Forecasts and reality

The government has announced that it will make all the payments to farmers, universities and others that the EU is making once we leave. I am glad they have done this. The Leave campaign pointed out we can afford to do so and asked that the government did just that.

Some of the commentary has been bizarre. Trying to turn it into a bad news story, some have suggested that means we will not have the £10bn net contribution to spend on our priorities after all. This picks up an endless confusion some Remain supporters tried to create before the vote. Let’s try and explain it again. All the money the EU pays to UK farmers and others from the EU budget is all money we send to Brussels as part of our gross contribution, and receive back later as payments. This is the main difference between the gross and net figure. The net figure is what it says – the amount of money we send and do not get back at all. Once we are out we can spend that money as we see fit – or give it back in tax cuts to taxpayers – as we no longer will have to send it to the EU to be spent on the continent.

Leave made very few forecasts. Remain specialised in them. Their short term forecasts included rising interest and mortgage rates. Instead both have come down. They included stock market declines. Instead the UK markets have risen.  They included a short term recession. This looks unlikely. They included large falls in house prices. So far there has been little change. The RICS in its latest forecasts  now expects a resumption of house price growth over one and five years.

As one of the people who spent time in the referendum campaign saying I thought they had grossly overdone the gloom, I am pleased to see retail sales up and  mortgage rates down.  It was good to see both the Bank of England and the IMF produce post vote forecasts that assume UK growth this year and next. It was also interesting to see the World Bank scale back its pessimism and now say Brexit will lead to just 0.1% off world growth.


  1. Derek Laud
    August 14, 2016

    A brilliant and pithy discourse, which reinforces one compelling reason to always be wary of the establishment. It’s always alright for them to tell lies, and get away with it…. Anybody else would have to throw themselves on to the mercy of the courts and ask for forgiveness.

    1. eeyore
      August 14, 2016

      Prophets of doom are often right in the end because doom of some sort often happens in the end. The baleful gleam of hindsight then enables the PoD to construct a foolproof causality chain – or at least one that provides proof enough for fools. I humbly suggest this common fallacy might be called Jeremiah’s Law of Pretended Consequences.

      Bad news is not hard to find if you look for it. We may with confidence rely on the BBC.

    2. David Lister
      August 14, 2016

      Hi John,

      To correct you a little, I think the statement the government has made is that only research projects already funded by the EU before the Autumn statement will be offered continued funding.

      It takes about one year for research collaborations to be formed, for project proposals to be produced, reviewed by the project reviewers and for funds to be made available.

      What this means is that there is absolutely no guarantee for new EU collaborative projects as these will not be awarded before the Autumn statement. So whilst it is undoubtedly good news that existing projects are funded, it provides absolutely no confidence for future funding. This will continue to undermine collaborative research unless urgently addressed.

      Please correct me if I am wrong.

  2. Brexit
    August 14, 2016

    Dr Redwood, we ran with the same story this morning and can only echo your views. ( The more who get this message out the merrier, as we obviously can’t rely on the BBC, Sky, and ITV to explain things properly. Your article puts it across very elegantly.

    Perhaps we’ve been a little more forthright than you in our condemnation of what we see as the deliberate attempt to present the continued funding as some form of extra cost to the UK taxpayer. But then we don’t have the responsibilities of being an elected Member of Parliament.

    You write: “Leave made very few forecasts. Remain specialised in them.” We agree and will soon be publishing a fact piece on the claims by each side. There continues to be a perception among many Remain voters that the Leave campaign deceived the public whereas the Remain campaign was whiter than white.

    Re-unifying the country requires that some light be shed on these murky areas so that people can decide, and perhaps revise their judgements.

    Best wishes, the Team

    1. Ed Mahony
      August 14, 2016

      ‘BBC, Sky, and ITV to explain things properly’
      – The BBC seemed pretty bland in its coverage of the Referendum – bland compared, at least, to the Financial Times which I found pretty scathing of Brexit overall.
      Instead of taking pot-shots at the BBC, focus instead on the Financial Times or the Economist (meanwhile, Remainers can take pot-shots at The Spectator and The Telegraph – I’m a centre-right-winger by the way, but not the sort that endorses much of the rubbish written in The Spectator and The Telegraph about the Referendum, above all by Boris Johnson, de facto leader of the Leave campaign.
      (And, yes, rubbish was written by the Mirror and others, as well, but I don’t read these newspapers nor do I endorse their politics so it’s up to left-wingers / liberals to challenge them).

      1. Hope
        August 15, 2016

        I note the BBC regularly saying”if we leave the EU”. Clearly conditioning minds that we might not. It really is time for it to be privatised and the govt fibd an alternative lefty liberal spin machine.

        1. Ed Mahony
          August 15, 2016

          ‘It really is time for it to be privatised’
          – that would be a disaster for this country.
          Firstly, I don’t like the lefty-liberal side of the BBC. But i thought it’s coverage of the Referendum was pretty bland (my personal experience was ITV and Sky were more critical of Brexit).
          Why a disaster? Because the BBC is above all about creating original and creative programmes – documentaries, films, arts programmes and children’s programmes. Privatise the BBC, and we’d only get more banal and inane drivel on our airwaves in general (and it’s a complete misunderstanding of the digital world to think mainstream channels such as BBC 1 and BBC 2 will disappear although I admit there is a decline to a degree). Plus endless more advertising. Worked in America and know well how moronic much of their TV is. Do you really want to see more of that. More soulless TV? I don’t. It’s bad for adults. And it’s bad for kids.
          And the creative side of the BBC also impacts positively on the creative industry in general. And the BBC has made money for us abroad.
          Lastly, the BBC is far from perfect in how it’s funded. But there’s no other way, really, to fund it so that it can keep its independence from commercial pressures to attract audiences at any cost.
          (And, yes, ITV produced Brideshead Revisited, and other great TV – but overall, I think the BBC produces far more original and creative stuff),

          1. Edward2
            August 16, 2016

            Why should a government own a TV and radio and website business?

