly vital EU Single Market than we have ever gained from it.

  11. oldtimer
    Posted June 5, 2016 at 8:30 am | Permalink

    Listening to Sir John Major on Marr he claims the Leave campaign is “deceitful”, that the net cost to the UK is “one third” of what the Leave campaign claims. Yet the OBR states that this year, 2016, the gross cost will be £19.6 billion, the net cost £11.1 billion. I work that out at 56.6% not one third! Sir John says he is “angry”; listening to him makes me very angry.

    • Lifelogic
      Posted June 5, 2016 at 9:43 am | Permalink

      Marr, as usual, gave him an absurdly easy time. What would you like to say next prey Sir? This is the man who, as Chancellor, took us into the ERM, destroyed the economy and never even had the decency to apologise. Nor even did he learn anything from the experience. He would have taken us into the diasterous EURO too, but for the failure of his ERM.

      He won one election (as people thought he was a Thatcher replacement) but then buried the Tories for 3+ terms when they realised what a complete disaster he actually was. He said – if we come out of the ERM interest rates will have to rise shortly before we did come out and they fell like a stone.

      In this interview he even threatened the Brexit side, by implying the EUphile Tories would not accept the result!

      Major is a compass that is reliably 180 degree out. He even said in the interview that Cameron, in his renegotiation, had restored his “subsidiarity” it was a lie then and is now.

      Donner moi un break si vous plaît.

      Sir John you have done quite enough damage to the country and the Tory Party – just go away, retire and keep quiet please.

  12. acorn
    Posted June 5, 2016 at 8:38 am | Permalink

    Breaking news!!! John Redwood MP, abandons out-of-date, neo-liberal economics’s “monetary austerity model” saying “The left has often called for more so called fiscal stimulus. They want the state to spend more to create activity and jobs. That is exactly what we can do if we reclaim our own money to spend on our priorities.”

    Note: Neo-liberals do not recognise, never mind understand, fiat currency fiscal theory. Mind you, Mario at the ECB has had a bit of a Road to Damascus conversion; like JR.
    Have a read of “Draghi warns Eurozone govts not to rely on monetary stimulus By Jessica Tasman-Jones”. The ECB’s “accommodative monetary policy” needed support from structural and fiscal policy, he said. (structural = more unemployment to suppress wages.)

    The last eight years have proved conclusively that monetary policy does not work, somebody tell the Troika. Swapping government debt paper, back into the “reserves” that bought them originally; does not create additional commercial bank lending, banks don’t lend “reserves” except to other banks. And, reserves don’t create inflation. Have a read of “ECB’s expanded asset purchase programme – more smoke and mirrors”

    • sjb
      Posted June 5, 2016 at 3:32 pm | Permalink

      Regarding ‘our priorites’, I thought the ‘£350m’ saving was already earmarked for the NHS: see Vote Leave’s first referendum broadcast – a “brand new hospital every week” (albeit with fewer staff).

      A Yorkshire farmer on Andrew Neil’s show (regional bounce section) did not seem too bothered about losing EU subsidies; he said they went to landowners. When he said leaving the EU would enable him to sell more abroad, I immediately thought of the British beef and lamb that the US still refuse to import because of the BSE crisis over twenty years ago. In contrast, other EU member states have to accept our beef and lamb following a European Court of Justice judgment – that’s the “rogue court” according to our learned Lord Chancellor Gove this morning on Peston’s show.

  13. agricola
    Posted June 5, 2016 at 9:08 am | Permalink

    Well we now know where the sympathies of Andrew Marr lie regarding Leave or Remain. We sat through an interview with John Major in which Marr allowed an unquestioned stream of inaccurate rubbish in favour of the EU. We then had to put up with an interview with Boris Johnson in which Marr constantly interrupted, interjected ,and made a nuisance of himself with the express intention of stifling any Leave argument. His bias disgusts me.

    • Jerry
      Posted June 5, 2016 at 6:24 pm | Permalink

      @agricola; Always best to check the transcripts and interview length before making accusations of bias, reading the transcript of both interviews is very interesting, as is checking actual interview times, at least to those without a closed mind on thre matter.

