Saturday, 30 April 2016

Children at play


If you watch politics at all you can't have missed the unedifying sight of John Mann badgering Ken Livingstone. As it happens I don't give a tinkers damn what Livingstone said. I don't understand why it's news that something coming out of his mouth was cretinous. That happens every time he speaks. Twas ever thus. But the sight of John Mann in a fit of self-righteousness - virtue signalling for the cameras is really a landmark low for Westminster politics.

God forbid we might actually have a serious conversation about real issues rather than whatever is manufactured from a daytime television show. It's pathetic. The entirety of Westminster politics has entered the death spiral of identity politics.

That's because Westminster politics is now displacement activity. They really don't have anything better to do. And that, people, is why we must leave the EU and repatriate policy making. Brexit is as much about shaking up the claustrophobic Westminster bubble and shaking it out of its complacency. We can no longer afford to let politics slide like this.

We need Westminster focussed on the serious business of government rather than preening and styling themselves as saints who pay their taxes on time. If this is what we are prepared to accept for standard fare in Westminster, we might as well go the whole hog - join the Euro and abolish parliament completely. If our system of government is not going to govern then it is an expensive luxury we do not need.

But while that may sound appealing to many, we will live to regret our negligence. If we abdicate government entirely to the EU then we will be passengers with no say at all in how we are governed. The consequences for that are grave. It's time to act. It's time to kick this lot out and it starts with Brexit. This is our chance to remind them that they are supposed work for us.

Friday, 29 April 2016

The City should keep its nose out


More than 100 leading City grandees have backed the Vote Leave campaign arguing that Brussels meddling represents “a genuine threat” to Britain’s financial services industry. Senior figures from the worlds of banking, stockbroking, insurance and fund management said in a letter to the Standard that the Square Mile “can thrive and grow outside the European Union”.

And you know something? I couldn't care less. I couldn't care less for the same reason I don't care about the city grandees who have come out against Brexit. It is not their decision. It is not an economic issue.

As much as anything the rules that the City abide by are in the main global agreements and your average trader or financial CEO has no more clue than the next schmuck - as Arron Banks and Richard Tice demonstrated in front of a select committee the other day.

The only economic consideration in the whole Brexit debate is the question of how we disentangle ourselves from the EU without doing economic harm. The answer to that is slowly and carefully. If we choose to leave the EU, the job of politics is to work out how to do it. In that regard, there are, as highlighted, paths available to us, trade-offs to make and compromises to endure.

This is purely a question of whether the public wants Britain to be a subordinate of a supreme government for Europe. It's a question of whether we want to be a self-governing nation or whether we want to be gradually erased on the world stage. This entirely comes down to your own estimation as to whether you prefer self-rule and democracy - and whether you think Britain has what it takes to make it.

My own view is that democracy is not for sale at any price and that Britain's prosperity is not contingent on being an EU supplicant. Nor do I believe that Brexit significantly impacts European cooperation. What the multinational corporates think is neither here not there. We are an island of sixty five million people and the majority of us are employed by small to medium sized enterprises.

Though many of them are suppliers and service providers to large corporates, those same corporates would find life a lot harder outside of the UK. Britain is an advanced, first world economy and one that believes first and foremost in property rights and the rule of law. That is why we are top of the league in soft power and it that which makes us the best place in the world to do business. A deal struck in the UK means something.

What should concern us here is that we have handed over far too much responsibility for policy making to Brussels and will continue to do so despite the fraudulent reassurances of David Cameron. Increasingly we are passive recipients of laws we had no real say in - and with no real democratic scrutiny.

Leaving the EU is not an economic estimation. It's not about bean counting or saving a few quid. Our choice at the ballot box is about our democracy. What is convenient, or preferred by corporates, banks, bosses and politicians is the least of our concerns. They are all in their own way prostitutes who will suck up to power. In that regard, Brexit is a timely reminder that it is we who hold the true power.

Brexit: missing the point on regulation


Daniel Hannan whingeing about car seat rules for children is exactly why Leave deserves to lose. James McGrory, Chief Campaign Spokesman of Britain Stronger in Europe has aid “Daniel Hannah’s attitude is typical of the dangerous anti-regulation zealotry which typifies the Leave campaigns.” And indeed it is.

It isn't faceless bureaucrats in Brussels who sit dreaming up safety regulations. In this instance it would be the United Nations Economic Commission for Europe in conjunction with Global NCAP - now the benchmark for world safety standards in the automotive sector. Standards for child seats are based on crash test results. They make sense - and it makes sense to do it at the regional and global level.

In this I have genuinely no idea why you would object to improving the chances of your child surviving a collision. I am sure there is a generic libertarian argument, and I'm sure that we could invoke a rabble rousing reference to Edmund Burke on why it is every parents right to see their mangled offspring bleeding to death in their shitty BMWs, but seriously there are times when libertarians just need to keep schtum if only to enhance the credibility of their arguments. "Demand the right to kill your children!" is not a winning Brexit argument.

We had these same silly debates about passenger side wing mirrors and later seatbelts. Now I know nobody who doesn't think seatbelts are a good idea. More to the point, In most instances, we would adopt such global standards in or out of the EU. Especially those pertaining to the manufacture of vehicles because we can't export if we don't.

The point about regulation as far as the Brexit debate is concerned is that we want an enhanced say in how they are made and which ones we adopt. I cannot imagine any circumstance where parliament could or should reject child seat safety measures, but the issue is that sometimes the rules are either too weak or ineffectual or less safe than our own. Life-saving equipment for children is probably the last thing I would pick to demonstrate this point.

But this really does matter. The Brexit debate is trapped in a monomania about tariffs but as I keep saying, the essence of modern trade deals is the removal of technical barriers to trade. One of the key tools in opening up markets is the Mutual Recognition Agreement. There are times when we cannot expect other countries to comply with the global or regional standards because their own are different and are too deeply embedded in their own industries. And so we do quality inspections to see if they are equivalent.