    2. Lindsay McDougall
      August 15, 2016

      The justification for Brexit leading to improved UK economic performance was best made by Patrick Minford, and Vote Leave made little use of his work. If Vote Leave had made a better fist of refuting the doom and gloom of Project Fear – some of it outrageous – we could have had a bigger victory margin for Leave.

      Minford is in favour of maximum free trade, including (within reason) not retaliating to tariffs imposed on UK exports, and of allowing UK business to respond to modern market demands, including technology.

  3. Denis Cooper
    August 14, 2016

    Now the latest forecast is that we won’t leave the EU before the end of 2019.

    From the Times via the Australian(!):

    I could live with that if I was sure that it would actually happen then, but I can’t feel any certainty about that when I read this kind of thing:

    “Prime minister Theresa May has been expected to enact article 50 in January, setting in train the formal two years of negotiations before Brexit.”

    Because “cast-iron Cameron” didn’t do that immediately after the referendum, as he had repeatedly promised, instead he (deliberately?) gave diehards on his side of the argument enough time to start legal actions which are unlikely to be resolved before then.

    “Despite great political pressure to stick to that timetable, she may be forced to delay because her new Brexit and international trade departments will not be ready, a City source said.”

    And they may still not be ready in a year’s time.

    “French and German elections are also being cited as a cause for delay. Britain might not invoke article 50 until France has voted next May or even until after the German poll in September, ministers confided to senior City contacts.”

    Which is what Sadiq Kahn has floated, and after the German poll there will more excuses for further delay, and if it can be kept up long enough then we will be getting too close to the next general election …

  4. Denis Cooper
    August 14, 2016

    The first paragraph of the Executive Summary of Cm 9216, “The process for withdrawing from the European Union”, published in February:

    “The result of the referendum on the UK’s membership of the European Union will be final. The Government would have a democratic duty to give effect to the electorate’s
    decision. The Prime Minister made clear to the House of Commons that “if the British people vote to leave, there is only one way to bring that about, namely to trigger Article 50 of the Treaties and begin the process of exit, and the British people would rightly expect that to start straight away”.”

    There is a petition here:

    “Invoke Article 50 of the Lisbon Treaty immediately”.

    1. JoolsB
      August 14, 2016

      The Government have already responded to petition 133618.

      Government response:

      “The British people have voted to leave the EU and their will must be respected and delivered. We should not trigger Article 50 until we have a UK approach and objectives.

      The British people have voted to leave the EU and their will must be respected and delivered. The process for leaving the EU and determining our future relationship will be a complex one, so we need to take time to think through our objectives and approach. We want to ensure the best possible outcome for Britain and the future UK-EU relationship. As part of this, the government will of course work closely with the devolved administrations to ensure we get the best deal for the UK as a whole. We should not trigger Article 50 until we have a UK approach and objectives, so Article 50 should not be invoked before the end of this year.”

      Department for Exiting the European Union

      In other words, they have seen the petition and ignored it. They will invoke article 50 when it suits them, not us and if any of us believe article 50 will be invoked by the end of this year, we’ll believe anything.

      1. Denis Cooper
        August 15, 2016

        I know the government has made that rather fatuous response – omitting any mention of the legal proceedings, I note – but the more signatures the more likely that the Commons backbench committee will decide that it should be the subject of a debate.

    2. graham1946
      August 14, 2016

      Hi Denis

      I signed the petition some while ago and have received a reply from the government as follows:

      The British people have voted to leave the EU and their will must be respected and delivered. The process for leaving the EU and determining our future relationship will be a complex one, so we need to take time to think through our objectives and approach. We want to ensure the best possible outcome for Britain and the future UK-EU relationship. As part of this, the government will of course work closely with the devolved administrations to ensure we get the best deal for the UK as a whole. We should not trigger Article 50 until we have a UK approach and objectives, so Article 50 should not be invoked before the end of this year.
      Signed: Dept for Exiting the European Union
      They go on to say that this petition now has over 100,000 signatures and will be considered for a debate.

      Hope of interest


    3. NickC
      August 14, 2016

      Denis, That declaration is a very useful fact.

      However it is not possible to leave the EU only by invoking Article 50 TEU. Our own ECA 1972 must be repealed, since it is this act which gives EU laws (constitutional) legal force in the UK (see Laws et al, Metric Martyrs Appeal). Without repeal of the ECA we will still be subject to EU law.

      The UK’s own constitution in regard of making and abrogating treaties is protected by the Vienna Convention. If the UK has the sovereignty to make a treaty we have the sovereignty to abrogate a treaty; and “no parliament may bind its successor” are both critical factors.

      Since the ECA must be repealed whichever route is considered; and invoking Article 50 is inadequate on its own; and the repeal of the ECA removes us from the jurisdiction of the EU anyway; it follows that invoking Article 50 is superfluous. Worse, invoking Article 50 gives succour to the view that the EU can and should impose obligations and conditions upon our departure.

      1. Denis Cooper
        August 15, 2016

        Repealing the ECA72 is also inadequate on its own; we would still be bound by the EU treaties, but without the present guarantee that we would observe the terms of those treaties and laws springing therefrom.

        I don’t know how to explain this other than in the same way as before: that we are not bound by the EU treaties by virtue of any domestic legislation, but by virtue of the instruments of ratification of the treaties.

