I am grateful to facts4eu for reminding us of this important truth. You do not have to bind yourself to the EU to trade with the EU. Our industries already have mixed supply chains with components and raw materials from non EU countries getting just fine as well EU product.
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The loss of Conservative leaders
My years in the Conservative party have seen several leaders destroy themselves politically through a fanatical commitment to the EU. The odd thing is they have adopted this stance when it has annoyed many members of the party and evoked strong opposition from some Conservative MPs. Worse it has done considerable damage to the country and its economy, leading to a loss of confidence by voters generally.
John Major destroyed his leadership by insisting on crippling the UK economy by putting us into the European Exchange rate mechanism. The resulting boom bust undermined the Conservative reputation for economic competence and put the partty out of office for 23 years.
William Hague refused to take us out of the pro federal EU grouping of the EPP which annoyed supporters and added to his tribulations. His slogan of in Europe but not run by it was not convincing as it was not backed by a policy to get powers back. He won back just one seat in 2001 after the disastrous result in 1997.
David Cameron argued on the wrong side in the referendum and lost, destroying his Premiership. He could have stayed neutral or backed Leave and led us out in good order after the result. I never understood why he thought Remain would win or why he let them run such a nasty and negative campaign.
Mrs May appointed advisers who clearly wanted to recreate many of the features of our membership of the EU despite the vote to Leave. Her obstinate commitment to an unacceptable lock back in Treaty which the public has decisively rejected has led to the breakdown of her authority. Cabinet members campaigning to become leader need to now create the vacancy they crave by telling her she cannot continue. She will be the third PM victim of trusting the EU too much in ways which lose the trust of the UK people.
Mrs May’s latest presentation of the Withdrawal (Delay in leaving) Treaty
Not a word or comma of the Treaty has been changed. The PM has long given up on any idea of renegotiating the Withdrawal Agreement. As it remains the same Agreement I trust Parliament will give the same answer, and vote it down. I will certainly continue to oppose it. Better still would be to get Mrs May to resign now. If her only policy is an Agreement the public and Parliament have roundly rejected, it is difficult to see the point of her staying in office.
Today she says she will table a bill and allow Parliament to amend it over the customs union, single market, second referendum and the rest. Most of these things would need negotiation with the EU and fall later in the process if and when the Withdrawal Treaty is approved. It would be a deeply damaging way of negotiating our future with the EU, having made far too many concessions in the Withdrawal Treaty.
The suggestion that Parliament could legislate for a second referendum is a particularly damaging idea. Up to this point Mrs May has always opposed this with many good reasons to do with our democracy and the promises all made prior to the Peoples vote on the EU in 2016. I assume many more Conservative MPs will now join in voting against should this proposed legislation be brought back to the Commons.
A short Committee meeting with a big consequence
Sir William Cash, I and others opposed the delay to our exit from the EU when the government embarked on it. We complained about the way the government agreed to the delay on the terms offered by the European Council and rushed it through in UK law by a Statutory Instrument that was not even debated. Yesterday, after much delay and argument, the government allowed Sir William a ninety minute debate in a committee where there was a secure opposition and government majority to approve the Statutory Instrument anyway. I am grateful to him for securing this debate and for submitting an important legal case about the way the government pushed through delay to our exit.
Many of us attended the Committee though we had not been included as members of it because we wished to put the case against delay, and to support Sir William’s legal case concerning the imperfections of the Statutory Instrument which in his view made it void. In the Commons any MP can attend and speak at a committee, though only those made members of the committee can vote. Time did not permit speeches from most of those wishing to speak, though a series of lively interventions made sure the case for exit did not go unheard. I was allowed a couple of minutes at the end of the proceedings.
I said that it was sad day for Parliament when something of this magnitude fell to be debated in a small committee over just 90 minutes, As it entails the spending of additional £7bn or more on EU contributions, and submits us for many more months to EU laws and requirements, it should be debated by the whole House and voted on by every MP. I drew attention to the growing gap between many members of the public and Parliament over honouring the referendum decision. Many voters believe MPs should keep their pledges from the 2017 General Election when both Conservative and Labour promised to get us out of the EU by 29 March 2019 in accordance with the laws Parliament passed and the wording of the EU Treaty. I explained why our democracy needs us just to get on with it, to leave. When we voted to renounce the EU Treaty we did not vote to lock ourselves into two new Treaties.