      The transcripts can be found here:
      Major;
      http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/05061601.pdf

      Johnson;
      http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/05061602.pdf

      Programme on iPalyer here;
      http://www.bbc.co.uk/iplayer/episode/b07gb99n/the-andrew-marr-show-05062016

      • Edward2
        Posted June 6, 2016 at 7:16 am | Permalink

        I had a listen and I agree with agricola.
        Major was afforded a much easier interview.
        Boris was interupted more mid reply.

        • Jerry
          Posted June 6, 2016 at 12:48 pm | Permalink

          @Edward2; Your perceptions prove noting (other than your own bias perhaps…).

          “Boris was interupted more mid reply.”

          No he wasn’t, read the transcripts, he only appears to have been interrupted more because he had more interview time;

          Mr Major’s interview;
          Starts at 00:19:37:xx
          Ends at 00:35:10:xx

          Mr Johnson’s interview;
          Starts 00:40:46:xx
          Ends 00:58:09:xx

          HH:MM:SS:FF

          • Edward2
            Posted June 6, 2016 at 9:48 pm | Permalink

            As you say
            Its perception.
            But you are not biased….

          • Jerry
            Posted June 7, 2016 at 5:53 am | Permalink

            @Edward2; No, I quoted the facts, trouble is you either do not understand them or do not wish to accept them, I strongly suspect the former.

            What ever…

  14. Anonymous
    Posted June 5, 2016 at 9:08 am | Permalink

    Mail on Sunday says otherwise about wages (Dan Hodges)

    Mail on Sunday says Brexit is being hijacked by the far right.

    Mail on Sunday’s Peter Hitchens doesn’t want to vote in the EU referendum.

    • DaveM
      Posted June 5, 2016 at 1:07 pm | Permalink

      Mail on Sunday always opposes the Daily Mail.

    • Ian Wragg
      Posted June 5, 2016 at 1:56 pm | Permalink

      Mail on Sunday has been drifting to Remain for some weeks which is surprising seeing as the Daily Mail seems to favour Brexit.
      Who cares what Peter Hitchens does he used to be a rabid communist.

  15. Bert Young
    Posted June 5, 2016 at 9:14 am | Permalink

    Fortune tellers and economists are in the same boat ; they want you to be convinced they are right but they never subsequently admit they were wrong . The one thing where Osborne made a major mistake was in the introduction of the minimum wage ; if employers wish to attract employees of a certain degree of background and skill , they have to offer a deal that is competitive .Pricing a product and service builds in a labour cost factor – if it is pushed beyond its formula setting , savings have to be made elsewhere or the product and service is withdrawn .

    If Brexit succeeds employers will be given the opportunity to sell their products and services wherever there is a market ; the world is a big place and most of it wants change and development . We have always been capable of innovating and producing leading edge services and products – this has been proven over centuries and often against tough opposition – it will be no different in the years to come . In the 25 years of my business it spread from a single office in London to an international organisation of 10 offices throughout Europe , the USA and the Far East . Competition was rife and always good ; we certainly were kept on our toes .

  16. Denis Cooper
    Posted June 5, 2016 at 9:16 am | Permalink

    I’m sure that if Cameron and Osborne wanted to leave the EU then the Treasury could easily produce very reassuring predictions for the economic effects. But having been told “We want some terrifying numbers to quote”, that is what the Treasury has supplied.

    With all the media fuss about whether or not Leave campaigners are correct to claim that our gross contribution to the EU budget is £350 million a week it has been missed that the Treasury select committee also criticised the government’s £4,300 number and said that it should be cut back to only £1,600 – on page 21 here:

    http://www.publications.parliament.uk/pa/cm201617/cmselect/cmtreasy/122/122.pdf

    However that is still on the basis of the Treasury’s central prediction that we would lose 6% of GDP if we left the EU, which is disputed in this interesting article:

    http://www.independent.co.uk/news/business/news/eu-referendum-why-the-economic-consensus-on-brexit-is-flawed-a7057306.html

    “EU referendum: Why the economic consensus on Brexit is flawed”

    “A former senior International Monetary Fund economist says the arguments that leaving the EU would cause permanent damage to the UK are not supported by evidence”

    “So how do the Treasury, OECD and the IMF conclude that Brexit could reduce GDP by between 6 and 10 percent forever? The vast bulk of those large estimates come from the further assumption that reduced trade will shrink British productivity growth. This is disingenuous. There is simply no evidence that less trade lowers productivity growth – and there is not even a logical connection between productivity growth and a shift in trade from Germany to the United States.