        The two operate on different planes: on the international or diplomatic plane the instruments of ratification expressed the final consent of the UK to be bound by the EU treaties, whole on the national or domestic plane the ECA72 and later Acts ensured that we would perform the treaties.

        So for example the European Union (Amendment) Act 2008 did not itself make us subject to the Lisbon Treaty, instead it changed our domestic law so that the government could finally consent to the UK being bound by that treaty through the deposit of the instruments of ratification.

        As explained in general terms on pages 6 and 26 here:



        and specifically for the Lisbon Treaty here:


        “Parliament approves bill to ratify treaty
        The Queen gives Royal assent
        The”instruments of ratification” are drawn up by the Foreign Office
        These documents – three pages of goatskin parchment – are sent to the Queen
        The Queen signs the front page and a warrant authorising them
        The documents return to the Foreign Office and are signed by the foreign secretary
        They are sent to the Crown Office in the House of Lords who affix the great seal
        The documents return to the Foreign Office, are tied in a blue ribbon and bound in blue leather
        They are sent to the British Embassy in Rome and then to the Italian Ministry of Foreign Affairs
        Only then is ratification complete”

        Reply Yes, and leaving means repeal the Act and notify them by letter that we have left the Treaties under Art 50 in accordance with our constitutional arrangements i.e. an Act of Parliament!

        1. Denis Cooper
          August 15, 2016

          The Article 50 letter would say that we intend to leave and would be the start of negotiations for new arrangements to apply after we have left. A letter saying that we have left anyway could be held in reserve in case they muck us about in the negotiations.

    4. bratwurst
      August 14, 2016

      I suspect Article 50 won’t be triggered for at least a year. There is too much to understand and do before we are ready to begin negotiations and the people in charge (Fox, Davis, Johnson etc) don’t seem to have a clue but just maybe are beginning to wake up to reality.
      Money? Well, our RAL liabilities could run to £30 billion subject to negotiation. If we made staged payments this could maybe £4 billion per annum. All speculative but there will almost certainly be some substantial amount to take into account. We may not have as much to spend as we think.
      Bonfire of regulations? Unlikely. Much of what comes from the EU is global, the EU is a middle man. We need good regulation not necessarily less.
      I voted leave and still believe that but I do not think we are looking at the sort of scenario many believers may wish for.

      1. Denis Cooper
        August 15, 2016

        With the consent of the UK government the EU Commission has made future commitments, as explained here in February 2013:

        “This is all very techy but, for a quick recap, there are effectively two budgets, which are called ‘commitment appropriations’ and ‘payment appropriations’ … ”

        The accumulated gap between the two now comes to something like €200 billion, equivalent to about 17 months worth of EU budget revenue.

        Of course some of those commitments are to make various payments to people and bodies in the UK, so some of €25 billion or whatever would come back; alternatively if the UK government paid those sums direct it would not also pay the EU to provide the money for the EU to pay them, so it becomes entangled with that transitional arrangement.

        If we stayed in the EU we would have to meet our share of those liabilities as they fell due, year after year, it is not a new cost arising from Brexit, and nor could we honourably escape making those payments by leaving the EU; I see no good reason why we should be expected to pay it all as a single lump sum – it’s not as if we can’t be trusted to pay in the future – but if that did become necessary it should not be a problem, given that through its next QE episode the Bank of England will helping the government to borrow £60 billion even though it does not really need that help.

        As I commented on the last thread people have their agendas and may try to mould the facts to suit their own agenda. So for the Guardian and for some others who should really know better this is misrepresented as some kind of penalty which will be imposed upon us for leaving the EU, when in reality it is a cost imposed on us for being in the EU.

    5. Leslie Singleton
      August 14, 2016

      Dear Denis–I signed of course–Delay is ridiculous. I haven’t myself been able to grasp what the importance is of the two years–We have a very strong hand to play and I struggle to see why the two years would face a problem in being extended if necessary. To me the only way this might happen is if there were a falling out, big time, with the 27 (which in any event wouldn’t worry me much) and if that happens we just have to do it the hard way (This is where someone says the German car makers wouldn’t let it happen and they would probably be right).

      1. Denis Cooper
        August 15, 2016

        There some people who want to keep us in the EU, and there are some other people who notionally want us to leave the EU but stay in the EEA, and they have shared interests in exaggerating the problems of leaving the EU.

  5. Denis Cooper
    August 14, 2016

    Even the Telegraph managed to get this wrong, saying that the money would come out of our net contribution to the EU.

    1. NickC
      August 14, 2016

      The BBC also gets this wrong; either itself, or by allowing its interviewees to escape censure. Surely even the BBC can’t be that dim?

  6. Sir Joe Soap
    August 14, 2016

    I don’t think you need to explain this to most people. The BBC is so clearly off the mark on this subject. To say “this will cost the country dear” is so disingenuous it is unbelievable. Fortunately a/the BBC is becoming less important as a news outlet, although it spawns journalists who then take their views elsewhere and b/should T May do nothing about this from our subsidised broadcaster, it will be another nail in the Tory coffin, and we will get a UKIP-type government next time which will deal with it.

    1. Lifelogic
      August 14, 2016

      The BBC is so clearly off the mark on this subject, as indeed nearly all others.

      The BBC only ever seem to recruit dimmish lefty art graduates, often with chips on their shoulders, from adverts in the Guardian. They all seem to all have to believe in the EU, ever bigger government, ever more red tape, the insufferable PC “fake equality” agenda, ever higher taxes, ever more benefits for the feckless, the dire free at the point of rationing NHS, magic money tree economics and the green crap climate alarmism agenda.

      Surprising Cameron & Clegg did not work there.

