Author: johnredwood

The UK identity is a complex matter these days. Some people want to be Scottish to the exclusion of their UK identity. Northern Ireland has long been divided into a majority proud to belong to the Union, and a minority wishing to join the Republic of Ireland. Many people are happy to be both UK and English, or UK and Welsh and see no conflict.

Yesterday I was speaking to a school sixth form on their chosen topic of British values. At the start I asked them to tell me how they felt about their identity. I asked them to say how they would answer a foreigner who did not know local UK geography where they came from? How did they feel about their own identity?

I offered them four choices. They could say they were European from the EU, British from the UK, British from Great Britain, or English from England. Just four opted for European, and just three opted for British from GB. The large majority opted fairly evenly for UK or England. It demonstrated that English identity is becoming much more prominent and popular. It was inconsistent with those who say young people see themselves as European. I have had similar results over a choice between European and British elsewhere with student audiences.

I find when out and about campaigning there is a growing awareness of the high costs of staying in the EU. We are gradually getting over the point that they spend £10 billion of more money that we could better use at home. We are not yet getting over the equally important point, that we will be able to afford to pay all the monies currently paid to UK people and institutions by the EU on top of the £10bn bonus, as all the money we get back we are sending to Brussels first. Please tell all famers, university people and others you meet the UK can pay every penny to them that the EU pays, because it all comes from us in the first place. As far as the UK is concerned, Brussels has no money. Every penny we get back we first sent to them. Then there is the £10bn we don’t get back which we have to send them as well.

A senior scientist yesterday on the media implied that we would not get grant money for universities out of the EU. Some of the university grants and collaborative programmes are European programmes not organised by the EU, so we would remain eligible. Any so called EU money that was discontinued is our money which we sent them in the first place, so we can simply pay our own universities with that money which no longer has to be sent to Brussels. Our scientists will continue to work with scientists from many other countries including member states of the EU after we have left, as universities are rightly collaborative on a global basis across national frontiers.

Debating against Better Stay in speakers always produces the same attitudes. They spend half their time running down the EU they want to stay in, and the other half scaremongering about coming out! They always say they do not wish the UK to join the Euro. They stress the protections of the UK’s opt out and subsequent negotiations over avoiding the costs and rules the single currency imposes. They usually rejoice that we are not in Schengen, implying that means we are also opted out of freedom of movement which of course still applies.

So the first question to Stay Inners is Why do you wish to belong to this organisation, when you disagree with its two central features, the currency and the common borders? It is like joining a cricket club, only to announce you have no wish to either play or watch cricket, and then to complain that people talk about cricket at the odd social you attend as a member.

They should be asked how does the UK keep itself out of consequences of Schengen, when we have freedom of movement obligations with Schengen members?

They should be asked if they support the Common Fisheries policy? Do they think it has helped or damaged the UK fishing grounds and industry? Why did it take almost 40 years to get some basic reforms of its damaging policies? Wouldn’t we have better fishing grounds and a stronger industry if we left and controlled our own fish stocks?

They should be asked if they support the Common Agricultural policy, still the biggest cost in the EU? Do we get benefits from subsidising continental farmers? Wouldn’t it be cheaper for UK taxpayers to just subsidise our own farmers? Why did we get less milk quota than we needed? Why did they show such hostility to British beef?

They should be asked if they support the common energy policy? Hasn’t the EU requirements on renewables forced us to construct large numbers of onshore wind turbines which have affected the landscape and left us without reliable power? Isn’t EU energy policy a damaging mixture of supply restrictions and high prices, the very opposite of what we need to tackle fuel poverty and increase industrial investment?

They should be asked if EU policy towards Croatia and more recently Ukraine has helped or hindered stability.

And they should be asked why they think £10 billion of our money should be spent on rich countries on the continent.

Whilst we have been preoccupied by the gripping drama of our referendum on the future of our country, there has been plenty going on elsewhere in the world which has led to stock market declines and worries about the economic future.

Investors and commentators have taken to doubting the power of monetary policy to deliver growth, a bit of inflation and better returns for savers. The large experiments with creating additional money and buying bonds have not succeeded in lifting the inflation rate in either Japan or the Euro area. The growth rates of the US, the Euro area, Japan and China all seem to be slowing. As some Central banks push deeper into negative interest rate territory, some wonder if all this has gone too far. Negative rates make it difficult for banks to make money and therefore to lend more. They also give the impression of panic by the authorities which does not help confidence. Meanwhile plunging oil and commodity prices in recent months have wiped billions off share valuations of those sectors, and have worried people about the state of the banks that has lent the money to those industries.

Some have returned to their beliefs in bigger fiscal stimulus. They are asking governments to go easy on deficit reduction, spend more, and borrow it at cheap rates. Some want the monetary experiments to be taken further, recommending more quantitative easing, further cuts in rates, and even so called helicopter money, where the authorities print money to spend.

