Author: johnredwood

Both sides can ask each other what life will  be like if they win. The Remain side are completely silent on what remain looks like, so it’s high time the media started asking them about important problems ahead for the EU.  Here are four realistic scenarios – what is their answer?

1. The UK compromises over the Treaty of Political Union in a few years time and has to hold a second referendum on the powers transferred under that new Treaty.

We know there will be a new Treaty soon. The government after all has promised us Treaty change to entrench its “new deal” following renegotiation. The 5 Presidents Report makes clear they have started work on a Treaty of Political Union. The UK will be expected to join that, and will have to to secure its Treaty change from the renegotiation. Inevitably some power will be conceded, even if there are some opt outs from the most centralising features. There will then have to be a second referendum under the UK’s Referendum Act.

2. The UK applies the veto to the Treaty of Political Union.

It is possible though less likely the UK will resist any new powers to the EU.  We will end up having to veto the Political Union Treaty if we stick to that view. This means we will not secure our Treaty change to implement the renegotiation, will block progress on putting political union behind the Euro currency, and annoy all our Euro area partners. It will delay necessary reform to save the Euro and make the fragile Euro even more subject to crisis.

3. Another round of the Euro crisis forces the UK to accept a bigger EU budget

The Euro remains unstable, with Greece, Portugal, Spain and Italy struggling within its austerity discipline, unable to devalue to relieve some of the pressures. There will be natural political pressure to send more money to the poorer areas or areas suffering from the single currency, just as happens in single currency areas like the USA and UK where there are large regional and welfare transfers. The EU may well wish to boost regional policy, structural funds and other regional transfers to tackle deprivation and high unemployment in large areas of the Eurozone, and they will expect the UK to contribute. How high might the EU budget go? How much more money will be sent out of the UK to pay the bills? The UK claims to have an opt out from Euro area bail outs, though the UK still did participate in the last short term bail out loan for Greece. We are  not opted out of the many transfer payments systems already set up in the EU which they will wish to expand.

4. The EU fails to solve the  migration crisis and expects the UK to make a larger contribution

The government’s own flawed figures for 2030 contain a forecast of continuing high levels of EU migration into the UK. There is also the possibility that the EU will expect the UK to make a larger financial contribution to help resolve the migrant crisis. The Euro 3bn for Turkey will probably be an addition to the EU budget which we will have to help fund. The UK will be under pressure to make more migrants under some EU quota system as well as increase payments to assist.

 

Remain is a wild ride to political Union. A reluctant UK will be dragged into more loss of power and more integration than we want, whilst demanding more opt outs as the Euro drives the others to a political and fiscal Union. We will have to pay more of the bills for the failing Euro whilst battling to stay outside the immediate rescues and  extra loans some countries and banks will need. The European budget will grow and will make bigger transfers to the weaker countries in the zone. The UK will contribute to this.

So here are some questions interviewers ought to put to the Remain people.

 

1. How big will the EU budget become in future years? Won’t the UK have to contribute to a beefed up regional policy to help the Eurozone?
2. How many economic migrants will come in the next five years, as the Eurozone has double the UK rate of unemployment and many parts of the wider EU have lower wages than us?
3. How will the UK respond to the demands of the Commission and many member states for a new Treaty of political union?
4. When will we get the Treaty amendment we have been promised as part of our renegotiation?
5. How do you see the EU plans for fiscal Union and greater EU control of VAT and business taxes affecting the UK?
6. When will the Ukraine and Turkey join the EU?  Why does the UK support additional members of the EU when there are still such obvious problems integrating the last wave of new members?
7. Will the UK continue to oppose joining in a scheme of quotas to take refugees who have arrived elsewhere in the EU? How long will it take other EU states to offer recent migrants EU citizenship and freedom of movement rights to settle anywhere in the EU?
8. What is the average WTO tariff charged on non EU members trading with the EU and how does that compare with the tariff EU pay as members? (They are both very low and similar)

The UK Parliament cannot abolish the tampon tax. The UK government  lost a court case in the ECJ over keeping our VAT rate on green products at 5%. We have been ordered to raise the rate to 20%, making it much dearer to insulate our homes or fit heat pumps. We cannot take VAT off domestic fuel though that would ease pressures on family budgets and cut fuel poverty.

The Remain side say the negotiations included a provision to let the UK and other states have more flexibility over VAT lower rates. On April 7th the EU issued what it wants to do on VAT, to the total silence of the UK media even though this was an important statement rather like a Budget, affecting a major tax which the EU controls.

The main thrust of the Commission’s Action Plan for VAT is more centralisation. They want more control over cross border VAT, more control over tax fraud cases, and a new clarity in how and where VAT is levied. They will doubtless achieve their centralising ends, and they propose legislation this year to do so.