      1. fedupsoutherner
        August 14, 2016

        ‘They all seem to all have to believe in the EU, ever bigger government, ever more red tape, the insufferable PC “fake equality” agenda, ever higher taxes, ever more benefits for the feckless, the dire free at the point of rationing NHS, magic money tree economics and the green crap climate alarmism agenda. ‘

        It’s what they learn in school now and university. They are all brainwashed. I cannot believe some of the rubbish my son comes out with especially since he has been at uni.

  7. Lifelogic
    August 14, 2016

    The more I see of various university staff complaining about lack of funding for this or that research project, the more I come to the conclusion that quite a lot or “research” done by our Universities is of rather questionable value or just politically driven. Hopefully we can move to a far better system of deciding what research should be funded and what should not.

    The same applies to about 50%+ of degrees they offer. There is little point in the government funding pointless degrees while saddling people with large debts and no income for three years. Especially when the degrees are so often almost valueless.

    The big lie from government, that people with a university degree earn £x more over a lifetime is largely a con. It confuses historical data with the current position where so many more go to university. It also make the very basic error of confusing cause and effect. Many earn more because they where a bit brighter (that is why they went to university) not because of what they learned at university. Or they earn more because they have richer better connected parents (which is another reason they might have been more likely to go to university).

    They might well have learned more at work for three years.

    We need more bright people with practical skills, not yet more lawyers and bureaucrats anyway.

    1. Lifelogic
      August 14, 2016

      C Booker exposes the absurdly exaggerated Climate change agenda/industry yet again today. When are we going to cut state funding for this?

    2. JoolsB
      August 14, 2016

      Exactly – any government with half a brain would put an end to this madness, not to mention unfairness, whereby England’s young are coming out with life changing amounts of debt hanging over them for most of their working lives – and for what – mostly useless degrees.

      If they had an ounce of intelligence between them, they would fund the degrees the country is crying out for and deter the ‘useless’ courses by not funding them. Why not for instance train doctors for free on the proviso that they work for the NHS for a required number of years once qualified? After all they keep telling us there is a shortage and that the NHS cannot survive without immigrants. As it is, many medical post graduates will take their services abroad and who can blame them?

    3. Denis Cooper
      August 14, 2016

      Anyway they now complain that getting what they were promised is only the bare minimum and is no more than “ticking a necessary administrative box”. A pity they didn’t look at it like that before the referendum, when they were trying to stir up fear that all funding would come to an abrupt halt if we left the EU, in fact it could even stop the day after we foolishly voted to leave the EU.

      “The announcement by HM Treasury today that the UK government will underwrite Horizon 2020 projects continuing beyond the UK’s EU membership is a confirmation of the bare essentials, but nothing more.”

      “The reason why the Chancellor’s announcement is decidedly underwhelming is that they represent no boost to science, but rather the most minimal assurances possible. While we are in the EU, the UK of course needs to contribute its agreed share to science. As we leave the EU, the UK of course needs to honour science contracts signed whilst the country was inside the team.

      This is not a pledge of extra funds beyond that to which we’re already committed. Anything less than honouring contracts would disrupt countless projects and pull UK scientists from their international teams. The Government portrayal is too much fanfare over Anything less than honouring contracts would disrupt countless projects and pull UK scientists from their international teams. The Government portrayal is too much fanfare over ticking a necessary administrative box.”

      1. Malcolm Lidierth
        August 14, 2016

        Post 2020, and I assume a UK review of funding priorities, some of these scientists may find their work no longer ticking the new “necessary administrative box”. Others, not presently on the EU-gravy train may find their work more highly valued.

        Remember though that is a pressure group with no right to claim a representative role for UK scientists or science.

        The UK punches well above its weight in science and technology. That bodes well for the UK’s future in an increasingly technology-driven world not just tomorrow but for decades to come. Let’s not throw the baby out with the bath water just because it utters babylike nonsense now and again.

  8. formula57
    August 14, 2016

    You might be glad the government has done this but in some cases it represents a most disappointing lost opportunity.

    The disgraceful behaviour exhibited by some Remainers, both before and alas since the referendum, recommends application of Project Retribution. Prime candidates are those scientists who warned us of the death of British science post Brexit as EU funding would cease. Their weak analysis and wrong-headed conclusions may very well also affect their scientific work and so I question why we would wish to throw our good money after bad EU money at those fools.

    1. Lifelogic
      August 14, 2016

      Indeed I must take a look at the list of all those academic staff who signed the absurd letter of propaganda. The one that tried to fool the voters and kill (for ever) any real democracy. Who put them up to it. Someone rather like Osborne one assumes.

    2. turboterrier
      August 14, 2016


      Their weak analysis and wrong-headed conclusions.

      Sadly like a lot of the high profile remoaners is was all about what we be best for them and their jobs and pockets. Self self self as usual and not a lot is going to change.

      They should take a leaf out of the Team GB book. The clue is in the word TEAM. Even in defeat they are a credit to this country unlike the remoaners.

      Haven’t they done well

    3. Denis Cooper
      August 14, 2016

      “They sowed the wind, now they shall reap the whirlwind.”

    4. Cancer Survivor
      August 14, 2016

      Punishing scientists as part of project retribution? So you don’t want cancer cured faster?? Try thinking before you write.

      1. Lifelogic
        August 15, 2016

        No but we might be rather more selective on the areas of “science” and other research we fund. Much of what is funded is rather badly directed or purely political.

        This to get far more real value for our money.

      2. Lifelogic
        August 15, 2016

        We do perhaps have to question the quality of these people’s judgement and independence, given their stance?

    5. Roy Grainger
      August 14, 2016

      The redistribution will happen but parking the issue for 5 years after we leave (as they are doing to faming subsidies which surely are ripe for reform) is a sensible approach to take to silence some of the moaners as the exit process is happening.