If it is established that two regimes are similar than we can establish an agreement that to meet one standards is as good as meeting the other. In this, because it is a trade concern, the EU has exclusive right to make that call. That is how we ended up opening up our markets to dangerous Chinese fireworks. Great for teenage pyromaniacs, not so great for parents.

As it happens, UNECE standards that the EU adopts are based on a wide consultative consensus on vehicle safety issues between governments, industry and consumers, calling in expertise from all the major Western academic institutions. I have every confidence in them and it makes no sense to duplicate the effort. However, China Automotive Technology and Research Center (CATARC) which runs C-NCAP, on the other hand, is a government-affiliated institute and operates largely in secret - and obviously in a foreign language which takes it out of the Western sphere of transparency.

Chinese Automotive blogger ChinaAutoWeb has some serious concerns about C-NCAP asking if the system is a scam purely to gain access to European markets. "The program lacks neutrality and fairness due to its for-profit activities. For those automakers who choose to pay for the crash tests of their own models, the program routinely selects as test cars models of top trim levels, which come with more safety features, even if those models are rare on the market."

"Compared with NCAP tests in other parts of the world, the tests C-NCAP carries out are often insufficient, less strict, and based on compromised requirements. C-NCAP administers three tests: frontal of 100% and 40% overlap and side impact, omitting pedestrian protection, rear impact, and side impact pole tests. And it usually crashes cars at a lower speed than other NCAPs, opting for 50km/h in the frontal test–compared with 64km/h in Europe, Australia and Latin America, and 56km/h in the US. What’s more, a model can get credits for many extra-test factors, such as how many airbags it has, whether the seatbelt reminders are installed, and the way it gives out these extra credits often seems inconsistent and arbitrary." Alarming stuff.

And that is why Britain is better off out of the EU. Not for a minute do I believe that entrusting the EU with such critical decisions is a good idea. The EU is under serious pressure to demonstrate that it can open up new trade deals for us and that it can break out of stagnation. As we have seen, there is nothing it won't do to secure an agreement. It will sell out Syrian refugees. It will turn a blind eye to massive human rights abuses, and it won't let a thing like a corrupt safety regime stand in the way either. Without a veto or an opt out at the global level there is every reason to believe we could see Chinese death-sheds on our roads.

There will always be a need for regulation and regulated markets and there are always going to be compliance costs and they will always be a cause for grumbling from business and industry. We cannot expect that they will not cause us personal inconvenience either - but everything has been improved by safety regulation. Electrocutions from faulty electronics are almost a thing of the past, housefires are almost unheard of these days and road fatalities are collapsing.

What matters is that we have a full role in scrutinising regulations and have a say in when we adopt them and a strong hand in the inspection and enforcement of them. Not only does Brussels tell us what the rules are, it also tells us when we must implement them (regardless of how many jobs they kill) and what the penalties are for breaches. In a very real sense we have lost control over what we allow into the country and how we legislate around it. That is the central issue, not silly bent banana histrionics from the likes of Daniel Hannan.

In or out of the EU we will adopt global standards and regulations from the top tables. The point of Brexit is that we want a seat at those top tables and a right of opt out. By leaving the EU we get an independent vote, right of reservation and a direct line to the top table rather than going through the EU middleman. Brexit is not about deregulation. It's about having a say in the rules and being able to improve them by increasing our particpation. 

It's about creating frameworks we can all agree on which extend beyond the confines of little Europe, thus creating a global single market. The dismal notion that we must take a stand against child safety equipment is precisely why eurosceptics are perceived as little Englanders who want to turn the clock back. The intellectual inconsistency from Hannan is precisely why nobody believes us when we say we want to go global. 

Wednesday, 27 April 2016

Brexit is key to a world without barriers


We Brexiteers are chastised for our fanciful utopian vision of a post-EU Brexit. But why is that bad for us but perfectly acceptable for europhiles to have their own grand delusions, despite their many attempts at a European utopia falling apart and inflicting misery on the people of Southern Europe? Why is one ideology dangerous and haram and the other is not?

In truth, I think it's their utopian vision that will win out for the time being. We have the wrong kind of leavers on the tracks. The Brexit movement puts progressives in the clear minority. We have had Brexiteers demanding protections for UK steel, intensified border checks, wholesale scrapping of unspecified regulation and taking a wrecking ball to most of our EU cooperation. As much as I don't want the EU I don't really want that either. I do not want the UK to be redesigned to the template of Nigel Farage or Boris Johnson.

What I do want to see is Britain with a new relationship with Europe, cooperating as before, enjoying the same freedoms but with greater autonomy to act on the world stage and with more say in the rules that it adopts. The truth is that global trade needs global regulation and that is the direction of travel, but if we want such a system to work then it is the people of the UK who must have the ultimate veto and not the European Commission.

And while Europhiles persistently tell us "we know it's not perfect" and that we should stay in and help reform it, the fact of the matter is that the EU is inherently resistant to reform as recently demonstrated by David Cameron. We're certainly not going to get the flexibility or agility we want and a new relationship without leaving the EU looks improbable. The only way to get that new relationship is to leave.

In my ideal scenario we would leave the EU but for the time being stay in the EEA while we gradually evolve out of the EU gravitational field, deciding as we go which areas of cooperation are in our interests and which interests are best repatriated.

It is my view that because we have been integrated with the EU for so long, many of our administrative capabilities have atrophied which means we will have to redevelop domestic expertise over time, but in the process, being free of various EU directives, passing on responsibility for fishing and agriculture down to the regions. I want to see them free to formulate policy according to their distinct needs and innovating without the restraints of distant policy diktats.