    More trade has been associated with higher productivity growth when countries have emerged from economic isolation. But for the sophisticated British economy, this possibility should be completely dismissed.”

    I don’t know enough to firmly pronounce upon the truth of this claim, I will just say that it seems to make sense given the empirical observation that greatly increased trade with our European neighbours has had no perceptible effect on our economic growth rate.

    • acorn
      Posted June 5, 2016 at 5:09 pm | Permalink

      Denis, the most recent set of figures are available in the “Pink Book”. The gross payment into the EU was about £19.1 billion; about £367 million a week, (the headline £350 million a week figure Boris is using).

      The government sector receipts from the EU yield a NET contribution to the EU of about £9.2 billion for that year. That is £178 million per week. What is not clear is if the £1.4 billion that is paid to the non-government (private) sector, is included in the ONS data, usually it is not. If not, the net subscription to the EU machine would be £7.8 billion, £150 million per week.

      • Lindsay McDougall
        Posted June 6, 2016 at 10:22 am | Permalink

        I have no objection to deducting our rebate of about £5 billion pa from our gross contribution. I have every objection to deducting the £5 billion that the EU spends in this country. If you consider that much of it is spent in a way that is not useful to us, and think of the bureaucratic and sticky fingers overheads that are a feature of most EU expenditure, the amount that we should deduct from our gross contribution on this account is something much less than £5 billion.

        The way that I do the sums is:
        – Gross contribution £19 billion pa
        – Rebate £5 billion pa
        – Useful EU expenditure in UK £2.5 billion
        – Net contribution £11.5 billion

        On Brexit, we will have increased fishing revenue but will have to pay tariffs on goods exports to EU-27. The two amounts rougly cancel each other out.

      • Denis Cooper
        Posted June 6, 2016 at 11:19 am | Permalink

        The most recent final numbers are for 2014, those for 2015 still being only forecasts, and according to the House of Commons Library they are as follows, in £billions:

        http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06455

        Gross contribution 18.8
        Rebate – 4.4
        Total contributions 14.4
        Total public sector receipts – 4.6
        Net contribution 9.8

        Following up his reference, the author of that Research Briefing for MPs and their staff has taken those numbers straight from the table on page 14 of this December 2015 Treasury document:

        https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483344/EU_finances_2015_final_web_09122015.pdf

        where it says:

        “Gross Payments”

        and the outturn for 2014 was £18,777 billion, and:

        “Net contributions to EU Budget”,

        and the outturn for 2014 was £9,785 billion.

        So now according to the Remain campaign and the likes of Major it is “deceitful” to quote and use official numbers with their official descriptors; yes, the Treasury may say in an official document presented to Parliament that “Gross payments” to the EU in 2014 were £18,777 billion, and that “Net contributions to EU budget” in 2014 were £9,785 billion, but anybody who relies on that official information is a liar. But they are not a liar if they repeat the same Treasury’s blatantly false claims about the economic devastation which would inevitably ensue from leaving the EU.

        I’m not sure where on the scale of deceit this will fit, but I think it will be a long way below such gross deceits as “We have halved the debt” or even “We have halved the deficit”, not to mention “the Single Market is vital to the success of our businesses”.

        As for the £1.4 billion, it is clear that it is not included in the public sector receipts as stated by the Treasury and repeated by the House of Commons Research Briefing, and nor should it be because it is not paid via any public sector body but instead direct by the EU Commission to those who it deems to be worthy recipients – which some will be, but some will not.

  17. CHRISTOPHER HOUSTON
    Posted June 5, 2016 at 11:13 am | Permalink

    Respect to Lord Rose Chairman of the Remain Campaign in expressing his opinion. One hears no-one else in the Remain Campaign expressing a remotely balanced point of view. They are like a 1960s scratched vinyl record. Sounded good at the time.Brings back sweet-sour memories of love gained and lost. But slams you in your heart embarrassingly. How daft you were.