They offer two models for possible legislation in 2017 to give more flexibility to member states. They say they could examine the current list of exemptions and permissions for lower rates to see if others should be added. No additions are proposed in the document to cover the UK requirements, and any such changes would require the consent of the other member states. Or they say they could allow member states to choose their own lower rates, but this would have to be subject to new controls to stop tax competition and damage to the single market.  In other words member states would not be free to choose their lower rate items as they wished.

 

More interestingly the Commission says either of these changes would require clear political directions from the member states as a whole and from the European Parliament. There is no statement that this has to be delivered to meet the terms of the UK renegotiation, no sense of urgency, no sign of any Special Status on tax for the UK.

 

It looks as if the delegation of more authority to states to choose lower rate VAT is far from a done deal and not an EU priority. The Commission document has helpfully reminded us of who is in charge on VAT, and set out a course for a more centralised VAT system.

The EU has also been doing work on a fiscal union with more control over member states taxes generally.

The conclusion to all this is that the UK is still not allowed to repeal the tampon tax and has to put up its VAT on green products to comply with the ECJ ruling. There is no reliable relief in sight. So where are the results of the UK’s renegotiation? Why doesn’t the EU simply have to change the law to allow us to alter our VAT rates?

If only the world establishments used as much ingenuity and energy to make the world economy better as they use to try to keep the UK in the EU. As we know, unfortunately, the establishment has a very bad record. Its judgements about the wisdom of the European exchange Rate Mechanism, the Euro project, the way to establish democracy in the Middle East, the Iraqi war, policy towards the Ukraine and much else have been dreadful.

Far from raising living standards and promoting peace. many of their interventions have made things worse. The main governments and Central Banks failed to require sufficient cash and capital in banks prior to 2007 and then tightened too much to bring on the crash of 2008. These same institutions now want us to believe them as they make wild allegations about what might happen if the UK became an independent country again.

Clearly the Remain side are rattled, as they are ransacking their address  books of the rich and powerful and expecting many to come to their aid with endorsements. I’m not sure why they think endorsements from unpopular foreign Investment banks will win over voters, nor why they think foreign governments saying they find it convenient for them if we stay in should sway UK voters their way. The orchestrated extremes of their claims leads many to doubt them altogether. Why does it matter so much to them? If it is good for the rich and for the foreign banks, maybe it is bad for the rest of us.

 

Money is often at the bottom of it. Large corporates like the EU more than small businesses on average, because they can influence the EU to give them the rules and regulations they want to entrench their positions. The EU institutions and other governments want the UK to stay in because we pay an important slice of the bills and the salaries of EU officials. The USA wants the UK to stay in to try to make the EU more US friendly.

At the beginning I was a bit concerned about the weight of establishment opinion. As I now watch them making ludicrous claims and all working together I think many in the public will think it is some kind of plot. None of them consider what we could do if we took back control if our own money and spent it on our own priorities. None of them understand the need to make our own laws and decisions if we are to restore our democracy and reconnect voters more with government.

Mr Corbyn’s decision to speak for Remain when his past has been to argue to leave the EU is a curious example of the power of the establishment to make even the most unlikely people conform to their wishes. Mr Corbyn’s remarkable victory in the Labour leadership election by a large margin on the first ballot owed a lot to people thinking he would different. He offered a socialist alternative to the Blair/Brown years which many Labour members wanted. Many of them supported his view that the EU takes powers away from a democratic Parliament and makes the conduct of policy more difficult for any elected party in the UK. His partial U turn and his unconvincing exposition of support for Remain will undermine some of the belief his followers have in him.

His main reason for wanting to keep us in the EU was based on a simple lie. The Conservative party will  not repeal the parental leave and equal pay measures which many cherish. Mr Corbyn should have checked the Conservative Manifesto and the Brexit programme before making his allegations. They would remain as good UK law after we left the EU. Conservative Eurosceptics want to get our money back and to take control of our borders. We do not wish to change employment law.

There seems to be no end to how low the establishment will stoop in seeking to buttress the weak support for Remain in the country. Lord Darling threatens us with a banking crash in a most irresponsible and silly way. An IMF Report downgrading world growth on fears about China, the commodity cycle and flows of money to and from emerging market countries is spun as saying Brexit is the problem. This is of course the self same IMF that has lent too much to Greece and Ukraine, supported the ailing Euro and thought membership of the European Exchange Rate Mechanism would be good for the UK economy just before that policy  created boom and bust and plunged us into a damaging recession.

When we leave the EU we will not leave Europe. We will still trade with them, have many agreements with them, we will travel, enjoy each other’s culture and language, foster student  exchanges, undertake joint research, common investment projects and much else.

Anyone from another member state currently living in the UK under the legal provisions of the EU treaties will be welcome to stay and will  be protected under international law anyway. So will all UK residents living in continental EU countries. It is only the rules about new entrants that will change.