For instance we have the Waste Framework Directive which places limitations on our use of landfill. This has never been a wholly intelligent policy and was instituted on the back of a kneejerk fad. In truth the UK landscape is scarred by quarries and mines which collect toxic water and lie derelict for decades. There is no reason why they could not be lined and converted for anaerobic gas collection and then later reclaimed as country parks when the potential is exhausted. You can pick over the details and tell me it wouldn't work if you like but that's just a forinstance.

I would like to see more sustainable management of fisheries and I would like to see local boats fishing sustainably in our own waters - and I would like to see Pennine hill farmers developing policy separate to that of Somerset arable farmers according to their own distinct landscapes and business needs.

Underpinning all this is our commitment to global conventions in habitats and agriculture which are important, but do not really need interpretation by Brussels technocrats to produce a single framework for Europe. Agricultural husbandry driven by ideological motives can and does produce disastrous effects.

And then looking at our overseas policy, I would very much like to see us doing more to help develop lesser developed countries with a view to exploiting the trade potential. Much of what the EU does is outsourced to external agencies. I think we should be using our aid policy in cohesion with our trade objectives. To an extent we already do but we are more dancing to the EU's tune than our own.

Rather than taking futile domestic measures that reduce our liberty in order to control immigration I want us to be looking at real solutions that address the push factors. In this I am of the view that the EU is an aggravator of push factors, not least in its boneheaded African trade policy and pseudo military interventions.

The net effect of all of this is a revitalisation of UK governance and restoring politics of consequence and significance rather than the empty rituals we see in the Westminster bubble. It would mean radical restructuring of Whitehall. It would mean breaking up councils and giving them more autonomy and making the people more responsible for the policies they implement. Real hands on democracy rather than the diktats of technocrats.

One thing often depresses me is a quick look at the Baltimore Sun where I occasionally see technical essays on cleaning up the Chesapeake Bay, written by genuine local experts. How is the supposedly stupid USA has a far superior press? It's simple. The media is mainly a reflection on government. Since we have outsourced the policy making of substance we cannot expect journalism of substance. Our entire political and media class is beset by displacement activity.

What I would like to see is far greater global engagement, seeking to build common regulatory platforms, not for the creation of a supreme government for Europe to to facilitate global single market for the advantage of all rather than the a regulatory regime dominated by a hegemon like the EU.

Just about every one of these ambitions is ultimately thwarted by the dead hand of supranationalism. We are told what the rules are. We are frequently overruled. We are frequently told to swallow bad regulation because it's all that can be agreed. We are routinely subject to targets that distort good policy-making. We are subject to arbitrary whims of EU funded NGOs that lead to destructive one size fits all policies. And as much as that takes its toll on the economy, pushing up energy prices it also has its own insidious way of destroying competitiveness, creativity and jobs.

The EU and its advocates believe the EU to be the embodiment of liberal and progressive values yet in practice we see a Europe less unified, more fragmented, more augmentative and it is even creating divisions inside the UK. This is not what we sighed up for.

And looking to the future, the EU as much as admits it is near impossible to force through an agenda for a single market in services. That is why such barely exists in the EU internal market. If it is not achievable inside the EU then there is no chance of securing large multilateral agreements beyond the EU. IF there is to be a global single market in services is will have to grow incrementally, with independent actors forging their own agreements according to common regulatory frameworks which evolve over time.

The EU is fixated with getting everything done in one go, sometimes forcing the issue at great cost when trends suggest that people of their own accord are building commonality for data and banking systems without the intervention of government. In this all the EU does is create barriers to the outside world. In more ways than one, the closed off isolationist view that Ukippers have of the UK is exactly the same as that of the EU only on a much grander scale.

Underpinning the EU's dogmatic and inflexible approach is its prime directive of building a European superstate. They pretend that is not the agenda and say that it cannot happen, pointing out the many obstacles to that but this does not stop the EU trying. And it is not until we break this redundant idea that will never work can we evolve out of our ideological stagnation.

The fact is that a common market of rules and transboundary cooperation is entirely possible without their being a central authority and if it built on an opt in basis then it is something that evolves at the pace economies can handle and with a democratic mandate. That is something the EU will never obtain because it will always put its own priorities above the needs of people.

One of the greatest misconceptions of our age is that the EU represents multilateralism and cooperation. Were that true I would not be campaigning to leave the EU. I believe in the four freedoms of the common market but I do not see the rationale in ending them at Europe's borders. And if there is one thing this referendum has demonstrated, with the repeat insistence that a deals with the EU take years, taking them at their word, I can see that my ambitions for a truly free world trade system are never going to come to fruition so long as the EU exists.

We are told that leaving the EU may trigger a broader break up of the EU. I don't think that would necessarily be the case at first, but would could very well see allies following us into Efta. Perhaps then there would be a logic in replicating Efta for Southern Europe and perhaps even splitting the Euro currency? It would see a Europe of regional blocs each capable of responding to their own needs rather than being caught in a state of perpetual deadlock - where concerns are never addressed until crisis becomes an emergency.

It is my view that if the EU was genuinely committed to democracy and multilateralism then it would be looking at strategies to maintain the single market while abolishing itself. But it will not do that because it is a government and with all governments, power, without adequate checks and balances will always flow away from the people.

Effectively the people of Europe are being held hostage to the ideas of the last century on an idea that was flawed to begin with. The peace of Europe is not held together by governmental decree. Peace is secured by cooperation and democracy and trade. A Europe without democracy will only lead to a break up in less favourable conditions.

If we want to reform Europe and make it relevant to the internet world then we should be looking to move beyond the EU and the ideas of old men. The post-war settlement never anticipated the internet and smartphones and vast container ships the size of small towns. The ideas of 1916 do not speak to the reality of 2016.