    6. Miami.mode
      August 14, 2016

      f57. That’s quite amusing actually. If their funding was cut, that would be at least one fact they got right.

    7. Ed Mahony
      August 14, 2016

      ‘The disgraceful behaviour exhibited by some Remainers, both before and alas since the referendum’ – it’s extraordinary how SOME Brexiteers keep complaining about ‘Remainers.’ If Remain had won (and I’m a Remainer although believe in strong reform of the EU), I’d be totally ignoring the Brexiteers (except to try and put their minds at rest but not criticise them). Instead, I’d be really happy that we had won, and focusing on the future, in particular, about 1. paying off our national debt 2. turning to the topic about how to reform the EU including curbing immigration for all EU members 3. trying to sort out the horrible situation in Syria and elsewhere (don’t know what the solution is) 4. trying to get government to invest more in the high-tech industry. And more.
      Instead, it seems to me that SOME Brexiteers’ beef isn’t really with Remainers but with themselves, trying to justify their position to themselves, and/or, they are really, underneath, not as confident/happy about the future post-Brexit as they make out.
      That how it seems to me at least, and I’m sure to others as well.

      1. Stephen Henry
        August 15, 2016

        Could you please tell me what strong reforms the EU would need to do to make you satisfied as the last 43 years hasn’t ever achieved anything so what makes you think we can reform?

        1. Mitchel
          August 15, 2016

          History suggests that such unions only consent to reform on their death beds.

          Last week I was looking at the March 1991 referendum held by Mikhail Gorbachev,the question asked was”Do you think it is necessary to preserve the USSR as a renewed federation(doesn’t that sound familiar!) of equal sovereign republics….”

          He carried the referendum,albeit 6 of the 15 Soviet republics declined to hold it,but by December of that year the USSR was no more.

          Another comparable union,the oligarchic Polish-Lithuanian Commonwealth(far more than just those two named at its peak)offered a new constitution in 1791;it had been wiped off the map by 1795.

  9. Frank Salmon
    August 14, 2016

    Yes. Remainers claim they were duped by the £350 million bus advert. If so, why didn’t they vote to leave? Leavers were intelligent enough to see it as a short hand explanation of the opportunity cost of membership and voted accordingly. I only hope that when the dust settles we will scrutinise the grants and subsidies from the EU and make them more appropriate for our economic wellbeing. We should also end, immediately, the EU grants which encourage firms like Cadburys and Ford to relocate outside the UK.

    1. Anonymous
      August 15, 2016

      Frank Salmon – Leavers were intelligent enough to realise that the £350 million bus advert was irrelevant.

      They had no idea of what a post Brexit Britain would look like nor how the inflows and outflows of monies would change. They just realised that we couldn’t go on as we were with the inflows of people ! Which continues unabated, by the way.

  10. Peter Parsons
    August 14, 2016

    The Times is reporting that Brexit now won’t happen until the end of 2019, and this guarantee over payments is only until 2020 (why no mention of this time limit in the original article?).

    Using those two dates means this guarantee will last, at most, for one year. What happens then?

  11. alan jutson
    August 14, 2016

    Amazing that so many media sources still do not seem to understand or are being deliberately confusing about the difference between gross and net, and that any money the EU gives in the form a grant is only SOME of our own money back from the difference.

    No wonder so many people are in personal debt, no wonder so many businesses are in debt up to their eyeballs.

    Our teaching/education system seems to have a lot to answer for given so many seem so clueless about simple mathematics, compound interest is but yet another story.

    The Finance/Banking system also has a lot to answer for with their ever complicated manipulation of terminology, rates, penalties and fees.

  12. Phil
    August 14, 2016

    Agree totally with your article. Cameron ran with “the economy stupid” full stop reinforced by every negative that could be begged, borrowed, stolen or dreamed up to support this line. Leave were, in stark contrast, upbeat and positive about reclaiming our sovereignty, Justice, Borders, Fisheries and economic independence.
    I do worry however when I read last week that The Treasury and Business (by which I assume they mean big business) had apparently got together to discuss how we achieve our aims when these two organisations are chock full of civil servants and Companies who have been signed up to the EU from day one and run probably still treat it as a sacred cow.
    Any dialogue , surely, must have significant groups, across the board including small business, pro leave big business and other organisations who are determined to plough a new furrow and make a success of this Country outside the EU.

  13. Iain Moore
    August 14, 2016

    It was such a blatant bit of biased reporting I can’t believe anybody fell for it. It was also noticeable that they attempted to make it bad news because the Government wasn’t prepared to fund these activities for ever and ever without scrutiny.

  14. Antisthenes
    August 14, 2016

    Ignorance of how the EU works and what membership of it means is understandable amongst those of us who are neither politicians or pundits. Those people seek to inform, guide and govern us yet their fact checking and research in many cases is abysmally lacking or they are twisting or ignoring the facts for nefarious self gain. None of these people are fit to hold positions of power and influence.

    It is conspicuous that most of those that are guilty of these attributes of incompetence and deceit are so called progressives and liberals(the two most misused words in the English language) and are affiliated to left wing parties or have left wing sympathies and/or doing so for personal gain.

    It would be refreshing if the likes of the BBC, Guardian and the remainers actually pointed out that the farmers and scientists were actually only being guaranteed subsidies that the EU had taken from the British taxpayer in the first place but they wont. Often they do propaganda by omission very Goebbels of them. Coupled with scaremongering before the fact with evidence free predictions and after the fact to dupe us into believing they were right.

