RexN Euroblog

RexN Euroblog

RexN's euroblog

This has been set up with a view to the EU referendum.

My own interest derives from teaching Economics, making lessons relevant by using the various treaties to add relevance to theory.

Views expressed are my own and hopefully contribute to debate.

When to invoke Article 50 and why

EuroblogPosted by RexN Mon, June 27, 2016 09:59:29

There is a natural impatience in invoke Article 50. Pressure is added by demands from the EU to get on with it. Should we listen?

Article 50 provides for an orderly withdrawal from the EU. That such a withdrawal is carried out in a friendly way, being a neighbouring nation, is subject to Article 8.

The first step in any analysis should always be to question the question.

Debate during the campaigns was focused by the Prime Minister who initiated the referendum, honouring a manifesto commitment to the British people. His chosen battle ground was the economic case and access to the Single European Market (SEM). The question that remains is whether the SEM should in fact be our priority?

To expand on the context, Cameron stressed the current dependency of our export markets on the EU, currently estimated to be 44% of exports.

The next step in analysis is to identify the perspective.

Yes, the 44% figure of our exports seems to be significant. We appear dependent. It is not a figure that should be considered in isolation. Of our export growth, 90% is with the rest of the world. If imports are added into the equation, we currently run a trade deficit with the EU of around £8bn per month.

If we shift the perspective, we can immediately see that the 56% of exports that go to the rest of the world perhaps should be prioritised. We can also go further and see that more jobs in Germany and France are dependent on trade with the UK than are UK jobs on trade with Germany and France.

There are also assumptions made that are open to challenge. Some of these might affect negotiating positions.

For a moment, think back to 1944. Hitler occupied Europe and the allies planned D Day. Would Roosevelt and Churchill have asked Hitler to choose our mode of attack? Would they have agreed to use tickling sticks whilst mounted on unicycles launched from pedalos against Hitler’s choice of artillery and tanks? Of course not!

We are asked by Churchill’s successor to recognise that if we want to have access to the SEM, we have to accept ‘free movement’.

Now, let’s extrapolate some obvious conclusions to real world scenarios.

If no agreement can be reached, the fall back position is World Trade Organisation (WTO) rules for trade with the EU. The position has changed since we joined the EU. The Uruguay Round of what was then the General Agreement of Tariffs and Trade (GATT) gave rise to the change to WTO. Barriers to trade are not what they were.

We know that the EU is actually a customs union, encompassing free trade for countries within the EU. Barriers are put up to countries outside.

The simplest question is; what is access to our market worth?

Against a background of a monthly trade deficit of £8bn with the EU, what is more important for the EU is access to the British market. An estimated 3 million German jobs alone are estimated to be dependent on car sales to the UK. That is before agricultural jobs across France are considered, with cheese and wines.

Should WTO rules come in, tariffs would be applied on German cars of around 10%. EU produced Fords and Vauxhalls become more expensive, putting at risk the EU’s inward investment against British made cars under Japanese ownership.

If we do wish to buy a Mercedes, it does not have to be from Germany. We can negotiate a trade deal with Brazil, another home for Mercedes assembly. It doesn’t matter to us whether German or Brazilian jobs are supported.

The message for the EU is simple. If you want a deal without free movement, fine, we shall listen. Otherwise, we have two years for Mercedes to prepare a right hand drive assembly line. We have that time to negotiate a free trade deal with English speaking biggest value market, NAFTA, with the Commonwealth, a growing market with 1/3rd of global population.

We know where relative growth is. Our priority is to deal with friends. You have a need for our market. Our friends helped liberate Europe twice. We owe them more than we owe you. Drop free movement and we shall listen.

To invoke Article 50 now is to accept that we are weaker than the EU. We accept that we follow their diktat. To start to negotiate on our terms recognises our position of strength as a major economy in the world. We shall talk when we are ready and we have so many better options to explore.

It is an expression of good will not to exclude French, Dutch and Spanish trawlers from British waters. We are a magnanimous people. We have given the EU longer to adapt.

Yes, we can jump now. We can also create pressure. It makes sense to give our negotiators a chance to evaluate the real situation. It may take time to realise quite how strong we are. We will be stronger by taking time to write our own instruction manual rather than leap in and play with our new toy before we understand what it is capable of.

What is more important is to develop a strategy that might be attractive to politicians of all British parties, one that is flexible and one that represents the global interests of the United Kingdom and the global society. We can help to generate sustainable growth in developing countries, bringing us cheaper goods whilst helping poorer societies by granting them a market.

Ultimately, it is for the government of the day to decide. Never forget that we are in a democracy. Like students who take a gap year before choosing a career, we have time to decide on our best long term options. Let’s have a look at the world as a whole before committing ourselves to an option we may regret.

Why not give the next Prime Minister something to play with?

Britain delivers

EuroblogPosted by RexN Fri, June 24, 2016 08:06:10

The people have spoken. We have stood up to Project Fear and shown a desire to forge a way ahead in the world. Britain has a brave new future.

This site was set up to make a small contribution to ensuring an honest debate. If the people of Britain were to choose to Remain, it was our hope that we would do so with eyes open. If the result was to Leave, it is in full knowledge of the challenges ahead too.

In a political environment that is increasingly nepotistic, there has been a huge wake up call for our representatives to reconnect. Amidst threats of delaying, ignoring and acting against the desires of the British public, the public have had our say.

It should not be forgotten, however, that 48% have voted against taking ownership of our own destiny. It is also important for those politicians who have campaigned against the majority act in a way to ensure that we maintain a close, friendly and harmonious relationship with our neighbours.