What Europe needs now more than ever is reinvention, renewal and reform. That means letting go of bad ideas no matter how strongly we are attached to them. As much as Brexit marks a turning point for Britain and a revival of good governance, localism and democracy, it also marks a catalyst for wider reform of Europe. We are often told Britain should be leading Europe. Well this is our chance. This is our chance to part company with the luddism of the EU and start thinking about how we create a world with fewer barriers. While we remain locked in Fortress Europe, that can never happen.

Arron Banks: flailing and failing


Time and again Arron Banks was warned to watch his own message for consistency. Now it bites him back. The very last place we wanted to be is having protracted debates over unknowable economic metrics trying to divine the true cost of Brexit. Thanks to Banks (and others) this has now become primarily an economic question and we cannot win it on the basis of the figures presented by the Leave campaign.

The point of Brexit is that the EU is not a free trade area. It is a government - and one which we do not want to be ruled by. Any case that places immediate separation as the priority on economic grounds is going to lose. You would have to have some pretty convincing evidence to show that more barriers and the possibility of tariffs makes trade healthier for the UK.

As it happens, I probably could make that case but not by casually throwing Mexico and Canada into the ring as examples - and clearly by way of referring to a junior aid sat behind him for factoids on free trade deals, this is a man who in a very real sense does not know what he is talking about.

What we got from Tice and Banks was a series of suppositions and assumptions which looked unprofessional and flimsy. The panel weren't buying it and I wasn't either. In this regard Rachel Reeves and Helena Goodman will have come away feeling reassured that staying in the right choice. Neither Dominic Cummings or these two bozos have any definitive answers and nothing that sounds particularly credible. If I didn't know what I know I would be voting to remain on the basis of what is presented by these two.

That said if the panel were anywhere near as sharp and informed as they should be on a matter this critical they would have mercilessly driven a horse and cart through their entire case. I would have. Again we see the usual monomaniac fixation with tariffs while completely ignoring the many areas of legal, scientific and technical cooperation, customs channels and processes. All in their own way massively more significant than tariffs. So we really are looking at the blind leading the blind. Between them they have no expertise and wouldn't know where to look for it.

Had Rachel Reeves pressed Banks on non-tariff barriers and areas of EU cooperation his entire case would have folded. So the question is, why does she know so little? She is, after all, paid quite well to know such things and has research staff to do that very thing for her.

Though I would like to see Britain leave the EU the job of MPs is to give expert witnesses a thorough cross examination, and yet what we see is amazing naivety from both camps on what the EU is and how it works. If this is the standard of select committee hearings on matters of critical importance it is little wonder we get such poor decision making from Westminster.

But ultimately the fault lies with Banks. It is simply not good enough to ask for a complete dismantling of the post-war settlement without being able to offer a coherent idea of what the benefits are, and at the very least you should be able to articulate how it can realistically be done without hurting the economy. Instead of that we got delusional waffle. What we've had from the Leave campaign is utterly shambolic.

The fact is that we have been saying for decades that the EU is not a free trade zone and is something of far greater depth and significance, yet now we are only weeks away from the vote, we are, for reasons that escape me, pretending that a quick and dirty trade deal somehow unpicks forty years of integration. Madness.

I suppose it was a fair gamble that MPs would be ignorant enough to let it slide, but the point is that there will be bloggers, columnists and opinions formers watching this with interest to see if Leave does have a credible case. On the basis of what we have seen thus far, you could be forgiven for thinking there isn't one. What we can say for certain is that if we want an adult exploration of the issues, Westminster is the last place you would look for it.

They do not know what Brexit looks like - but they should

Just from the illustration you can see what the FT thinks of Britain and how it views the EU.

Martin Wolf and the Financial Times do not know very much. He said as much. He says "the uncertainties would be pervasive: we do not know what the UK government negotiating an exit would want; we do not know what the rest of the EU would offer; we do not know how long negotiations would last; and we do not know what the outcome would be." And while we do not know for a fact what would happen, we can make some reasonable estimations - which is what financial sages are supposed to do. For instance we do we do not know exactly what the UK government negotiating an exit would want. But we can safely assume that it does not want a disorderly and messy withdrawal.

Wolf says that "There are three plausible alternatives". This is where we are in straw man territory. He cites the WTO option which does not in any way address the multiple cooperation agreements or issues surrounding non-tariff barriers and in fact would likely cause asymmetric tariffs in the EU's favour. If Wolf was a halfway credible analyst he would know that much. It's a non-starter and would in fact case the very chaos that remainers have been talking up. So we are back to the age old question. Ignorance, dishonesty or both?

This means of exit is commonly associated with unilateral withdrawal, which no government intends to do nor would even consider it when faced with the practical ramifications. And so we can say with absolute certainty that we are looking at a negotiated exit.

With regard to the Swiss Option, comprising of membership of a trade arrangement in goods, with bilateral deals in other areas, Wolf is right to say it is "complex" and given that we have only two years under Article 50 to negotiate a settlement, we can safely assume that a bespoke deal is not on the cards. Talks may be extended but the tolerance for uncertainty will be short. Any UK government entering negotiations would rapidly be disabused of any fanciful notions of recreating the relationship from the ground up.

So actually, an off the shelf agreement based on the EEA is looking the most probable exit means and since it is the least disruptive for both parties and the most achievable, that is most likely what will be asked for and the only thing on offer. Having done a scoping exercise in advance of submitting our Article 50 notification, we can say with some confidence that a transitional deal could be arranged inside the mandated two years. To ensure it does not drag on, we will in all likelihood adopt most of the existing cooperation agreements as they are without opening them up fro scrutiny. We will swallow the lot. Wolf has it that the UK would have to retain free movement of people membership of the European Economic Area, which is true, but actually irrelevant.