    He is right on leaving the EU,- wages will probably rise. He added matter-of-factly that higher wages are not necessarily a good thing for the economy. The Remain Campaign, what have they done with him since? Have they locked him in a cupboard?

    The Remain Campaign despite the odd Tory participant is essentially a New Labour vehicle. Statists. Now EU Statists. Lots of tiers of governance permitting the elites rubber-stamping in tiny committee elections clones of themselves, dishing out the gravy without having to undergo the perils of standing in a proper election.Facing We the People. They are so afraid.

    Recent outbursts of leading Remaindians with trembling voices attacking the man instead of the ball show their desperation in a historic attempt in avoiding the electorate at all costs.Over-egged their case with volleys of scripted experts who failed to see the recession of 2008 when every citizen receiving tens of credit card offers rubbishing through their letterboxes every day expected an economic crash as surely as night follows day.

  18. Chris S
    Posted June 5, 2016 at 2:33 pm | Permalink

    I have argued since day one of the campaign that the £350m a day figure should not be used.

    At least the rebate should be taken off – it’s possible to make a sound argument to include the amount that we nominally pay over but Brussels tells us what we are allowed to spend it on. But is this necessary ?

    Surely £10bn is enough to persuade voters ? Any higher figure that Remain can challenge is a distraction which complicates and confuses voters. It detracts from our argument.

    Remain can’t dispute the £10bn. Like the immigration debate which we are comprehensively winning, they have no counter argument to deploy.

    • Denis Cooper
      Posted June 6, 2016 at 11:24 am | Permalink

      They can and do dispute the £10 billion, even though that is the official figure!

  19. CHRISTOPHER HOUSTON
    Posted June 5, 2016 at 4:59 pm | Permalink

    Off topic:
    Mildly amusing are media headlines the Far Right have infiltrated the Leave campaign.

    Strategically, despite their quite human abhorrence of giving our country to the EU, a Remain vote will only add to their numbers and Cause. Much of their fuel is UK membership and is directly dependent on Brussels and timid Remaindian double-talk.

    Besides all the rhetoric, realpolitik is that in half century-long Labour seats the only available political party vehicle able to carry a communist, an anarchist, a right-winger, (etc ed)in sheeple clothing is and was the Labour Party.
    Of course the Labour Party has a problem with anti-semitism.

    The OTT giving of benefits, grants, social housing, free this free that to migrants and immigrants and then denying it and calling its own electorate liars…hmm. Well we’ve all read Joseph and His Coat of Many Colours and what inevitably happened to poor Joseph in the same Book that senior and older Labour members were forced-fed in throughout their entire schooling. They don’t fool anyone. Obvious political craft from rather nasty individuals (etc ed)

  20. Lindsay McDougall
    Posted June 6, 2016 at 1:37 am | Permalink

    Once we have left the EU and reduced the amount of immigrant labour, we can and should get rid of that artificial construct, the national living wage.

    Spare me the rhetoric about key workers and social housing. If someone really is a key worker and needs housing, his/her employer will have to pay more in line with market forces.

    Once wages begin to rise and cheap imported labour is no longer available, employers will be forced to use labour more intelligently and invest in training and technology.

    • sjb
      Posted June 6, 2016 at 3:12 pm | Permalink

      Lindsay wrote: ‘Once wages begin to rise and cheap imported labour is no longer available, employers will be forced to use labour more intelligently and invest in training and technology.’

      Faced with higher costs wouldn’t most of these employers move abroad and sell into the UK? Prof Patrick Minford (one of the Brexit economists) favours the UK removing import tariffs but accepts that our exporters would face higher tariifs.[1]

      [1] http://www.telegraph.co.uk/business/2016/06/02/clean-break-from-the-eu-would-help-uk-secure-trade-deals-say-eco/

      • Lindsay McDougall
        Posted June 8, 2016 at 12:54 am | Permalink

        Our international payments have to balance somehow or other. If a significant amount of production moved overseas, sterling would fall to eliminate the cost advantage of overseas production. We would not be in the position of Greece, who exported olives and imported BMWs and were locked into the Euro. In any event, UK employers using labour more efficiently is not a pipe dream; it’s how we used to make progress.

  • 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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