To get back to normal the authorities have to do something they clearly do not want to do. They have to allow banks to make reasonable returns, and allow them to lend more on their current capital base. If the authorities persist in preventing the banks from lending to reasonable prospects, or if their fines, taxes and interest rates prevent banks making profits, the banks and the economies they seek to finance will remain crippled. If the European Central Bank wants banks to hold more capital and to take a tougher line on the value of loans it will hold back economic growth. When a Central bank does that, and creates new money at the same time, it is like trying to drive a car with one foot hard down on the accelerator(money creation) and the other hard down on the brake (cash and capital controls). No wonder there is not much growth.

When sterling was at 1.15 Euros in 2011 no-one suggested it was weak because we might leave the EU. It is now 1.27 Euros to the pound, a 10% Euro devaluation compared to 2011, yet we read the pound is falling owing to Brexit fears. In January 2012 there were just 118 yen to the £1. Today there are 160, a yen devaluation of 35%. Against the dollar, which has been rising against most world currencies in recent years, sterling has just hit $1.40 again, a level it has reached several times before. The £1 was also weak against the dollar in July 2013 and in April 2015, when its weakness was not ascribed to Brexit fears.

The reasons people sell a given currency and drive its price down from time to time are varied. Currency volatility has been a big feature of world markets so far this year. At the centre of the action has been the weakness of the Chinese yuan and the strengthening of the yen after a long period of weakness from the Japanese currency. There has also been a period of dollar weakness against the yen and Euro, as people revised their expectations of further US interest rate rises downwards. Sterling has been caught in some of the cross winds from these global currency moves.

Recent falls in sterling against the dollar may be related to perceptions that the Bank of England is now going to delay any interest rate rise this side of the Atlantic for many months. They may be related to continuing weak balance of payments figures, and less hot money flowing in from Russia, the Middle East and other commodity producing areas. There have been people out to talk the pound down as they think it had reached uncompetitive levels. It is difficult to see why the possibility that Brexit might win the referendum should have a great lasting negative impact on our currency. After all, the first round effect is to improve the balance of payments by on fifth as we cancel the payments we have to make to the rest of the EU which we do not get back.

It is difficult to know whether the 2011 rate against the Euro meant the pound was too cheap or the current rate if still too dear. Markets change their minds on these matters, and often overshoot when correcting what they see as an anomaly. The pound did not suddenly fall the first time someone published a poll showing Brexit was likely after all.
Yesterday the Bank of England testimony to Parliament mattered more. Hints that interest rates could be cut again and more money could be created showed the Bank doesn’t mind more currency depreciation. The Bank was far more worried about low inflation and weaker growth than about devaluation.

The text of the Council meeting is wordy. The preambles make clear that the agreement is entirely within current EU treaties and law. It says it is seeking to clarify, not change. Language affirming a multi currency union did not survive the Council. Instead the UK had to settle for a recital of the opt outs that the UK and Denmark enjoy and the conclusion that all the time those derogations remain “not all member states have the euro as their currency”.

The preamble goes on to recite UK opt outs from the common borders policy, and some criminal justice measures. Four pages remind us of the current legal base and the areas where the UK already has opt outs. Then we get into the Decision of this latest Council. This begins with a balanced statement for the UK vis a vis the Euro:

“(UK) will not create obstacles to but facilitate such further deepening (economic and monetary union) while this process will, conversely, respect the rights and competences of non participating member states”

The more detailed explanation of banking rules is also similarly balanced. Whilst member states not in the Euro are accorded some freedom to regulate their own markets there is also a statement that “this is without prejudice to the development of a single rule book and to Union mechanisms of macro prudential oversight for the prevention and mitigation of systemic financial risks in the Union and to the existing powers of the Union to take action that is necessary to respond to threats to financial stability.” The current position sees an increasing amount of common EU regulation and rule making for all financial institutions and markets within the wider EU, where the votes and needs of Euro members can hold sway.

The addition of the right for the UK to request a rethink of an unhelpful rule does not convey any veto or prevent the EU Council simply affirming their intention to press on with such a measure.

The competitiveness section is short and is a repeat of existing Union policies. Pledges to better regulation and some repeals are imprecise and similar to past statements.

The section on sovereignty does say “ever closer union” will not apply to the UK. It also goes on to state ” These references do not alter the limits of Union competence governed by the principle of conferral, or the use of Union competence governed by the principles of subsidiarity and proportionality”. In other words no powers are transferred back, and the general powers of the current treaties remain in place.

The addition of the right of 55% of member states Parliaments to request a rethink on a new law is a very weak power. It would still be easier to seek to block a new law by getting enough support around the Council table in the normal way. None of this relates to current laws or the occupied field of activities which can be extended by secondary legislation and ECJ decisions.