At the end of negotiations what we end up with is more or less the same access to the single market and no real changes in the business environment. Cooperation agreements continue as before and nothing looks that much different on day one. This renders much of the speculation about Brexit entirely redundant. Wolf as much admits this.

It is however Wolf's view that it would deprive the UK of a say on regulations. "In all, the more sovereignty the UK wishes to regain, the less preferential access it retains. This trade-off cannot be fudged." he asserts.

Now I need not go too deeply into the regulation issue once more. The "no say" meme is now in tatters. In any area of regulation you care to look, the EU is a recipient of rules as much as anybody else. Its rules are subordinate to global standards and such standards from the basis of nearly all new EU technical regulation. Brexit not only gives us a right of opt out at the WTO/UNECE level, we would also enjoy EU consultation before any rules went as far as the EU parliament for what they laughingly call scrutiny. What that means is we will never again see the EU abusing its power to foist rules on us that we do not want.

Wolf is right however when he says that there are trade-offs. Asserting sovereignty in regulatory areas does have trade-offs. Because Norway has heavy protections on its own aquaculture and agriculture it is subject to tariffs. It remains that way because that is what Norway chooses to do. Their parliament examined the balance of issues and decided on a case by case basis whether the trade off was worth it. In more areas than one, Norway has concluded that sovereignty matters more. This would be that democracy thing. And the whole point of Brexit as it happens.

And while the regulatory regime doesn't change that much, it does mean that we are free to change it where we deem change is appropriate. It categorically does not mean a huge administrative undertaking to establish a separate regulatory system. All it means is we can change it as and when we want to - and when we want regulatory reform, we have a direct line to the global bodies that make the rules rather than having the EU speak on our behalf. The clout we have in that regard in on the basis of what we bring to the table in terms of soft power and expertise which is considerable when you consider the UK's many assets.

In respect of immigration, while we retain freedom of movement we do have a unilateral EEA emergency brake and if this is deemed insufficient, Britain joining Efta makes Efta the fourth largest bloc in the world. Norway is not alone in wanting reforms to immigration rules and we would have the collective clout to bring about a round of talks for reforming the EEA agreement.

There are then only really the peripheral matters of continued trade with third parties. Where there are no fundamental changes in circumstances many of the agreements we have via the EU can either be replicated or continued under the presumption of continuity.

What matters, though, is the future of trade. The dinosaur hacks of the FT are fixated on "free trade deals", many of which are not actually that useful to UK industry and we would benefit more from independent participation on global forums to remove technical barriers to trade. In that respect the traditional bilateral trade deal (or FTA as they insist on calling them) is obsolete. The future is the development of common regulatory frameworks that extend far beyond the confines of little Europe. Being independent of the EU ensures that we put the brake on the EU's gold plating tendency while having first dibs in the global arena.

In so many ways, Brexit gives us the best of both worlds. The continuity of single market access along with trading agility, free association with global alliances and a functioning veto. All we get from the europhiles is that we can't have our cake and eat it. It turns out we can eat the cake and ask for seconds if we so choose.

The fact is the petty problematising is not insurmountable, and though we can say they will be some disruption, we are looking at a system of European governance that most definately needs disruption, along with shaking our domestic government out of its complacency and rebuilding our expertise in managing the many challenges a globalised world presents us with. Brexit means we end up with a more agile, more democratic Britain and for the first time in as long as anyone can remember, we will have resolved our battle with Europe and both are free of a long standing dispute which has ultimately done nobody any favours.

It seems to me that there is everything to gain from leaving the EU and to remain in it would be a squandered opportunity. As Europhiles are keen to remind us, the EU takes several years to complete a trade deal. I don't think we can afford to wait. If we don't leave all we're going to get is slow economic strangulation and stagnation and an absolute guarantee that neither the EU nor domestic politics will be reformed. This is not the "certainty" I am looking for.

Time and again we have financial sages saying "we do not know what Brexit looks like", but really this says more about their own incomprehension than it does Brexit. They are out of date in their understanding of trade issues and largely oblivious to how regulation works, instead fixated on economic projections that take no account of the political realities of how we will leave the EU. What these people in the FT and elsewhere are telling us is that they don't know the politics, they don't know the law and they don't know where to look. They are telling us that they suck at their jobs and really if we want to know what Brexit looks like, the FT is the last place you are going to find any grown up answers.

Tuesday, 26 April 2016

Brexit lies from the Guardian


Former Lib Dem MP, Paul Burstow, lies for the Guardian today.
"The way we regulate the marketing and authorisation of new drugs would also be thrown into confusion. The European Medicines Agency is the hub of EU pharmaceuticals regulation; it is based in London. Were the UK to leave the post-Brexit government would face a huge administrative undertaking to establish a separate regulatory system for pharmaceutical safety. Taken all together these changes would make the UK a far less attractive place for life science investment."
Except that the EMA serves the countries of the European Economic Area as well as having Mutual Recognition Agreements with Switzerland. The chances of ending cooperation with the EMA are remote. Not forgetting course the influence of the International Standards Organisation and the World Health Organisation.
The WHO is charged with the tasks of developing and maintaining global norms, international standards and guidelines for the quality, safety and efficacy of drugs, and providing guidance in harmonization efforts. 
The development of norms, standards and guidelines to promote quality assurance, medicines regulation and safety of medicines is an integral part of WHO’s Constitution and a unique responsibility. It has been endorsed and supported through numerous World Health Assembly resolutions, and more recently in those on the Revised Drug Strategy.
The increasing globalization of commerce and trade, and the merging of pharmaceutical companies, are internationalizing pharmaceutical production. International pharmaceutical norms and standards are thus more important than ever before since they serve as global tools aiming to ensure safety and quality of medicines. One of WHO’s roles is to continue to develop such international norms and standards, and to help countries implementing them.
Safety and quality of pharmaceuticals are also being promoted through regional and international efforts to harmonize drug regulation, such as those led by, ASEAN (Association of South-East Asian Nations), CAN (Andean Community), CADREAC (The Collaboration Agreement of Drug Regulatory Authorities in European Union Associated Countries), the European Union, Gulf Cooperation Council (GCC), the International Conference on Harmonisation (ICH), MERCOSUR (Southern Common Market) the Pan American Network on Drug Regulatory Harmonization (PANDRH) and the Southern African Development Community (SADC). These efforts are to be welcomed since international consensus on quality, safety and efficacy standards can speed up access to medicines.
The EU is just as bound by that which is passed down to it as anyone else. Like most other areas of regulation, pharmaceuticals regulation is heavily contingent on global standards and practices and in many instances will not be the originator of its own rules. 

