In the run up to the new millennium a vast array of experts told us that our computers would not work and civilisation as we know it would come to a halt unless we took expensive and massive remedial actions. Many of us ignored this advice and did nothing. When we came to turn on our computers on 1 st January 200 they worked fine, as did all the main public systems.

The so called expert opinion that if we vote to leave the EU we will see a plunging pound, soaring interest rates and a recession has all the potency of the Millennium bug scares. So far despite the probability of Brexit rising, UK interest rates have fallen and the pound has held its value against the dollar. The experts have been wrong again.

I keep getting asked how can I think I am right about no Brexit recession when I am up against the Treasury, the Bank of England and the IMF amongst others? I reply, because they have been wrong about these big matters so often before. Look at the track records.

I opposed the European Exchange Rate Mechanism, on the grounds it would badly damage our economy. The Treasury, Bank and IMF recommended it. It gave us a very bad recession in the early 1990s, destroying hundreds of thousands of jobs and many businesses.

I wrote books and took a campaign around the country to explain how damaging joining the Euro would be for the UK. It was voters, not the institutions, who kept us out of a very dangerous project. The damage I feared was visited instead on Greece, Southern Italy, Spain, Portugal and Ireland. They were plunged into deep recessions, made to cut spending drastically, and ended up with very high unemployment.

I with the whole Opposition in Parliament told the Bank and the Treasury that they were too lax in expanding credit before the 2008 bust. They did it nonetheless.

I warned against excessive tightening in 2007-8. They ignored the warnings and brought several major banks down, creating the biggest post war recession of them all.

These so called experts did not forecast the biggest two recessions of recent years, and did not understand how their policies created them. Why then should we think their current forecasts have any probability of being right?

There will be no recession from Brexit. Our trade is not at risk. We start our negotiations with the rest of the EU from the position of having common rules and standards and no tariffs. Who wants to change that? Certainly not Germany, who sells us so much more than we buy from them.

A future recession is possible, in or out of the EU but it will have nothing to do with Brexit. It is more likely to be caused by bad Central banking, as last time, or by a crisis in some other major economy of the world knocking on to us. It could even come about if the Eurozone has a crash owing to the poor design of their currency. Out of the EU we will have a bit more flexibility to cushion the blows.

Yesterday I honoured my speaking commitments which had been planned with the referendum in mind but talked about other matters. The student debate became a discussion of our democracy, and a business audience were happy to think about the global economy. Today Vote Leave and I have cancelled the walkabout and speech by Michael Gove planned for Wokingham Town centre.

My newspapers tell me that the IMF despite the change of mood in the UK has decided to release its assessment of the UK economy. It has produced a flagrantly political intervention, claiming a bleak future if we leave the EU and a continuing good future if we stay in. I read its own website, which flags the UK report with a picture of Westminster in the rain at its mast head. This is a most unfortunate decision, which demeans the institution.

The forecast assumes that the rest of the EU will be willing and able to impose new barriers on their trade with us in an act of self harm, at a time when the IMF thinks the Euro area economy is weaker and more exposed to troubles than the UK one. I think this very unlikely. No-one explains exactly how and why they will do this. The German government has never said it wants any new tariffs or non tariff barriers, and they tend to lead the EU’s response to such issues.

It assumes there will be a confidence affect as well, when the leading inward investors to the UK with factories here have made clear they are going to stay as the UK workforce, domestic market and export base suits them. They have the contacts they need with the rest of the world through our airports, seaports, the English language, our liquid financial markets, and high standards of corporate governance and dispute resolution. So far the various short term forecasts cited by the IMF to talk down the pound, to talk interest rates up and to talk the UK into an early recession have failed. Sterling is a bit higher against the dollar than at the end of February when the referendum campaigns got into gear, and government borrowing rates are well down on the opening levels of 2016.

The IMF rightly highlights the weak UK balance of payments position as a negative for the economy. It does, however, point out that part of the reason for this is low returns on UK investments abroad, which it thinks might improve in due course. The IMF does not point out the UK’s large net contributions to the EU are also an important part of the balance of payments deficit which would immediately improve once we cancel the contributions, as we will if the country decides to leave. Nor does it stress that the UK enjoys a trade surplus with the rest of the world, but a large deficit with the rest of the EU. This again underlines how any new barriers to trade would be more damaging for the EU than for the UK.

Today I turned up for a debate about the referendum for students that I had agreed to do. At my suggestion we decided to pay tribute to Jo Cox and to talk about why democracy matters, instead of rehearsing the arguments for and against EU membership.

I said:

Murder always brings out great grief. The needless brutality affects us all. The sense of loss is greater as a life is often cut short which would have many years to run.