    They say in politics and other corridors of power those who win the argument are those who are best at making the public believe their lies and who makes themselves look the most able. Also those who are best at shutting down or controlling the debate. We the people do not stand a chance against the progressives and others of the left as their rhetoric and tactics are superb and so we allow them to influence us and then pay the price of their incompetence, maladministration and harmful policies and practices and wonder why.

  15. Malcolm Lidierth
    August 14, 2016

    This would seem a sensible move to provide continuity is areas where a break in funding could have permanently damaging consequences. While the perceived breaks may have had more to do with fear that reality, reassurance may help.

    Agricultural subsidies can be discussed sensibly while ensuring that cattle are fed/watered/milked and sheared and land is maintained.

    A break in funding to world-class research groups in university sector would likely have seen those groups disappear with potentially lasting damage to UK position in tech, biotech etc. Fear there may have been enough. Why risk hanging about in UK if a good job offer is available in USA? So UK brain drain a potential problem.

    It should not though be used as an excuse for Westminster/Whitehall to drag their feet. The new government needs clear policies of its own in these areas.

  16. Anonymous
    August 14, 2016

    The BBC is particularly poor on this subject. It always omits the fact that the subsidies were funded by Britain in the first place.

    “… money lost to farmers because of Brexit.”

    “…replacement funding will cost the taxpayer…”

    This is deception.

  17. DaveM
    August 14, 2016

    I am aware (from his time at the MoD) that Philip Hammond is analytical to the point of obsession and have no doubt that he will have delayed making his announcement until he was 100% sure of the costs and therefore how much could safely be promised.

    Clearly farming will continue as it does, and hopefully a more coherent agricultural policy will be implemented alongside the industrial strategy.

    However, given the fact that the fishing industry has been depleted over the last couple of decades, can those areas which used to depend on the fishing industry (and with luck will thrive as a consequence of it in the future) expect to receive a cash injection and support from the government in terms of exporting produce, protection of fishing grounds, apprenticeships to revive the boat-building industry, and so on?

    As I see it, the rejuvenation of the maritime area around the UK is every bit as important as protecting access to European financial markets, but will require a deal of support as mentioned above, as well as a holistic approach to coastguarding, border patrolling, fishery protection, harbour management, customs, etc, etc. Are there any plans in the pipeline to address this issue? It needn’t take that long, and the security side of things can easily be taken care of by the Armed Forces until the civilian agencies are in a position to take complete charge of it. The transition to civilian SAR around the coast was relatively painless, and being a member of the AF it doesn’t pain me to say that I have no doubt the Bristow people will do an excellent job. Therefore there is no reason why private firms couldn’t operate sufficient coastguard and border services given the right licences and vetting procedures.

  18. Bert Young
    August 14, 2016

    I responded to an old friend of mine in Bermuda -who thought that things here were in a “bloody mess”, I said that he should not read too much into what the media have to say . Pre and post Brexit , the BBC , the Bank of England , the IFS and other economist influenced groups have all registered gloomy reports on our post Brexit futures . I reminded him that most of the statements made had been drawn from historical detail that emphasised a worse case scenario ; they could easily have issued statements based on “best case”or even “neutral” scenario .

    Those of who have run businesses with a responsibility to shareholders know what it is to look at the past and then make certain predictions about where the company is placed and where it is going . Most Chief Executives present their views so as not to bluff about the future or to limit views of potential threats or opportunities . Straightforward and honest statements are the best way to influence shareholders ; those who prefer to emphasise the worst case cannot expect their shareholders to continue to invest .

    We must have confidence in our leaders and to trust their judgement ; “belts and braces” types who do not wish to be guilty of overstatement , need to balance their views and to present them so that we – the shareholders , have reassurance in their judgement and know where we stand . At the moment we have been fed with fear and inevitable tragedy – a far cry from the truth .

    August 14, 2016

    Good. This is fine as an immediate reassurance to all concerned that the threatened cuts real or imagined to many jobs are off the table.

    However, there is still a major crisis in higher education. We must not forget that “the best brains in Country” …” ..those with the highest education..” ” the most intelligent minds ” in the United Kingdom were not only unable to do simple arithmetic in regard to EU/UK interchange of money when it directly concerned their own work. But what some of them term “emotional intelligence” was not sufficiently developed, was too immature, enabling them to grasp the commonsense of someone British born and bred that we would not abandon say ten years of research into “premature births” a year or so ahead of a break-through.

    A blank cheque should not be written for the scientific “community”. They have physically voiced matters which would lead one to conclude their projects may not be properly thought through and their sums unworthy of a ticks, sticky coloured stars and certainly not merit badges.

    There are aspects of EU grants too to the farming “community” to keep their land fallow, declare certain sides of fields as “no go areas” leaving the grass and weeds for feathered friends who find it hard to get airborne and their only existence is to provide sitting ducks to bad incompetent shooters ..even fields very close indeed to human habitation..housing estates in point of ….fact. To be fair, the EU fancied they were supporting wild foul and other animals, not a shooting range.Brussels never could see beyond the outskirts of Brussels to see exactly where and how money was spent.
    We should not run scientific work and farming as mini-welfare states where they become debilitated at producing profit because of state handouts or “support” from the government ( we the tax-payers ).

  20. forthurst
    August 14, 2016

    On the one hand it is appropriate to give recipients some certainty, but on the other there is a pressing need to replace the EU system of agricultural support with one that that maximizes the production of food that we need for the home market as son as possible; the rewarding of farmers based on acreage must end: we don’t reward factory owners by their floor space.

  21. petermartin2001
    August 14, 2016

    I’ve been increasingly concerned with all economic forecasts recently. The inaccurate forecasts over Brexit are just another example.