The conventional media decided to ignore these heated and important exchanges between pro Brexit MPs and the combined ranks of the Conservative and Labour establishments. Labour simply failed to speak up for leaving and would not oppose the government.
The reign of experts and the “post democratic”age
I like good experts. Modern science and technology has delivered some great advances which improve our lives. If I fell ill I would of course consult a doctor and seek expertise.
The problem is the present age is cursed with some experts especially in economics and government who keep getting it wrong yet they still expect the rest of us to accept their verdicts however damaging or daft they may be.
Lord Mandelson summmed up the direction of travel when he talked about transition to a post democratic age. Modern governments try to give away their powers and responsibilities to international and national so called independent bodies full of alleged experts. They seek to prevent elected governments changing things by locking future governments into the system by binding International treaties. For years our budgets and economic policy were first dictated by the European Exchange Rate Mechanism and then by the Maastricht debt and deficit requirements.Our energy policy is governed by Climate Change Treaties.
Some people want us to be democratic so they oppose locking ourselves into the rules and decisions of national and international bodies in principle. Other people would not mind if those bodies made wise decisions and did well, but understandably get cross when they lead us to disaster.
The truth is you cannot say you live in a democracy if crucial parts of government are under independent expert control with no democratic accountability. In practice in a democracy like the UK Parliament and government are held responsible for big decisions even if they are taken by so called independent experts. In a later post I will look again at how the Bank of England is not in fact independent and how wrong it has been on major issues of economic and financial policy over my adult lifetime. It is crucial that fallible expertise is subject to criticism and influence by elected officials and can be overturned if necessary by the votes of the people. The EU has threatened this important part of our democratic settlement with its rigid legal structure. Those in the Eurozone suffer even more from its defects.
Our aim should be helping people out of poverty and into better paid jobs
One of the main arguments between socialists and conservatives is over the main aim of economic policy. Conservatives want to raise living standards, to help people be better off. Socialists usually want to lower or remove inequality.
These two varying aims require different policy responses and achieve different results. Of course all sensible socialists would also want higher living standards, and all democratic conservatives agree the tax and benefit system should remove some of the inequalities market economies generate. Nonetheless deciding based around a primary aim of betterment for the many or a primary aim of cutting inequality produces different results.
Mr Osborne adopted more of the socialist preoccupation in his budgets, worrying about measures of inequality more than about sluggish rises in average real incomes. He worked out how to administer a bigger tax hit to the wealthy and how to get rich people out of the country or to stay out of the country. One of the easiest ways to cut inequality is to offshore the richest people by having a hostile tax regime towards them. This may then reduce investment and job creation for everyone else as these people live and invest in a more friendly climate elsewhere. Both France and Italy are now wooing the rich with a better tax deal for that reason.
A test of which motivation predominates in a policy maker is that of the Laffer curve. If a Chancellor insists on imposing a tax at a rate that reduces the tax take, we can assume he does so to create more equality at the cost of less income and lower living standards. The decision of Mr Hammond and Mr Osborne to levy Stamp duties that cut the revenue must be based on this, and their persistence with a 45% higher rate of income tax which also lowers revenue.
I want a policy based on a more rapid reduction in low incomes and no incomes. That requires a policy which allows entrepreneurs, footballers and great entertainers to keep more of their earnings so they stay here and pay tax here. They then also buy more things here, invest more here and employ more people here. Jealousy is a nasty emotion, and not a good policy. It makes us all worse off, with less money to spend on public services. As you achieve more growth you can then also lower tax rates on the rest of us, where lowering the rate cuts the revenue for any given level of economic output.
Treasure Island
Facts4EU.org have posted today a useful guide to the continuing huge trade surplus in goods the EU continues to run with the UK. Since the referendum vote they tell us the EU has earned itself a wonderful £250bn trade surplus, so no wonder they want to try to lock us in to their trading terms and laws to keep it going. It is a reminder of how good a negotiating position the UK failed to use during the talks on our exit, and is worth a look on their site.