The murder of someone on public service brings out a general public grief.

We mourn as a community anyone of our military killed on active service.
We mourn as a society any police man or woman murdered during the course of their duties.
And we mourn as democrats any MP killed when doing their work to represent us.

We mourn intensely and together, men and women of all views and parties, united in this collective grief.

When an MP is attacked it is important that we do not let these crimes create barriers between MPs and those we represent.

The job can only be done with access for constituents with problems and views. It needs regular contact between MP and constituents.

I was shocked and appalled by the tragic murder of Jo Cox yesterday. I send my condolences to her family. We have all lost a great lady who worked hard for her constituents and our wider democracy.

There are also crucial issues to understand about how the asymmetric single market did damage to Uk industry. When we joined the EEC, now the EU, in 1973, more barriers to trade had been pulled down in manufacturing than in services. EU rules were often such that UK industry was badly damaged by the shock of joining and the continued shock of staying in as the rules increased and tightened.

When the UK joined the EU we had a 45 million tonnes a year steel industry. Today we are battling to save an 11 million tonnes industry.

When we joined the EU we had a 400,000 tonnes a year aluminium industry. Today we have just 43,000 tonnes of capacity left.

When we joined the EU we had 20 million tonnes of cement capacity. Today we have 12 million tonnes.

Just before we joined the EEC in 1971 we had a 1 million tonnes a year fishing industry. Today we have 600,000 tonnes.

The October 2013 government “Future of Manufacturing” Report shows that between 1951 and 1973 metals output rose 3% a year. Since joining the EEC/EU it has declined by more than 6%

Between 1951 and 1973 food and drink output rose by 5.6% per year. Since joining the EEC/EU it has fallen by 1% a year.

Between 1951 and 1973 textiles output expanded at 2.6% a year. Since joining the EEC/EU it has fallen by more than 6% a year.

Whilst it may not be fair to blame all this decline on membership of the EU, as there are other factors, it nonetheless shows categorically that joining the EU and helping create the so called single market has not helped us grow and has not saved many of our industries from decline.

In some cases EU policies are the main driver of the disaster. The Common Fishing Policy is clearly the main reason for the dreadful decline of our fishing industry, as many foreign vessels were licenced to take our fish. Our energy intensive businesses were often damaged by the high energy prices required by the EU common energy policy.

The EU has prevented UK subsidy of industry under its state aids rules, but has often provided subsidised loans and grants to businesses to set up elsewhere in the EU. The UK has seen a spate of factory closures balanced by new and expanded facilities in poorer EU countries. The UK lost van production to Turkey, car capacity to Slovakia, chocolate to Poland, domestic appliances to the Netherlands and the Czech Republic and metal containers to Poland amongst others in recent years. In various cases there was an EU grant or loan involved in the new capacity.

Looking at our huge balance of payments deficit today in goods with the rest of the EU, we can see the long term impact of the EU’s damage to our manufacturing capacity.

This April’s balance of payments figures show us in heavy deficit in machinery, vehicles, electrical machinery, mineral fuels, plastics, iron and steel, wood and clothing. Last year our total goods trade deficit hit £85 billion with the rest of the EU. Between 2008 and 2015 our exports grew at 5% with the rest of the world, whilst falling with the EU.

Perhaps remain might like to answer the following questions:

Why have we suffered industrial decline and closures with production shifting elsewhere in Europe since joining the EEC?

Why do trade in surplus with the rest of the world but have such a huge deficit with the EU?

Why have we ended up importing fish, electricity, steel and much else when we used to self sufficient?

Today UK shares are up and the pound has rallied a little against the dollar. That is probably not what the Chancellor had in mind.

Despite all the efforts of the Treasury, other world governments, the IMF and various economists to talk the UK down on fears of Brexit, markets are just not doing what they wanted them to do.

Remain  seems to have given up on their short term forecasts of higher government borrowing rates, as these rates have plunged along with other sovereign bonds around the world. Clearly there is no strong Brexit affect on UK ones.

The pound hit a low this year of $1.385  at the end of February when the markets did not think Brexit at all likely. Now they think Brexit is much more likely, with a probability to them of around 40%. This would imply the pound should now have fallen around 40% of their  anticipated fall for Brexit, but instead it is at $1.41 today, still above its February low.

The share market hit a low of 5536 (FTSE 100) on February 11th this year, well before markets thought Brexit possible. Today it is at 5973.

 

So now we know what the plague of locusts looks like. The latest threat from Remain is an emergency budget backed by Mr Osborne and Mr Darling to slash spending and raise taxes. This despite both main parties pledges on spending in the NHS.