    They don’t seem to be any better than we’d expect back of envelope calculations. For example if we looked at what VAT revenue was in the past year we might, if we didn’t know any better, say that an increase in the rate from 20% to 22% would generate another 10% or revenue.

    Of course we’d be wrong. The deflationary effect of that increase would reduce the number of economic transactions in the economy and the revenue increase would be much less. It is even possible that there would be less revenue generated than previously. More people will lose their jobs in a slowing economy which will mean that they no longer pay any income tax and instead have to be supported by unemployment benefits.

    We need to smarten up our thinking and when things don’t work out as planned, as they hardly ever seem to do on economic matters, we need to go back and learn from our previous mistakes.

    August 14, 2016

    A little off topic:
    One American Business journalist said recently plumbers are gold in West Virginia. Not enough of them. I believe there are quite a few of the “professionally educated” in academia here who wish their Secondary Education had been “car mechanics;plumbing; heating; internal and external decorating/building/ repairs and homebrewing.
    Let’s face it, many graduates and newly weds could have saved thousands even tens of thousands by having some little appreciated skills. We should esteem, more, the practical in our society. It makes economic and social sense.

  23. Ed Mahony
    August 14, 2016

    Instead of focusing on Remainers and the short-term (the Referendum is over – Brexiteers won), please can Brexiteers focus more instead on trying to persuade people in general why they should be enthusiastic about the medium to long-term future of this country in terms of prosperity, restriction on immigration, a strong union, peace and security (including geopolitics), and using detailed plans to explain all this.
    This is ultimately how the markets and investors are going to judge the success or not of Brexit, not whether some in the Remain camp exaggerated short-term forecasts (not forgetting how Brexiteers exaggerated too with fear-mongering over immigration – and that it was the subject of immigration, not economics, that ultimately won the Referendum).
    Lastly, it’s very early days yet. We’re still to:
    1. Sign Article 50
    2. Negotiate a deal with the EU
    3. Negotiate trade deals with the USA, China and others.

  24. JohnF
    August 14, 2016

    Trying to turn it into a bad news story, some have suggested that means we will not have the £10bn net contribution to spend on our priorities after all

    Even the crowd seem to have got this wrong. I’m sure they say somewhere on their web-site that even after paying the subsidies we’ll still have an extra £4 billion.

  25. Edward.
    August 14, 2016

    As you say Mr. Redwood, verily were the forecasts of imminent economic doom and ever so slightly overdone.

    Daniel Hannan, very eloquently put it, [paraphrasing] post the Brexit plebiscite, during the interim we remain in the EU and that, people will notice very little difference. Of course, there will be some market turmoil but these days with the world economy trending somewhat in the nether regions recessional – not least in the People’s Republic of China ‘market turmoil’ is to be expected rather than leaving the market aghast. And markets love a panic, it’s what they do, Lemmings.
    Some would argue that, the British helped fashion the shackles of EU, its inefficient, onerous customs union and with its sclerotic practises and there is much merit in what they say, indeed the Stockholm syndrome pervades our very own, EU bureaucracy is a mirror to the UK pro EU administration, apparatchiks and all.

    What is needed is, a reminder of just who pays the wages of our administration and remind them very much, if not every day that, the British electorate grows weary of the constant barrage of media stories and lies pertaining to the so named ‘hardships’ now being endured by all sorts of academics and blocs of subsidy addicts.
    Imho, invoking some sort of declaration of intent to leave whether it be Article 50 or whatever else, and by setting a clear date to leave come what may would, concentrate minds, expedite the process and most importantly, grant the UK electorate the clarity that they demand.

    I perceive, that, even among those who voted to remain, already the great British public are beginning to wake up to the realization, there is nothing to fear but fear itself and OUT means OUT.

    Furthermore, in the medium and long term and probably in the short term, Britain will prosper and luxuriating in and not before time reclaiming its national sovereignty, back to most splendid autonomy once more. To trading with the world but also able to act in her own interests as and be, a free country.

  26. Graham
    August 14, 2016

    The more we delay demonstrating that Brexit is happening the more we will be at risk from those who wish to push for a re-run of the vote.

    How about some ‘official’ repudiation of these untruths.

  27. APL
    August 14, 2016

    According to the media, the UK government has spent £52 billion over eight years, that company, RBS now has a market capitalization of half of that value.

    Would you say, that represents good value for tax payers?

    Now Tata steel in Port Talbot was valued by Tata themselves at almost zero in March of this year. Looks like there is a buying opportunity of a lifetime to secure a strategic industry for the UK.

    1. APL
      August 14, 2016

      “£52 billion”

      Turns out, that was just the running losses that the UK government has plugged. There was the original £45,000,000,000 bailout in 2008.

      In total £97billion to keep Gordon Brown’s seat for two years.

      Seems an expensive bung for the Labour Party, if you ask me.

  28. MPC
    August 14, 2016

    I take encouragement from this and your recent posts about Brexit where you have remained upbeat and optimistic. As one who campaigned actively during the build up to the referendum, it’s disappointing to read about the apparent ever lengthening timescales for departure and the increasing impression given from government that ‘it’s all rather difficult’. There’s some consolation in the current circumstances being a bit better than had there been no referendum, but it’s deflating to read that we won’t leave until 2019. Much could happen politically before then to scupper Brexit in any meaningful sense. I wonder if you can provide any reassurance as to how far your efforts and those of your eurosceptic colleagues are having an effect in persuading the PM to get us out of the EU.

  29. acorn
    August 14, 2016

    It’s times like now that we discover just how poor financial journalism is in the UK media. Our EU subscription has been miss represented in more ways than you can shake a stick at. These are the same journalists that pretend to be expert commentators on QE; interest rates; government borrowing (that isn’t); debt and deficits. They are fortunate that the receivers of their nonsense, know far less about the subject than they do!