We are not breaking away from the European Union, we are changing the nature of our relationship. We will still buy EU goods, as long as they do not put up barriers. It is in everybody’s interest to work together for future prosperity across our continent.

There will be time ahead to make a more detailed analysis of the issues. The political landscape has to change in many ways.

The time is right for Britain to remind itself what makes us great. History may be in the past but it has a habit of repeating itself. Britain has given much to the world. She has stood up to dictatorships and, with the help of our Commonwealth, American and global friends, helped keep Europe free, whether from Napoleon, Hitler or the Soviet bloc.

We have been pioneers in world trade, the Industrial Revolution and technology. London 2012 demonstrated in the sporting environment our ability to excel beyond our means. Those Olympics were a cultural celebration too, surrounded by a positive mood of friendliness and optimism.

Britain also has a reputation for the stiff upper lip. We can move ahead, knowing that we have the steely character to proceed in a measured way, not to mention with good humour.

Now that the membership issue has been resolved, let us move ahead with a global perspective. Our friends will still be our friends. We can enjoy better relationships with all of the.

Britain is a positive nation. We have to move ahead in that spirit.



What will Brexit Friday REALLY look like?

EuroblogPosted by RexN Wed, June 22, 2016 17:41:53

The decision should be known early on Friday morning. Of course it could go either way. If the country decides on Brexit, what will the United Kingdom look like?

There will of course be awkward moments. Cameron and Osborne’s bluff will have been called. After months of spreading doom and gloom, will Putin be jumping for joy? Will World War 3 break out as the mighty Russian fleet storm the Northumberland beaches? Certainly not!

What is more certain is that Cameron will have to give the news conference of his life.

Hindsight, as they say is 2020 vision. 2020 is the scheduled year for the next general election. Cameron has already said that he will not be standing. He may wish to look back at what would have led hi to this situation.

The referendum, before the end of 2017 incidentally, was a pre-election promise, perhaps a short term measure to unite his own party after a term of uneasy coalition. Conservative seats were under threat from UKIP. The promise secured a majority.

Also in the manifesto was a range of promises about what would be secured in his “reformed” EU. These were not achieved yet he called a referendum with undue haste. Do we know why?

We may already have a clue as news emerges that a meeting will take place next week to discuss Turkey’s accession programme towards EU membership. This has surely not been arranged at the last minute? Free travel has already been granted to deal with the migrant crisis. Rules have been relaxed before.

What is equally, if not more pressing, is how the markets could respond to a vote to Leave. Will we face a run on Sterling as we have been told?

Markets are sensitive creatures. They can respond very quickly. We live in a world of information technology, where billions can change hands in seconds. That same technology provides for predictive models. It also provides for finesse in decision making.

The possibility of a Leave vote winning has already been a 50/50 possibility. Experienced traders will have already incorporated different outcomes into their models. It is likely that any moves will already have been discounted or hedged against.

Markets can also be very powerful. Ironically, 2 former Chancellors who support Leave have very real experiences on how to deal with “fast” markets, Nigel Lawson and Norman Lamont.


Lawson was Chancellor for the Stock Market crash of 1987. In a stroke of genius, he undertook to guarantee the share price of the newly floated BP at 70p. This became a safe bet for the Kuwaiti Investment Office (KIO) who led the path to relative stability.

Perhaps a closer match came 5 years later when Lamont faced a currency crisis which led to withdrawal from the Exchange Rate Mechanism (ERM). Currency speculators around the world sold Sterling, effectively challenging Britian’s ability to support Sterling. After costly intervention, interest rates were raised from 10% to 12% and 15% in order to attract buyers before defeat was conceded.

The currency became free floating. Effectively, the market for Pounds became too depressed, the price became attractive enough to buy back. The market corrected itself, albeit at a lower price.

After the market had stabilised, the following day saw a rise of 8% in share prices. The market had effectively corrected itself at what many would say was a more appropriate level. Britain went on to experience more than a decade of growth.

They key was to keep a cool head. Moments of panic cost the taxpayer significantly. Dealers did what dealers do, make money. Those who sold at the wrong time lost out.

In the heat of the moment, the message should be clear. Markets correct themselves, particularly those markets with a free flow of accurate information. Those who could lose need reminding of the broader picture.

So what should Cameron be saying in the event of a Brexit vote on Friday morning?

He and Osborne are in a difficult position, brought about by their own short term agenda. They have predicted economic collapse. It will obviously be time for a more balanced approach.

Britain will have voted to be a land of opportunity, choosing to be free from the constraints imposed by membership of a customs union that puts up barriers to the flow of goods from around the world. Asset prices may suffer in the very short term but markets will need to be reminded of the longer term prospects. In a moment of uncertainty, the path ahead should be certain.

The process for Brexit is covered by Article 50. This provides for a two year period to negotiate terms of exit. The time to panic is not now but at some stage within 2 years of that process beginning.

That process should not begin immediately. Parliament will have to vote and we should build up to the vote in an orderly way. A cross party committee, similar in structure to a Select Committee, should be assembled to consider priorities and process. The time to give notice under Article 50 will be when that committee has reported, perhaps 6 months from now.

A further provision from the Lisbon Treaty also provides guidance. No apologies are made for presenting Article 8 in full:

1.The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation.

2. For the purposes of paragraph 1, the Union may conclude specific agreements with the countries concerned. These agreements may contain reciprocal rights and obligations as well as the possibility of undertaking activities jointly. Their implementation shall be the subject of periodic consultation.