There is zero reason to believe the UK is going to go down the road of unilateralism and deviate from the global standard or even the EU standard without just cause. On that basis there is no good reason why we would not be able to obtain a mutual recognition agreement in the unlikely event that we did not secure an EEA based agreement. 

The short of it is, not much is going to change unless of course we want it to. Rather than being "a huge administrative undertaking to establish a separate regulatory system", the chances are much would be left as is - not least because insurance companies will insist on conformity to international standards. The NHS is not immune from such commercial influences. The only likely deviation is in those instances where our own exceptional health system decides that deviation is in the interests of service improvement or innovation, in which case we have a direct line to the top tables rather than going via the EU. I'm not seeing a downside. 

Burstow also has it that leaving the EU would undermine the UK’s defences against infectious disease, citing our involvement in the European Centre for Disease Prevention and Control in Stockholm. "Given recent threats from Ebola and the Zika virus, this hardly seems a good time to weaken our defences" he says. Well quite. But with all transboundary concerns like communicable diseases it's in nobody's interests to be exclusionary, nor is there any sane reason why the UK would be isolationist. Iceland, Liechtenstein and Norway also participate in the ECDC. There is no reason why we would not. Again we should also note that no system operates in isolation and most governments have means of coordinating their responses to threats.

As usual we're not looking at credible reasoning to stay in the EU. We're looking at paranoid histrionics from people who would like us to believe that international cooperation does not happen without the EU and that Brexit necessarily means the end of international cooperation and pooling of resources. And that is really something that characterises europhilia. A fundamental dishonesty in seeking to convince voters that civilised society did not exist before the EU and could not possibly continue without further EU political integration. 

Brexit: a world beyond trade deals



In late 2015 more than 200 people were set on fire after an explosion at a water park in Taiwan caused a fireball to tear through a huge crowd today. Coloured powder sprayed onto hundreds of people suddenly ignited, with flames engulfing people as they tried to flee. It took just seconds for the fire to spread through the throngs of revellers, with dozens seen running for their lives through the huge blaze. Taiwan is now, for obvious reasons, keen to improve regulations for hazardous areas following a number of fatal explosion incidents. That pesky red tape we keep hearing about.

In the light of big explosion disasters affecting the country over the last three years, notably the series of gas explosions in the Cianjhen and Lingya district of Kaohsing in 2014 there is a need for improvement of the regulations for hazardous areas. That's where the International Electrotechnical Commission (IEC) comes in. More specifically the IEC System for Certification to Standards relating to Equipment for use in Explosive Atmospheres. This would be the appropriate technical standards body.

Emerging economies and even developed ones increasingly look to global forums for the benchmarks in regulation. In this, Working Party 6 of United Nations Economic Commission for Europe (UNECE) is already tasked with providing a regulatory blueprint for countries wanting to improve their national explosion protection system.

The document ‘A common Regulatory Framework for Equipment Used in Environments with an Explosive Atmosphere’ is available for download from the UNECE homepage in different languages. From the very beginning of this project there has been close cooperation between WP 6 of UNECE and the IECEx system and as you can see, standards are absolutely integral to the regulation. 

In this there are enhancements and improvements happening all the time. The stated aim of IECEx is to harmonise the basic rules of the four conformity assessment systems - besides IECEx there are the IECEE system dealing with general tests of electrical equipment, the IECQ system dealing with the surveillance of quality inside the supply chain for electronic components and the IECRE system dealing with the test of renewable energy equipment. With the support of the IECEx National Committee of the Peoples Republic of China, there should be a way to integrate Taiwan in the IECEx community.

In that regard, there is already a cooperation agreement in place between various agencies
A historic agreement between IEC, International Laboratory Accreditation Cooperation (ILAC) and International Accreditation Forum in order to significantly reduce cost, time and complexity for the reassessment of certification bodies and testing laboratories. One of the most important outcomes of the tripartite MoU (Memorandum of Understanding) is a single reassessment, instead of three, and be accepted by all three bodies. We are now looking at a single system globally for 
  • Automotive refuelling stations or petrol stations
  • Oil refineries, rigs and processing plants
  • Chemical processing plants
  • Printing industries, paper and textiles
  • Hospital operating theatres
  • Aircraft refuelling and hangars
  • Surface coating industries
  • Underground coalmines
  • Sewerage treatment plants
  • Gas pipelines and distribution centers
  • Grain handling and storage
  • Woodworking areas
  • Sugar refineries
Not only does it form the basis of UNECE regulations, you won't be surprised to learn that such standards are encoded into the International Maritime Organization’s SOLAS Convention. Enter the Paris Memorandum of Understanding (aka Port State Control). Port State Control (PSC) is the inspection of foreign ships in other national ports by PSC officers (inspectors) for the purpose of verifying that the competency of the master and officers on board, and the condition of the ship and its equipment comply with the requirements of international conventions (e.g. SOLAS, MARPOL, STCW, etc.) and that the vessel is manned and operated in compliance with applicable international law. It is to these international assessment standards to which they will be working.