An independent UK will still want to offer many university places to European students, and many UK students will still travel and study on the continent. The UK will remain an important part of the academic global community with many links and common programmes with our European, American and US allies and partners.

All the money that the EU sends to universities, farmers and others will be continued as UK government payments, as we have to send Brussels the money in order for them to send some of it back.

A free UK will still welcome in many qualified and talented people to take jobs here, and will make sure our border system allows UK business access to the talent worldwide it seeks. The new border controls will simply create a fairer system of control for people seeking low paid and unskilled jobs, with the same rules for non EU and EU people. It will also give us back the ability to limit the total numbers in any given year.

The UK leaving the EU will still be willing to import continental goods and services with no new restrictions on our trade. We can look forward to the rest of the EU wanting trade arrangements that preserve their present access to the UK market as they sell us so much more than we sell them.

The Labour, Conservative and Lib Dem parties are united in wishing to keep the EU employment laws that offer protections to UK employees. There are no proposals to water down employment protections on exit.

Yesterday we discussed the Remain campaign’s repetitive question, and the misleading answers they give to it though it should be for us to answer. What does Brexit look like? We have never suggested it looks like the Norwegian or the Swiss model, which they want it to be so they can knock those down.

 

We decided that we often tell them what Brexit looks like, and we should spend the next few weeks telling people again and again what Brexit looks like, because it will be a more prosperous, freer and  more democratic Britain that we create on exit from the EU. So here goes:

 

 

Brexit means taking control of our own money and spending it on our own priorities. It means offering that Brexit budget to banish austerity, spending £10bn more on what matters to us. It means  s an immediate and substantial improvement in the UK  balance of payments as our contributions to the EU stop.

 

Brexit means taking control of our borders, so we decide how many people to invite in to our country. It means a fair migration policy offering the same opportunities to  people from the rest of the world as from the rest of Europe. It means inviting in students to study, welcoming skilled and talented people into jobs where we need them,  accepting entrepreneurs and investors who want to create jobs and own assets in the UK. As Lord Rose of Remain has said it means higher wages as we cut the flows of EU migrants into low paid jobs.

 

Brexit means setting the taxes we want to impose. It means we can keep the corporate taxes we raise from big business, instead of losing £7bn every five years from European Court judgements making us send money back to those rich  companies. It means we can abolish VAT on domestic fuel to tackle fuel poverty, scrap the hated tampon tax and take VAT off green products and insulation materials.

 

Brexit means making our own laws without having to get the agreement of 27 other countries.

 

Brexit means restoring the UK’s influence in the world, as we regain our vote and voice on world bodies which the EU has taken from us. We will be able to negotiate our own free trade agreements with the fats growing economies of the world.

And Brexit means continuing to trade with the rest of the EU as we do today. As Lord Rose has said, after Brexit little on trade and  business matters will change. The rest of the EU does not wish to sell us less and realises they cannot impose new barriers to a profitable trade.

 

Brexit means a more prosperous, freer, more influential UK . Referendum Day can be  Independence day, the day we restore our democracy.

We can be sure of just one thing about the voting intentions of Cabinet members on June 23rd. The six ( now 5 after resignation) brave enough to declare for Brexit will vote for it. It is not easy for a serving Cabinet Minister to disagree so fundamentally with the Prime Minister, so if they do so they will see it through.

But can Mr Cameron rely on the votes of all the other 16 in the privacy of the polling booth? There are some very unlikely converts to the joys of the EU amongst the Cabinet. They will live through some very uncomfortable interviews, problems with explaining their positions to their Conservative Associations and no doubt a good few constituent emails and letters. In the end their own inner beliefs may come through in what after all is a secret ballot.

Those who come out and speak about the topic are often quick to criticise aspects of the present EU. None of them want us to join its two central features, the common frontiers and the single currency. It’s as if we had joined a football club, only to state we have no intention of either playing or watching any football, and then demanding a lower subscription to the club because we don’t join in its main purposes.

Listening to the Prime Minister himself who will vote to stay in I am struck by how much of what he says about the EU is negative. He stresses all the things we are out of thanks to past opt outs, or things he wants us to be out of but probably are not owing to the weak deal. The Remain side  wants to win based on describing unappealing versions of Out which we do not have to choose, whilst stressing Eurosceptic negatives on the organisation they are  in practice recommending to us!

So who is the genuine EU enthusiast in the Cabinet? The curious thing is there isn’t one. Mrs May is as close as you get to someone who can see some good in the organisation and wants to expand its power a bit. You need to go to the next layer down to find a believer like Anna Soubry. Never has a Cabinet risked so much to argue such an unpopular case when so few of them believe in it.
The face of the EU is the face that has launched a thousand whips. Most of those whips have been as unpalatable as the EU’s face is unattractive to many Conservative MPs.