Investors, dealers and speculators may need reminding of Britain’s strengths. We are next door to the EU. We have a history of diplomacy and working with friends around the world.

Britain would still be a member of G7, have a permanent seat on the UN Security Council, and regain a seat on the WTO. We will still be an advanced economy, leading the way in services and with hi-tech opportunities and a liberal market.

We would have to recognise that alternative opportunities include an EU with uncertainty, particularly around the southern fringes. In the spirit of Atricle 8 we intend to cooperate fully, supporting where we can and determined to negotiate an appropriate free market without “free movement”.

Cameron would certainly have to remind us that he has already pledged not to continue as Prime Minister beyond 2020 and that he will be standing aside to allow his successor to take the reins for the whole period from when Article 50 negotiations start.

Yes, there may be very short term instability in the market place. If Sterling were to drop, perhaps we could start to look forward to a decade of growth, as we did after 1992.

He need not admit that he got his tactics totally wrong. He can withdraw gracefully, having led Britain to a landmark in her proud and innovative history. The people will have given the British government a mandate to negotiate on their behalf, to be a strong, independent nation, maintaining friendly relations with our neighbours whilst seeking opportunity elsewhere.

Compared with Cameron’s and Osborne’s Doomsday scenario, the reality should, in fact, be a typically British understated signal to a bright new future.



Remain, Leave or undecided, please vote

EuroblogPosted by RexN Wed, June 22, 2016 11:43:28


With one day left before being able to vote in the referendum this is a plea for you to vote, whatever your position.

We have a choice as to what sort of future we see for our country. A century ago, British, Commonwealth and other European troops were battling in the trenches to give Europe a free future. Just over 2 decades later, the same nations were fighting to free Europe from Hitler’s conquests.

Democracy is a valuable gift, paid for around the world with lives.

Since the Maastricht Treaty, the EU has been a cause of great debate. Bill Cash founded the Maastricht Referendum Campaign (MaRC). Sir James Goldsmith founded the Referendum Party which contested the next general election.

In their own ways, both saw that Maastricht was a turning point in history. What had been labelled as a Common Market became more. Countries across Europe were starting to agree to constrain economic policy. What was an obscure group of paragraphs (article 109 and protocol J) provided not only a path to monetary union in Europe but limitations on how a country could manage itself.

A system was created which expanded influence into foreign policy, military, criminal justice, and judicial cooperation. The middle word was dropped from the title of European Economic Community.

The Referendum Party included candidates and campaigners from all walks of life, all political parties and perhaps most importantly, those who either wanted to stay or leave the new structure. The decision was so big that we believed that the public should have the right to decide our destiny.

Several more integrating treaties and 24 years later, Cameron has given us the opportunity finally to have a referendum. He is asking us to vote to Remain in or Leave a “reformed” EU, before those “reforms” have been ratified.

In order to honour his manifesto pledge, the referendum could have been held any time until next year. Cameron opted to bring this forward with undue haste. His “reforms” amount to mere tinkering around welfare for migrant workers. History will show why he has acted so quickly on “reforms” that do not meet his manifesto pledges.

Did he bring the referendum forward to hide new measures? Did he act quickly to ambush opponents of EU membership? Did he intend to show himself off as a statesman when the United Kingdom hold the presidency of the Council of Ministers in 2017?

In reaching your decision, please remember that this is a vote on whether we see our future on an EU that is committed to ever closer union. This is not a vote on the policies of Cameron/Osborne or Johnson/Gove. It is a vote on whether we wish to share our decision making with the EU or whether you trust our democracy to provide for our future.

Let’s have a look at the arguments:

Vote Remain

We could start at a number of points. Since Cameron made the focus on his “reform” as welfare benefits for EU migrants, this seems somehow appropriate. If you believe Cameron, those reforms will limit immigration. If you believe Corbyn, we have to embark on infrastructure development to cater for uncontrolled migration. You have the best of both worlds.

The main thrust of the argument in favour has been Project Fear. If you believe that uncertainty will lead to reduced public expenditure, increased unemployment, reduced income (or at least not growing as fast as otherwise), inflation and more, then that is a powerful set of fears, if true.

To believe in Project Fear then we would have to believe that by leaving, our neighbours would oppose a trade deal which maintains the status quo. We have to believe that they would not seek to preserve jobs in their own countries, that they wish to put up barriers to selling us wine, cheese, cars and much more besides.

There are many sound motivations. The argument has existed for years that the EU ensures peace in Europe, after all, the roots of the EU come from linking economies to prevent war. It is legitimate to believe that this has more relevance than the United Nations or NATO.

You may believe that the EU will successfully negotiate trade deals on our behalf and that TTIP will protect the NHS. You may agree that EU regulations are designed for our protection. You may believe that the EU acts as a brake on unprincipled domestic politicians.

On balance, it is your decision to agree that the cost of membership provides enough benefit to ensure that we Remain. You may wish to validate an unreformed EU. Fear is a powerful weapon.

Vote Leave

There are so many reasons to justify your decision. First and foremost, perhaps you believe that, however flawed the British political system may be, it is democratic and transparent. We have the choice in changing the direction of our government.

It may be that you have a global outlook, combined with a faith that an innovative culture will allow us to thrive in a bigger society, that by regaining our seat at the World Trade Organisation, we can break down barriers for developing nations and provide markets and relieve poverty. We can even work with Russia on getting Tim Peake into space.