Lost yet? I'm not surprised. Who are these people? What do they do? To whom are they accountable? Let's not even go there. The point is that while some of these standards and conventions go back into the mists of time, the trend here is ever more cooperation between international non-state actors working well outside the realms of government, even working above the UNECE level to provide the benchmarks and regulations for international trade. It is this that forms the basis of a global single market and nearly all technical EU regulation. The EU is not the top table.

What we see is that countries seeking to improve their own regulatory regime increasingly turn to global forums and existing conventions and in that regard are every bit as much a recipient of rules and regulations and Britain is as a member of the EU. Being that the case, if Britain seeks regulatory reform, the EU is the last place to go to try and influence the rules. It's at the bottom of the chain and is little more than an obstructive middleman as far as UK interests are concerned.

While the above illustration gives a massively oversimplified picture of the regulatory process, you can see that regulatory harmonisation is very much an ongoing global activity, and it evolves almost organically by means of a desire for greater clarity and cost effectiveness.

In this economy, insurers are increasingly seeking to reduce their liabilities, and insisting on conformity to international standards. Not only does it reduce paperwork but also risk. Inspectors and assessors also need only learn a single framework that applies nearly everywhere on the planet. In terms of reducing costs to business this is seismic in influence when compared to "free trade agreements". There is every advantage in global harmonisation.

In this there are networks of Mutual Recognition Agreements not only for standards and inspections but also qualifications. It is these agreements which facilitate trade far more than agreements on tariffs. Many of them between blocs and nations are virtually identical and could just as easily be consolidated into multilateral cooperation agreements for improved transparency and greater reach.

In this domain just a single agreement to recognise standards is more valuable to industry than any agreements on tariffs - and if the basis of such rules is a single global framework (WTO TBT) then they are infinitely more achievable than than going for big hits like TTIP.

TTIP in some ways highlights the improbability of securing a comprehensive deal with the USA. The USA is infamously resistant to adopting global frameworks already employed by the UK, instead maintaining its own. Consequently the technical difficulties in realising mutual recognition are many. Ossified systems and nearly impossible to establish equivalence and even more difficult to reform. It's like asking Brits to drive on the right.

This is why cooler heads won't be surprised if TTIP talks collapse completely. President Obama said yesterday "If we don’t complete TTIP this year, political transitions in the US and the EU could leave it unfinished". And that, in a nutshell, is why bilateral comprehensive bundled deals are the least effective means of securing progress.

Now supposing you could hammer out an agreement of this nature, it would have to be an exchange of highly experienced and qualified auditors and technicians, the result of which wouldn't be up for much debate once it reaches the ratification process. This is why lowly MEPs are unable to make any significant amendments.

Unless they can present compelling reasons for sending it back up the chain (keeping deadlines in mind) they will more than likely be ignored lest the whole package stall and we end up back at square one. With regulation becoming increasingly globalised and forged on a multilateral basis, the scope for MEPs tinkering with the rules is minuscule. And if you've met any, you probably think that's a good thing. You might even ask what the point of having MEPs is. Answers on a postcard please!

There are, however, some areas where the international frameworks are not fully developed. This would certainly be true of services regulation where even the EU admits that its own provision are n their infancy. This then triggers a space race between EU bodies and international bodies. What it isn't is cooperation. The EU is often in a race to impose its own frameworks on international bodies, not necessarily for the facilitation of trade and more to do with ideological supranational reasons.

There is also a protectionist element to it. If there is no global standard then the EU can create regulatory barriers similar to those that exists for African producers who do not as yet conform to global standards. But this is becoming increasingly rare are recent years have seen an explosion in multilateralism and global cooperation on standards and regulations. Not only are EU rules subordinate to the global standard, as more nations come on stream into the global harmonisation efforts, it is increasingly losing its ability to control the agenda. The EU, as much as anybody else is a recipient of rules. The EU is becoming increasingly redundant.

The danger of continued EU membership is that there is virtually no democratic oversight in all this and we are subject to the full force of globalisation. We take the rules the EU insists on with no real say in it. In that regard I find it most irritating that people get sucked into tit-for-tat rows about how much law comes from Brussels. As much as the origin scarcely matters, the volume is wholly irrelevant too. If you look at regulations you will see very short passages reading "The member state shall replace their standards and practices in accordance with x standard". And while that is just fourteen words - they can wipe out an entire industry.

And so then it doesn't matter if it's one law or one million. Any rule adopted without right of refusal or opt out is wholly intolerable. There are times where compromise is in the greater good but the word compromise implies member states have a choice. That is not the case with the EU - and it never will be. Such is built into the EU treaties. The inherent problem with EU membership is that increasingly does the talking for us.

What that means is the needs of the UK economy are often overlooked or sidelined entirely in the rush to create a common EU framework, where sometimes no such thing is required, where it is more important to have a global common framework specific to a sector or industry rather than a geographic region. This is why we should be looking at creating multiple tiers of common markets based on common rules spanning many sectors and industries, particularly in services where there is every reason to think globally.

In order for our voice to be heard our own industries need full representation not only at the UNECE level but in all of the standards bodies and super regulators. At least that way we have an effective early warning system for changes to the regulatory regime and right of unilateral opt out presently prohibited by the EU.

EU advocates would argue that such opt outs are the very antithesis of creating a single market, which is a view I have some sympathy with, but in most of the ways that matter, commonality is evolving faster than the EU can keep pace with. All the EU does is remove the necessary protections and democratic checks and balances. Opts outs need not necessarily be permanent either. They just mean we can better manage transitions without the human cost.

More to the point, we need to ask the question what the purpose of harmonisation is. For us it should be about facilitating trade and opening up new markets. For the EU it is about creating a single entity, a single government and a monoculture throughout, hence why it ends up regulating that which is best left well alone. It should not be tinkering with Ukrainian social policy while in a state of low grade civil war.