Good prices and plenty of choice
Whilst shopping on Saturday I was struck again by the huge range of choice of products, the good displays and by some of the keen prices on offer on the High Street.
I saw a Potato masher made of good strong stainless steel with a pleasant wood handle for just £3.99. Assuming a 50% only mark up by the retailer that means it was bought for just £2.67 from the manufacturer, including all packaging and shipping costs. Maybe the mark up was higher and the item cost just £2 delivered half way round the world. It had come from China by ship and truck. What UK manufacturer could match that cost?
Or take a well made and strong pair of kitchen scissors for £5.99. They came with plastic handles over the steel, good cutting edges, and all encased in a rigid see through plastic pack for ease of getting home. They may well have cost the shop between £3 and £4.
There is plenty of manufacturing capacity in the world for everything from clothes to housewares, offering a great array of different styles, colours and specifications. The excess capacity in China and elsewhere means strong downward pressures on the prices of many goods. The family budgets are under pressure thanks to the cost of government – Income Tax, Council Tax, VAT, fuel tax, car park charges, vehicle and broadcast licences, rail fares and the rest – and the increases in prices of various services with a higher labour content.
Consumers are spending relatively more on services and less on goods. As real wages rise so people can afford a few more luxury or discretionary items, with basics taking less of the budget. The new Wokingham Town Centre has a higher ratio of restaurants, coffee bars, specialist food bars and cocktail parlours, reflecting the wish of shoppers to afford an experience as well as simply buying more goods. The digital pound is also surging, with more being spent on mobile phones and tablets, on film downloads, on internet papers and magazines and various specialist apps.
The public sector needs to get smarter at adapting modern technology so it too can be more flexible in the services it offers and keener in their costing or pricing. The USA is pushing back on China to stop it dominating in tec as well as consumer goods, and to protect their data and networks.
Where is the Withdrawal Treaty Bill?
Will Mrs May really ask us to vote for a fourth time on this unpopular Treaty by bringing forward the Bill to ratify it? She says they will. Why then does she not publish it so we can talk about it properly? Is it so bad it must be kept secret?
Mrs May’s refusal to change her mind on this draft Treaty means she must resign after so many defeats for it.
Further comments on Stephen Barclay letter
A couple of correspondents have asked me to provide a more detailed response to the Barclay letter.
In the main areas his letter confirms what I said about the draft Treaty. He agrees that as long as we are in so called transition the UK is “subject to existing and new rules as if we were members” and pays full budget contributions. I have always pointed out we lose vote and voice so we are no longer full members with rights, but we would be entirely subject to EU laws, rules and budget requirements. That does not sound like leaving. We then need to negotiate our way out, which according to the government will entail locking us into yet another EU Treaty to be determined. Its a very expensive invitation to more talks about leaving.
He confirms that the Northern Ireland Protocol creates different government for Northern Ireland over customs, trade and the single market. Of course he is right if the rest of the UK accepted EU requirements and changes as Northern Ireland would have to we could avoid separation of conditions between NI and the rest of the UK. Again that does not sound like leaving.
He confirms that we will face full budget bills up to the unclear end of transition and will have further obligations up to 2028. He says the further adjustments made up to 2028 might be downwards, but clearly they could be upwards from an EU that is cash hungry and inventive on claims.
He suggests £35bn to £ 39 bn is a small sum. I beg to differ. He also concedes this is just an estimate . Given the vagueness of the headings I think it could well be a lot bigger. He concedes the EU has a big role in calculating and sending the bill and adjudicating disputes.
He doesn’t disagree we have been short changed on the EIB by losing our share of accumulated reserves.
He agrees we have to meet pension liabilitues and payments to Turkey, but says this is fair.
On individual Articles he usually argues continuing ECJ powers and related matters up to 2028 that I listed relate to matters that occur up to the end of transition. I object to this long tail, providing an enduring opportunity for the EU to demand more cash or legal observance because they say something started or occurred before we left. It gives them a lever which could be damaging to us
He agrees the ECJ continues to rule all the time we are in so called transition. This would be a binding Treaty which would greatly reduce our capacity to govern ourselves. There is less disagreement than the general remarks of his letter might suggest. He places a favourable construction on how the EU would behave if we signed.I think they might push the clauses against us rather more.