There is also the possibility that you value links to the voluntary Commonwealth, including respect for the lives of those who contributed to freedom in Europe and elsewhere. Indeed, the Commonwealth account for 1/3rd of the world’s population and 1/6th of the world’s economic activity with potential for growth.

You might be voting to Leave despite political bullying from Cameron and Osborne, showing the sort of fighting spirit that Britain is renowned for, the belief that Chariots of Fire, the medal haul from London 2012 and more represent what makes Britain still great.

You may recognise that as, what one authority rank as the 2nd “global” power, the 5th largest economy, G7 member, WTO member, UN Security Council member, the most widely spoken language, we can lead by example, alongside Europe but with a worldwide reach. We have much to offer.

Whether it is the legacy of all that is represented by the Woolsack, pluralist society, the Industrial Revolution, economic thought of Adam Smith, John Maynard Keynes, Patrick Minford, even home to Engels and Marx, Britain has always provided a stimulating and radical environment.

Whether it is innovative technology, thought or the quest for the perfect Norfolk Black turkey, Britain has potential and passion for excellence that you can set free. You can be proud to seek opportunity.

Undecided

Your vote is important. The higher the turnout, the more legitimacy the country gives to whatever decision is reached.

You may wish to consider the mechanism of Article 50. In short, when Parliament passes the decision to Leave, there is a provision for a 2 year transitional period to normalise trading and institutional relationships.

It could be that EU members play hard ball, that they insist on freedom of movement as a part of any deal. Our representatives will have a mandate to work on our behalf. We know that job for job, the EU has a more vested interest in our trade deficit than we do.

Project Fear has ramped up the pain factor by saying that this is a one time only vote.

If the EU does reform to become more liberal rather than more centralised, we will have at least 2 years to change our minds. A majority of MPs, who could have a future career in the European Commission, are in favour of remaining. Do we honestly think they would not bring a motion for another referendum if the EU were to offer genuine change?

There is history in Europe. Ireland has voted against measures and achieved reform, Denmark has voted against and achieved reform. France voted against a constitution and achieved a step back.

Britain is far bigger and far more global influence than Denmark or Ireland. We also pay in 14% (plus retrospective budgets) of the net contribution.

There has never been a 2nd vote when an electorate has agreed to an EU proposal.

In conclusion, we live in a fantastic example of democracy, where MPs are approachable, where we can watch government being scrutinised by backbench MPs on select committees, even if that does not happen in the EU. Please support the democratic process for which millions have died. Their lives are important to our vote. Our vote should honour their lives.

It’s your choice, fear or freedom.



EU debate lies and statistics

EuroblogPosted by RexN Tue, June 21, 2016 15:46:43

Following a variety of debate, this piece was originally inspired by the claim from Angela Eagle that the Leave campaign produce questionable statistics. Ironically, the ‘In’ side produced more.

Eagle can be a fantastic Commons performer, frequently running rings around Osborne at Prime Minister’s Questions (PMQs) when Cameron is absent. During the debate, she did not stand up to the scrutiny as when she has 6 pre-prepared questions to ask rather than an audience to answer.

Neither did Cameron’s own figures stand up to scrutiny during his Question Time performance. Being pedantic, I should point out that Cameron’s was a performance rather than a debate. The Prime Minister has shunned any opportunity to go head to head.

£350m per week

This is allegedly the figure that the UK hands over to Brussels. The source is the Office for National Statistics.

Yes, that is the figure notionally handed over. Not all of that leaves the country. Some of that £350m does not leave the UK, it is diverted into EU projects by British civil servants. Most Leave politicians are able to stress the difference between funds allocated to and funds transferred to Brussels.

Of course, there is the famed “rebate”. This takes the figure down to £276m per week that is allocated by the EU. This has to be offset by extra calls for cash, the UK having the most buoyant economy within the EU. This amounted to £1.7bn last year with estimates of £2-2.4bn this year.

Caution has to be used when making arguments. Instead of representing the EU parliament as spending less than a week’s gross contribution on shifting from Brussels to Strasburg and back for 4 days per month, the real cost is more than two weeks of net contribution – subject to later review.

EU is the biggest single market
This is a fun one which depends on how you define a single market and what measure is chosen.

When looking at value there are a number of possible sources. The IMF, amongst other things, rates countries by GDP. By this measure, USA is $1.275 trillion, or around 8% bigger than the EU. There is obviously a single market within a country’s own borders.

Taking the North American model, NAFTA includes both Canada and Mexico. Should NAFTA be expanded to become the North ALTLANTIC Free Trade Area, including the United Kingdom, the EU would be dwarfed.

The EU, however is marginally more populous than NAFTA. When it comes to population, both China and India have populations over 16% bigger than the EU. Both are linked to ASEAN, an Asian free trade area through ACFTA and AIFTA, making each of those bigger.

To qualify the statistic, Remain would have to redefine and say that Fortress Europe is the biggest protectionist customs union, by some criteria at least.

Independent Economic experts
A favourite claim of David Cameron is that all “independent” economic experts predict doom and gloom for Britain in the event of Brexit. The experts he refers to may not be quite as independent as he suggests.

Arguably, the key pieces of propaganda emanate from the Treasury. Notably, when becoming Chancellor, George Osborne set up the Office of Budget Responsibility to avoid temptations by the Treasury to “fiddle the figures”.

The Institute of Fiscal Studies (IFS) are presented as independent. The IFS is headed by Gus O’Donnell, former Treasury Permanent Secretary, later Cabinet Secretary, made a Lord by Cameron. He has also been executive director of the World Bank and IMF. Notably, he can expect to be referred to in the forthcoming Chilcot report.