The proposed tax rises would be illegal under Mr Osbornes own past legislation put through to assure people there will be no   tax rises this Parliament in the main taxes.

This must be the last absurd threats of the  Grand coalition of senior Labour people and Remain Conservative Ministers battling to save the unpopular EU from the common sense of the British people. I along with many other Conservative MPs see no need for any such horror budget and would not vote for one if Mr Osborne was silly enough  to try. As we will be better off out of the EU the post Brexit measures will include spending more on the NHS and abolishing VAT on fuel.

 

How much more damage will we allow the EU and its so called single market do to British business and our jobs and incomes?

There are several important facts about the EU’s single market that Remain do not recognise.

 

1. Since it was completed in 1992 the UK’s trade in goods has not grown with the rest of the EU.
2. Between 1951 and 1972 when the UK first joined the EU manufacturing output rose 4.4% a year. Since we joined the EEC/ EU there has been no growth in UK manufacturing.
3. The trade of non EU countries with no special trade deals with the EU like India, China and the USA has grown more quickly with the EU than our trade from inside it.
4. The government’s own foresight report said that “Output and productivity growth (of UK manufacturing) was reasonable 1951-73” and worse after we joined the EU.
5. The main advantage of the single market, that there are common rules and specifications for all 27 other EU countries making it easier to sell into the market, applies whether the exporter to the EU is in or out of the EU itself.
6. The EU never completed its single market in services. The danger is that as it does so its rules and regulations will damage the UK rather than assist us. The City is often in dispute with the EU over its proposed rules.
7. The single market has been used to add on all sorts of other laws, taxes and obligations which the UK does not want and have little to do with trade.
8. The Germans and others see the Euro as an integral part of the single market and are not happy about the UK being permanently out of it.
9. You can trade quite happily with the single market without being in it as a member.
10. The EU’s trade agreements with a range of smaller countries will automatically apply to both the UK and the rest of the EU as the original parties, if we leave.
11. Much of world trade is not under any special trade arrangements.

 

 

 

 

Remain and the Treasury like to attribute all market moves to hopes and fears of Brexit. They  should be thrilled to be proved wrong on government interest rates. They  said they would go up if Brexit seemed likely.  Instead, as  pro Brexit  polls have improved since the turn of the year UK government borrowing rates have plunged. The 10 year rate is down from 2 % to 1.2%, a fall of 40 %. Bond prices have surged.

 

Trying to talk us into higher rates has not worked.

When we remove the hated tampon tax and VAT on fuel, we boost family incomes and help tackle fuel poverty. In the EU we are not allowed to do that, as they control some of our taxes.

 

We need to take back control over taxation. The European Court has made us pay back huge sums of company tax we have collected from large companies, as they can override Parliament’s wishes on how much tax companies should pay. Out of the EU we will avoid this unhelpful interference. Last Parliament we had to pay back £7,000 million, and the Treasury forecasts the same again this Parliament – or more. We need that money for the NHS.

 

Our trade is not at risk. They sell us more than we sell them. Germany has no wish to see higher tariffs and barriers against her cars, nor France against her food and wine. As they do not want to stop their trade with us, they understand they cannot impose new tariffs against our sales to them.

 

We are constantly asked what model of trade arrangements will we have on leaving. Our campaign has never wanted the Norwegian or any other foreign option. We will have the British model. It will be very similar to current arrangements, as Germany and the other leading exporters to the UK have no wish to damage their trade.

 

We are told we will lose the main advantage of the single market, that it offers common standards and specification making it easier to supply. On the contrary, that remains true whether we are in or out. The USA and other exporters to the EU benefit from the common standards without being members and without having to pay the fees for belonging.

 

We are told we will lose global influence if we leave. On the contrary, we will gain. The UK will retake her seat at the top tables of the world where the EU has replaced us. Instead of having to compromise and agree out positon on trade matters or climate change issues with 27 other EU countries, the UK will be a full member of the global body with our own vote and voice.

 

It is not unusual for the main global bodies and the Uk Treasury to all agree the same or similar forecasts – they rely on common data and common assumptions, and often copy from one of the other’s models. Nor is it unusual for their group think to be wrong. They failed to predict the recession and huge damage done to the UK economy by the European Exchange Rate Mechanism, they failed to see the Great Crash of 2008 coming, and they recommended the Euro. With a forecasting record like that I see why many people do not now believe their long term forecasts for the UK out of the EU.

 

Out of the EU we can take back control of our borders. With controlled immigration we can cut the downwards pressure on UK wages and ease some of the pressures pushing up house prices. We need to relieve the pressures on our public services brought on by uncontrolled immigration.

 

Out of the EU the government will no longer have to dissemble over Turkish visas and Turkish membership of the EU