The section on social benefits and free movement is also weak. The document reminds us that ” Free movement of EU citizens under Article 21 of the TFEU is to be exercised subject to the limitations and conditions laid down in the Treaties and the measures adopted to give them effect.” In other words, no change.

The issue of whether all this is legally binding is not important, as so little new has been granted. Most of the text is a restatement of existing powers and requirements under the current treaties.

The EU promises secondary legislation to allow Child Benefits to non resident children to be paid at a rate related to the conditions in the child’s home state. This falls well short of the UK request to be exempt from paying child benefit to non resident children. The EU also grants an emergency brake provision to allow a member state to limit in work benefits for EU migrant workers , tapering them in over a four year period. Again this falls well short of the UK request for no benefits to be payable for the first four years.

The EU also promises eventual treaty change on ever closer union, but this will not result in powers returning to the UK.

We have been reading reports for a week or more over whether Michael Gove and Boris Johnson will join the Leave campaign. It has clearly worried the Remain campaign a lot, and they seem to have been briefing about their negotiations with the two men. Given their concern, to lose one was careless, but to lose two is bad news indeed for them.

Michael Gove followed up his decision with a magnificent statement setting out why many of us think the only course of action for the UK must be to leave the EU. He explained why our democracy matters, and why it is incompatible with the current commitments and legal entanglements of the EU treaties. We can now look forward to Boris’s journalistic abilities also helping our just cause.

The Remain campaign is much keener on arguments by endorsements, because their campaign is so thin on any good reasons for the course of action they are taking. In contrast the Leave campaign has a wealth of material of how things will be better when we are out, and much to explain to voters about how we are currently badly governed from Brussels.

Proceeding mainly by endorsement has been the way the pro EU faction has done so much damage to our country and our economy in the past. It was weight of business and political opinion that forced us into the European Exchange Rate Mechanism. That led to massive job losses, factory closures and a substantial recession. It damaged the very profits, dividends and even jobs of those who recommended it.

There was also a big business led lobby to get the UK to join the Euro. This time those of us who fought it succeeded, thanks to the commonsense of the British people. There was no way Labour could win a referendum to abolish the pound, so we managed to keep our currency despite the weight of so called expert opinion in favour.

So whilst it is good news that Michael and Boris have joined us, and their voices are very welcome, it is even better news that we have the best arguments on our side. Experience shows that so called informed opinion which favours the UK staying in the EU has so far got it very wrong. That is why many voters will now ignore the endorsements that will scurry out in the next few weeks, and will instead come to their own conclusion based on the arguments. The arguments point as Michael and Boris have realised in favour of us leaving.

THE UK MUST TAKE BACK CONTROL OF OUR MONEY AND OUR BORDERS AND MUCH ELSE.

Outside the EU the UK will be able to draw up free trade agreements with the rest of the world.
Our trade with the EU is not at risk, as they sell us more than we sell them and they do not want to impose new tariffs or barriers.

Outside the EU the UK will have £10 billion more to spend or to offer in tax cuts, the money we currently have to send to Brussels and do not get back.That’s £300 a family every year.

Outside the EU we could have cheaper and more reliable energy.

Freed of EU control we save our fish and have farming and environment policies suited to the UK landscape and needs. We will carry on paying all current EU subsidies out of the money we get back from the EU.

Outside the EU the UK will regain seats on international bodies which the EU threw us off, and will have her own voice with more influence as a result.

Leaving the EU means we can take back control of our borders and decide who to invite in.

The UK will be more secure outside the EU as we can have our own foreign policy, cease to rely on EU common policies, and control admission to our country.

Above all the UK will be a democracy again. Public opinion and elections will be able to change policies and governments instead of having to accept many laws and spending requirements because the EU demands.

The risky option is to stay in. The rest of the EU is on a wild ride to political union. If we stay we will continue to lose control over more of the things that matter to us.

Bernard Jenkin’s question resonates throughout these renegotiations.

The Prime Minister asked for too little.

The first draft offered him considerably less than he asked for.

In the end he got even less.

The good news is the whole process must by now have driven home some basic truths to all UK voters.

The UK is not in charge of its own borders, welfare system or even its economy and banking system.

We need to get the permission of 27 other countries to make modest changes.

They deny us permission for the full change we wish to make.

The whole process gums up the poor working of the EU and dominates a summit when other issues matter.

The UK wants a very different EU from the majority.

So isn’t the good European thing to do to leave?

We and they need strong relationships between the UK and the EU based on trade, mutual co-operation and friendship.

The sooner we do that the better, for their sakes as well as ours.

Their wild ride to political union is not what we want to go on. We don’t need an emergency brake. We need to get out of the vehicle.