There is a free flow of staff between the Treasury and IFS. Indeed, on taking up his seat in the Lords, O’Donnell spoke up about Treasury pay scales.

The IMF are headed by Christine Lagarde, supported by George Osborne to gain her position. Lagarde faces charges in France over her part in a €400m pay out to Bernard Tapie. These are some of those experts that Cameron refers to, those who repeat the Treasury dossiers.

Truly independent economists, such as Patrick Minford are ignored. It is clear that Cameron and his team have had time to prepare their case. As the campaign has moved on, other organisations, such as Deutsche Bank have come out to say that Britain would thrive following Brexit

We pool a small amount of sovereignty
How small is small?

The EU’s responsibilities are divided into competences. In some areas, such as fish stocks, trade deals and more, they have “exclusive” competence. Sticking with those 2 examples, Britain can not strike up trade deals independently.

Fishing becomes more interesting. Although Britain has 60% of the EU’s fishing waters, we have an 8.4% say in decisions made on fishing. One Dutch ship has 23% of the fish quotas for our waters. The French have quotas 5 times higher than ours for the Celtic Sea.

In return for pooling sovereignty, or put another way yielding 93.6% control, we do have an 8.4% say in the fishing industries of Luxembourg, Austria, Slovakia, and the Czech Republic, all of which are landlocked.

As Cameron rightly points out, we do have sovereignty in not having to increase VAT rates. However, should a British government wish to cut VAT rates below 15%, for example to stimulate output or reduce inflation, we can not do so.

Where Britain has exclusive competence is a challenge for others. What is obvious, however, is that ceding of sovereignty is smaller in some areas than others.

Rules from the EU 13-60%?
This is another of those fun topics, exactly how much of our own law comes from the EU?

The Remain camp insists that only 13% of our laws come from the EU, Leave say up to 80%. Where do you begin?

The 13% comes from the House of Commons Library, usually an authoritative source. In this instance, the analysis was shown as a percentage of Acts and Statutory Instruments.

The EU can also impose regulations that do not pass through Parliament. Business for Britain took a different approach, including EU regulations. This takes the figure up to 64.7% between 1993 and 2014, including a total of 49,699 EU regulations and 4,532 measures implementing EU directives.

Unfortunately, there is no standard to identify the relative influence of each, so depending on your perspective, you can argue whichever figure you choose.

% of trade
A common argument as to why Britain will suffer doom and gloom is that we do more trade with the EU than the EU does with us. The figure that Cameron and others would have us focus on is that 44% of our exports go to the EU, less than 10% of the EU’s trade is with us.

At first sight, this could be convincing. It is however quite natural that some countries will trade more closely with certain partners. Of the 29 nations, on the East, links still exist with Russia, including gas supplies.

A look at our roads and in our supermarkets tells a different story. We import high value cars, in fact 83% of new cars sold in the UK in 2015 were built in the EU, the vast majority in Western Europe from Germany to Spain.

We can also look at high volume products, such as wine, cheese, pasta and cured meats.

A different way to look at the figures is not by percentage but value. On balance, we currently import £8bn more from the EU per month than we export. The impact on French, German, Spanish manufacturing and farming would be considerable. Their governments have an interest in dealing with us. They have far more to lose.

More can be seen on euroblog.rexn.uk



A challenge to "call me Dave"

EuroblogPosted by RexN Mon, June 13, 2016 22:13:53

It is clear that Remain have been plotting their campaign for some time. Cameron asked us to join him in supporting a “reformed” EU. Brexit has taken a lead in the polls. Why?

Cameron has a reputation in some quarters as a political animal. Before becoming an MP, his background was very much in the Conservative party. He joined the research department aged 21 in 1988. Early on he worked on briefs for Europhile Ken Clarke.

Within a few years, he was working on PMQs for John Major, tipped as a potential Political Secretary to the Prime Minister, he lost out to Jonathan Hill, who he later effectively appointed as an EU Commissioner in 2014.

Before embarking on a career in the private sector, Cameron had two more significant positions. The first of those was under Norman Lamont, Chancellor during Black Wednesday. Next was a spell under, Michael Howard, the man he ultimately succeeded as leader of the party.

In the process, he beat Ken Clarke and eurosceptics David Davis and Liam Fox. There must have been enough known about him at that stage to convince the europhile wing of the party to vote for him.

On to his referendum project, arguably promising a referendum EU secured enough votes from UKIP to form a majority government. The aim of the vote was ostensibly to remain in or leave a “reformed” EU.

Much as Cameron may have been able to secure a vote within his own party, his political skills on the international stage left him with a statement of intent from a Council of Ministers that may never be ratified by treaty. Reform was not reform, instead potential tinkering.

In to the campaign, evidence suggests that it was long in the planning. Failures on immigration would have to be covered up. The focus would have to shift, a strength of Cameron’s.

There are some features of the Cameron campaign, abetted incidentally by his old Oxford chum, Osborne. The centre piece would be from the incestuous connections that Cameron had learned about during his Treasury days.

The Treasury would produce a report claiming doom and gloom. Project Fear was born, supervised by godfather to one of Cameron’s children, Osborne. The latter was to use his contacts and his position on various bodies to build the report into a body of evidence.

First stop, the bank of England Governor, next the IMF on which both Osborne and Carney sit. The IFS could be relied upon through treasury connections anyone else would be out of step.

For his part, Cameron had some strengths. The soon to be impotent USA President had lunch with the internationally respected Queen. Along with 3 other EU powers, Britain’s 4th and majority deciding seat on the G7 helped to ensure a G7 statement. Their body of evidence to sacrifice our sovereignty has been paid for by the British taxpayer.