  30. Ian Wragg
    August 14, 2016

    John,why does Hammond keep going on about access to the single market. Every country in the world has access which doesn’t mean part of. Is he deliberately muddying the waters or does he think we are too stupid to understand.
    Today the Times reports that it will be end of 2019 before we leave the EU. What’s the excuse this time.
    Farage has said he will be returning to the fray if there is any backsliding. That should concentrate Mrs Mays mind.

    1. APL
      August 14, 2016

      Ian Wragg: “Hammond keep going on about access to the single market.”

      We are already in the single market. Neither is it part of the political European Union. We can easily disengage from the political apparatus of the European Union but retain access to the single market.

      It is a handy stepping stone which will allow us to disentangle ourselves, one step at a time, with minimum economic disruption.

      But one example; The single European sky, ( promoted by the Tobourtm party ) which might require more than two years to disengage.

      We also have to whip our civil service into shape, much of which has been used to simply implementing EU directives for at least the last twenty years.

      Only once we can rely on them – which probably means at the very least disbanding the Foreign and Commonwealth office – we may be in a position to negotiate our way to bilateral agreements again.

  31. Bob
    August 14, 2016

    “Their weak analysis and wrong-headed conclusions may very well also affect their scientific work”

    Yes. For example all their supposed ‘immigration studies’ got the *null hypothesis* wrong. Disgraceful. They failed to separate out those who would get a Visa with those who wouldn’t, and looked at cutting ‘EU immigration’ as a whole rather than just unskilled migrants. The trick was to aggregate the skilled and unskilled immigrants together and *refuse to talk about the set of people that would be excluded outside the EU* – those who wouldn’t otherwise get a work visa.

    Some honest people at Oxford University:

    “Overall, therefore, most EU-born workers—like most workers of all origins—are not in jobs that meet the criteria for Tier 2 visas. Because EU workers are underrepresented in high-paying graduate jobs, a lower share of those who are already living in the UK are working in jobs that meet the occupation and salary thresholds described in this report, compared to the average across the UK labour market. In 2015, 19% of people born in EU countries and working as employees in the UK were in a skilled job earning more than £20,000. Many of these people had been living in the UK for several years and thus may have different skills and experience compared to people who are newly arriving. They have also had longer to enter skilled employment. The share of newly arriving EU born workers who had arrived in the UK in 2010 or afterwards and who were in graduate jobs earning £20,000 or more was lower, at 12%.”

    88% of current EU immigrants would fail the tests to obtain a work visa.

    What J. Redwood needs to do is reject the framing. This has never been a numbers argument. If we impose Tier 2 visa restrictions on all immigration, rather than just non-EU migrants, then we’re likely to get migrants that fly Alan Bennett class.

    And that makes all the difference. If, for *any* given immigration cap, you have fewer low-paid people coming into the country, then that frees up slots for more high-paid people, and that increases the net benefit to the resident population.

    As to the other stuff, any impacts on business confidence can just be offset by the government raising spending/cutting taxes, as the MMT/Functional finance people have shown. So that is just a political choice from the government that of course John can try and change.

  32. rose
    August 14, 2016

    I was glad Mr Hammond made this announcement, even though it was galling that unpatriotic leftwing academics were once again taking precedence over the Navy.

    I heard the BBC presenter discussing it with two guests on What the Papers Say and was infuriated to hear them all three saying to each other: where will he find the money?

  33. acorn
    August 14, 2016

    This is all getting a bit silly now. The PUBLIC sector accounts from PESA are at

    From the net contribution of £10,391 million, you have to extract circa £1,500 million for the grants that go directly to PRIVATE sector entities from the EU, outside of the government accounting system.

  34. Sean
    August 14, 2016

    Don’t you mean if we leave! May isn’t going at take us out of the eu anytime soon. She is stalling and press are saying 2019 until she invokes artical 50. I knew that she is a traitor and i for one will not vote for her in the next election.

  35. Anthony Makara
    August 14, 2016

    The promise to cover spending until 2020 is proof that we can expect to still be shackled to the EU four years from now. It pained me to read numerous forums in which the Europeans have mocked the govt’s go-slow Brexit policy. To sum up, the comments, by Europeans, believed that we are too chicken to leave the EU and are trying to hang on to membership. We of course know this to be nonsense but that is the impression being given by our govt’s dithering approach so far. An impression that will undermine economic confidence if it continues. As for the great Brexageddon, it hasn’t happened and the only economic uncertainty is coming from the govt dragging its heels and not showing itself to be committed to quick withdrawal. The whole process needs to be sped up, to show confidence to the markets and to end the uncertainty, otherwise the mocking will continue.

  36. Anonymous
    August 15, 2016

    Sorry to go off topic – but I don’t recall the EU featuring in the 2012 London Olympic opening ceremony at all.

    If indeed all this largesse funds our agriculture and science then oughtn’t the EU have been given special thanks ? And as they weren’t given thanks then why weren’t they annoyed about it ?

  37. Lindsay McDougall
    August 15, 2016

    The key point about Brexit is that the benefits begin after we have actually left:
    – The cessation of £14 billion per annum net cash payments to Brussels
    – Recovery of our fishing grounds, netting at least £0.5 million per annum
    – The ability to do free trade deals with the rest of the world
    – The right to run our own economy in our own way

    I dislike the commitment that the Government has made to carry on funding farmers and universities in the same manner. At least there has been no commitment to carry on with EU aid to the regions – or has there? Both foreign aid and regional aid suffer from the same problem; they depend on the ability of governments to pick winners – and they ain’t too good at it.

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