The main arguments that he, and his sidekick Osborne have, is that “body of evidence”. That probably accounts for the large part of his tactics. Let’s have a look at what they are.

The most obvious Cameron tactic is to shift the question. He “doesn’t accept the premise” or this is a “red herring”. The real issue is the economy, therefore back to his pre-prepared declaration that he believes in the dodgy evidence put together by both George Osborne and a certain David Cameron. The plus side is “access to the Single Market”. Of course, negotiating that access leads to a “decade of uncertainty”.

Next come the half truths. Leaving the SEM would lead to tariffs on British products sold to Europe. The other half of that particular truth is that that we import from the EU. With a trade deficit worth around 10 times the national gross contribution to the EU and over 20 times the net contribution. That gives us a bargaining power that Cameron failed to capitalise on in his attempt at what he calls “reform”.

Cameron is easy to believe when he says “we won’t get a better deal outside than inside”. Of course we won’t if we have a national leader who can not negotiate from a position of strength.

Another of his half truths was on VAT. The side he presented was that we did not have to raise VAT rates above the current levels. The other half is that the UK can not reduce VAT rates below 15%.

The next technique is designed to tap in to the listener’s ‘security’ needs. Cameron tells us that he has been Prime Minister for 6 years, that he knows what he is talking about. To some, the reassurance works, to others he patronises.

He usually tries to fit in the “I love my country” line too. This is customarily followed up with reasons why the only thing to do, if you love your country, is to do as he says. He tells us that we can not have access to the EU markets because Germany won’t let us. He may love his country but apparently not enough to stand up for it.

One of Cameron’s most used ploys is the line “we don’t know what out looks like”. Of course we don’t. After a Leave result, the government of the day has 2 years to negotiate. Cameron has not told us what his policy would be for the last couple of years before the next election.

Arguably the most ironic part of Cameron’s strategy is to fight a rearguard, telling us that Leave are “scaremongering”. This is from a Prime Minister who has demolished the British economy with his prophecies of doom. It is symbolic of his willingness to insult, a tribute perhaps to one of his mentors, John Major.

Increasingly, Cameron uses pejorative digs, as he did over Syria and calling those who disagreed as terrorist sympathisers. On the Commons he made digs at Boris over divorce. Those who want to leave are “quitters”, the hackeneyed phrase from Major’s days of “little Englanders, another irony given the global outlook of the Leave camp.

Another thing, Dave, if a joke isn’t funny, don’t repeat it. A DIY recession may have had potential at B&Q but if it fails then, it will fail every time.

To conclude, there are some questions that Dave might like to answer.

How will you meet your immigration targets if we remain?

You tell us that we have sovereignty and use VAT as an example, that we have not had to raise VAT. Can we reduce VAT below 15%? Can you guarantee removal of the ‘Tampon tax’?

You tell us that we don’t know what ‘out’ looks like. That is not the point of a referendum, the Leave leaders are not the government. Can you tell us what the future holds and what ‘remain’ looks like as the EU seeks to expand its reach?

You have told us what ‘out’ looks like under you; recession, inflation, unemployment, no exports, falls in tax receipts, inability to strike a trade deal, plague of locusts, war in Europe, pensioner poverty and much more besides.

If, as you say, you love your country and are incapable of delivering anything good for Britain, will you stand aside now and let somebody capable, with a vision for an independent Britain take over on 24th June?



Euro20/20vision – your decision

EuroblogPosted by RexN Thu, June 09, 2016 11:54:09

As the referendum draws near and debate increases, the natures of the campaigns have become apparent. Some minds were made up before in either side of the fence. Some are confused, some are neutral.

Any academic piece will give the opportunity for the reader to decide any potential for bias. This can come from declaration of interests to any sources of funding to assumptions chosen to be made or not to be made. Some elements of potential bias may require further research. In any piece, the reader may have a different perspective.

Readers of this site will note the lack of the word ‘I’ in any article so far. On this occasion, a brief history may allow the reader to identify bias.

My research into the EU started as a teacher of Economics around the time of the Maastricht Treaty. A personal view was that in order to make my subject relevant to students, the real world should be incorporated as much as possible, hence visits to the Stock Exchange, Bank of England, House of Commons, factories and power stations were a regular feature.

Research was channelled on behalf of the students. Where the Chancellor at the time confessed to not having read the Maastricht Treaty, my students had photocopied paragraphs and protocols from both Maastricht and the Treaty of Rome. I like to think that Common Agriculture Policy brought to life Mordechai Ezekiel’s Cobweb Theorem, just as one example.

My own research led me to appreciate the significant change in reach from what is now called the EU. My own feeling was that this was a matter for the British people to decide, that we should all have a right to understand. I campaigned for a referendum.

As a teacher, arguments were presented from both sides. My teaching philosophy was to help students understand and use the tools to formulate their own opinions and present their own arguments. Most important was encouraging the ability to question.

As for the outcome of any referendum, my view was neutral, that we needed a broader education of the public to understand and vote for the future direction of their government. Very few arguments, particularly in democracy, let alone economics, are clear cut. We should make our minds up after listening to the arguments.

Here we are in 2016, the referendum is imminent. The debate has begun.

Most of us probably use the same sources for information. TV provides us with headlines, sound bites and now debate. Twitter allows MPs to give 140 character (plus attachments) arguments. Newspapers are accessible on line as are blogs and other opinionated web sites.

At this point, my own recommendation is to trawl Parliament TV. A fantastic source is Select Committee meetings. Politicians of varying opinions from each party can grill an expert or government minister (some ministers can also be expert) intensively, sometimes helpfully, sometimes rudely. For the diehard, much of the material that experts bring can be a catalyst for more research.

Back to the debate, the electoral commission has decided in its wisdom that the campaigns be fronted by 2 Conservatives, both Old Etonians, both Oxford scholars. If this article does anything for you, I hope it will be to question the sources of information presented and listen to the supporting casts.

Cameron had a head start. He has framed much of the way the debate is run. He told us we would have the opportunity to vote to Remain in or Leave a “reformed” EU. Those reforms amounted to some tinkering with welfare for migrants, yet to be ratified by the rest of Europe.

Project Fear emerged. Everything that could go wrong would go wrong. The Leave campaign can not tell us what “out” looks like. The economic experts all tell us we will suffer. Issues like migration are sidestepped. Those who are sceptic are “little Englanders”. Let’s look at those in reverse order.

To those of us who have a global outlook, the “little Englanders” is something of an insult. Branches of my family have moved to Spain, Hong Kong and the USA. My favourite birthday treat reflects Irish Industrial Revolution migration combined with Jewish capitalists, fish and chips. Friends come from all parts of the voluntary Commonwealth as well as the EU. Don’t patronise us, Dave.

The economic experts have been covered to an extent here. In short, the central reports are from the Treasury. These have been dissected by or presented too late for consideration by the Treasury Select Committee. The incestuous nature of the relevant expert bodies is apparent if people are prepared to look. One piece of work is cited by another, then another. A body of “evidence” emerges. The evidence is unreliable.

Forgive me but I thought this was a referendum about whether we should remain in the EU or leave. I thought that if we had a democratically elected government, they would shape what ‘out’ looks like.

There are some questions back, Dave. What does “in” look like? What is the direction of EU reform? Will the 2020 election produce a free market government, a protectionist government or anywhere in between? Without knowing which governments we have, we face a lifetime of uncertainty. Don’t divert the question and reply with your tired script, provide answers please, even if the answer is “don’t know”.

Dave may claim that he wants a “strong Britain in Europe” so we can expect a change of leadership after the referendum, given his capitulation over “reform”.

There is work to be done to give a positive message if Remain is to ensure a majority. Have Leave done enough?

The campaign leadership was decided by the Electoral Commission. The leader had ostensibly not decided on his position until the last minute. Johnson is not necessarily the next Prime Minister in the event of Brexit.

There are a variety of views about what “out” looks like. What we know is that it depends on the government of the day. We also know that it depends on how resolute that government is in its negotiations.

We may be able to strike our own trade deals, they may or may not maintain free movement, therefore unrestricted immigration from the EU. We do know that we have a choice from what is currently a small list of political parties in future elections. We will be able to tell the government what we want through the ballot box.

There are a number of questions without answers. Leave are not in a position to answer with authority. We therefore face a simple choice between Project Fear and Project Freedom.

This is not the forum to list every single argument. That has been done elsewhere, some hyperlinks being within this text, some of those leading to more hyperlinks. There are however some basic principles.

For Remain, we have a devil we know. We know that devil intends to extend its doctrine. We can judge whether Britain has the capacity to be a force against that devil given the competences that the EU controls and our relative democratic strength within the EU.

We can identify those elements of the debate important to us. Depending on where our employer trades, we can legitimately have a range of opinion. That is what a democratic referendum is for.

For ‘out’, we have the devil we don’t know. Overcoming this devil depends on faith, our own faith that returns sovereignty and faith that we have the ability to thrive with a global perspective.

It is a sad reflection that the dominating view at the moment might be based on trust. Remain have woven a tissue of questionable evidence. This is reinforced by MPs on Twitter, openly making representations that when researched prove to be false at worst and half truths at best.

Yes, claims from Leave can be questioned. We can make our own judgements on what sort of deal a trade deficit of £80billion or so give us. We can wade through the arguments about £350 million per week or a lower figure.

What has helped to make up my mind is not the bluster of a Boris or the chicanery of Cameron and Osborne but some of those obscure figures giving evidence to select committees. We have the radical thought, agree with him or not, of Patrick Minford. We have the quietly spoken, intensely thoughtful and magnanimous Martin Taylor and Richard Sharp. We have the people to deal with anything in so many walks of life.

British democracy is a gem. Select Committees give us transparency that the EU does not. Britain has given democracy to much of the world. We may be stifled by the EU but have much still to share with the world and the rest of the world with us.

To conclude with the question of bias, I confess to a bias forming. This can perhaps be summarised by, of all things, a variety of British winning Eurovision song titles. Do we wish to remain as a "Puppet on a String"? Is the "Boom Bang-a-Bang" a barrage of incoming artillery or a firework celebration? It is time for “Making Your Mind Up”.

Personally, I always had a thing for Lulu.





Sovereignty and democracy made (slightly) less complex

EuroblogPosted by RexN Tue, June 07, 2016 15:58:28

In our quest to follow and explore the arguments over the EU referendum, our attention turns to sovereignty and democracy. Can we unravel what they mean and more importantly, what they mean to us?

These could be treated as different topics but it will hopefully become apparent in this piece why both should be considered together.

The Oxford English Dictionary defines sovereignty as “supreme power or authority”. In simple terms, in any given community, who decides? National sovereignty is therefore “the authority of a state to govern itself or another state”.

Britain is a parliamentary democracy, therefore, Parliament decides on policy and law. We also have a constitutional monarchy, the monarch being a non-political figure, personifying the state as nominal head of the constitution. This brings other bodies with an influence over how a country operates under one umbrella.

At local level, Britain has councils, organised on a geographical basis, typically by town, city or county. These have power to apply local taxes and deliver local services. The decision makers represent voters who elect them in or out over a fixed term.

At national level, Parliament decides, again representatives being elected and capable of being dismissed after a maximum period of 5 years, which brings us to democracy, which is defined as “a system of government by the whole population or all the eligible members of a state, typically through elected representatives”.

There is another part of the constitution or the state, which is the legal system which provides an element of certainty in how government decisions are enacted. In the event of any disputes under democratic law, a court will decide how the law should be interpreted.

There are a variety of courts in the legal system, relating to different areas of law; such as criminal and civil which is further subdivided into, for example, family and employment. After legal decisions have been made, in each area of law, an appeal can be made, the ultimate British body since 2009 being the Supreme Court. Prior to 2009, ultimate responsibility for interpretation was the House of Lords.

Having identified the systems pertinent to Britain, we can explore how the principles of sovereignty and democracy have changed.

Any community can share sovereignty or how to allocate the ability to make a decision. Residents of a county are also residents of Britain. Although legal systems exist in the United Kingdom, there is one parliament and one Supreme Court.

As members of NATO, we agree to act in each others interests militarily, as defined by treaty. As such we share or pool sovereignty in some areas with NATO members. The same applies as members of the United Nations in agreeing to international law.

In principle, sharing sovereignty with the European Union is the same. The big difference comes in the scope of decisions to be made. To understand how, a brief look at history helps.

In 1972, Britain joined the European Economic Community, a customs union which had abolished tariffs between member states. By 1979, the first directly elected European parliament was formed, more of which later.

The Single European Act came about in 1986, setting out a framework for completion of the Single Market 5 years later. This had the effect of weakening the parallel European Free Trade Area (EFTA) encouraging wider membership.

At the same time, European Political Cooperation (EPC) was codified extending the reach to other policy areas and Qualified Majority Voting (QMV) to more areas, ostensibly to speed up the introduction of legislation. A lurch to common foreign policy accompanied.

More treaties brought more shared sovereignty. Maastricht (1992) introduced the path towards monetary union, along with European citizenship, foreign and security policies too. Amsterdam (1997) and Nice (2002) went further.

The Lisbon Treaty (2009) was the latest stage. At first this included an attempt to bring an EU constitution until referenda blocked that objective. However, it brought the European Union structure to what it is today.

Amongst the Lisbon Treaty measures, QMV was extended to at least 45 different policy areas for the Council of Ministers. The Charter of Fundamental rights became legally binding. Sovereignty became shared in more areas.

So how does this look in practice?

Laws are effectively put forward by the European Commission which equates to the civil service in Britain. The difference is that in Britain, the elected politicians frame legislation, with the support of the civil service. Commissioners are appointed from across the EU. Jobs are rotated around the countries.

The Council is a collection of government ministers from each state, the prime ministers or departmental ministers. Their decisions are made largely by QMV. Decisions have to be agreed by at least 15 out of 28 members representing at least 65% of member populations. Here, Britain has 12.7% of voting power, the Eurozone has 67%.

The role of the European Parliament is to vote on new laws proposed, effectively having the right of veto. They also have powers over the EU budget.

The EU also has its own court which can override national law for members. Its judgements are passed down into national law. This makes Britain's the Not So Supreme Court.

The EU’s responsibilities are defined by ‘competences’, some are exclusive to the EU, such as fisheries policy, aspects of the customs union, monetary policy for the Euro zone and international agreements.

Others are shared with member states, including notably justice, consumer protection, agriculture, employment, foreign security and defence policies. Supporting (and coordinating) competences include health, culture and education.

Between them, the Commission, European Court and Council pass down around 2,500 directives and decisions annually.

The same sort of principle applies when looking at different aspects of the EU. Britain is a country whose economy has a high degree of service base, low degree of agriculture in comparison and a significant element of oil and gas. On each of those criteria, Britain will not be in a significant majority for the foreseeable future so can be outvoted.

Looking at how democratic the European Parliament is, there is s higher weighting for smaller countries. That translates into Britain having 12.3% of the EU population and 9.8% of the vote in the European Parliament, not so bad perhaps.

From a different perspective, Britain has 1 seat for every 840,000 of her population. For each MEP from Luxembourg or Malta, they represent less that 1/10th of that figure at around 75-80,000.

The figure looks worse when taking yet another view that of the net budget contribution. Remembering that figure of our population being 12.3% of the population, our gross contribution is around 10.6% of the total EU budget. Expenditure in the UK is around 5.4% of the budget, making us net contributors.

Of the net financial contribution, Britain accounts for around 14% in return for that 9.8% vote. The level of EU taxation does not correspond with our level of representation, nor does it represent the level of our population. We are in no position to insist on change.

Adding another dimension, there are a number of majorities in the European parliament, most notably the Eurozone but also in countries with who we operate a trade deficit, countries without oil, countries without the same level of services and countries with less access to the sea. Most European trade is done over land with implications to our fisheries and to haulage regulations which also covering shipping.

A significant proportion of British laws are made in the EU where we have less than 10% of the power.

The democratic deficit is very real. Our choice is whether we continue to share, or decide to regain sovereignty. This referendum campaign gives the opportunity to assess whether the sacrifice of self-determination is worth whatever benefit we derive.











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