In this we shouldn't underestimate the influence of IT either. Produce entering the global marketplace is classified by the World Customs Organisation and there are any number of databases online to tell you where your potential markets are. And in looking at this we find the USA is often a closed shop to us even with existing agreements on tariffs. As much as there is no queue to speak of, our trade with the US is about as good as we're going to get until the US undergoes some major domestic reform. Even if TTIP passes, it is unlikely to deliver what it  promises.

To my mind, the reason to be out of the EU is to restore the democratic checks and balances on the rules we adopt, but also to be an agile and independent player, helping to facilitate greater participation in global forums.

We should be looking to expand the global single market instead of viewing it as a threat as the EU does. Our legal, technical and cultural assets make this a possibility. It is less our market size that gives us clout as what we bring to the table. In that regard we bring expertise and the rule of law - which is why we are the top of the soft power rankings.

What we want is to build a global single market where participation is voluntary, where opt outs are not obstructive to the process, where it can evolve at its own pace rather than hanging on what may or may nor pass in the European Parliament or what might be struck out by America turning inward.

Too often we are told that Brexit means we will lose our capacity to shape the rules, but it is our continued membership that diminishes our role in making the rules and by way of rules being global, we diminish our ability to shape the global trading platform. And while the debate is fixated on EU-US trade, that's not where the most potential is. By way of having an integrated trade and aid policy, removing technical and physical barriers to trade we can not only stimulate new export markets but also open up our markets to cheaper produce - and in so doing reduce the need for more destructive forms of aid.

In this regard, when europhiles say we Brexiteers are inward looking, I just don't recognise it. It is they who are parochial minded, largely inward looking and far too fixated with the Anglosphere. In fact, the few Brexiteers most keen on the Anglosphere are batter off sticking with the EU. A truly global outlook is to step outside of the walled garden of the EU and start shaping a single market for the benefit of humanity rather than the paranoid superstitions of little Europeans hell bent on building their isolationist empire.

Friday, 22 April 2016

In a globalised world the EU serves no useful purpose


If I can think of an industry that doesn't need any more headaches right now it's shipping. There is massive oversupply in the market, rates are collapsing and there's the problem of the economics of Triple E ships. Once thought of as the answer to global shipping efficiency, now viewed as white elephants. Like the Airbus A380, some are making too many trips with empty slots. The view is that the industry needs to be serving more destinations with smaller ships.

What it doesn't need is virtue signalling politicians imposing their climate obligations on it. Not if it wants to see growth this side of 2020. Certainly for a global industry like shipping, the last thing you want is several sets of regulations to comply with, hence the international opposition to regional regulatory frameworks.

The International Maritime Orgainisaton (IMO)’s marine environment protection committee (MEPC), which deals with air pollution and CO2 emissions from shipping, has become more vocal especially after the adoption of the first EU regulation addressing shipping CO2 emissions.

Monitoring and reporting of the emissions (MRV) at EU level, however, is just a first step – falling well short of actually requiring ships to do something about reducing their emissions from one of the few sectors exempt from the EU climate target. But you know where this is going.

This regulation, which came into force across the EU in July 2015, was nevertheless more than enough to cause an outburst of protest from the IMO secretary general and at the opening of the May 2015 IMO MEPC. In the presence of the delegation of the European Parliament, attending an IMO meeting for the first time, it was emphatically stated that the preference of the industry and the IMO was for international measures. That's not going to stop the EU.

And this is really why the EU is a menace. We have multilateralism for a reason. To create global standards. Rightly the IMO is telling the EU to get lost (and not for the first time, but this is vital news for two reasons.

Firstly it's an example of where the EU doesn't actually have clout despite the many protestations that it does, and secondly, we see the EU making an attempt to replace member states on global bodies. It is only a matter of time before the EU observer status becomes an official seat.

To me this clearly demonstrates that not only is the EU not the top table of international affairs, its own conduct shows that it is not on the least bit a collaborative institution and that our influence is considerably diminished by remaining in it. Far from advancing our interests or looking to wield greater influence in the common good, the EU cannot break out of its own myopic fixations. Its activity is more about asserting itself as an entity rather than doing something useful.

What is particularly interesting though, is that there is general agreement that the EU does not perform a useful role at global level. British representatives of the maritime industry thought that the Commission's representation at the IMO actually interfered with the UK's ability to act effectively.

Not least of the problems was the EU's tendency to "Europeanise" global standards by adding its own requirements. As a global industry, they felt, shipping should be regulated at the global level, without sub-regional add-ons. As such, the UK Chamber of Shipping feels there is no advantage in the EU having a greater say in IMO under the present circumstances or in the foreseeable future.

Another interested party, Lloyd's Register, explains why the EU performs so badly. Its problem is that it is not a "flag". This means that the Commission does not have international treaty obligations to treaty parties in the maritime world. The UK is a "flag" and does have international treaty obligations.

As a result, while the European Commission may take decisions "for the good of the Union", the practical consequences fall on the flag states. Those states, rather than the Union, should make the decisions.

But there are other problems arising from the EU's semi-detached status. It attempts to forge common positions in IMO negotiations are often counter-productive, making it harder to achieve desirable outcomes. It looks after its own interests while individual Member States try to work with a broader range of IMO member nations towards agreed and workable international rules.

And this is why the EU is the precise opposite of cooperation and internationalism. The empty rhetoric we hear from europhiles just does not match reality and when it meddles on our behalf it has very real consequences and costs for industry and has a serious impact on jobs.

This industry sector suggests that there are occasions when the UK is better off in the international arena as an independent player. As much as we need to be robust in maintaining an independent position, we should also seek to restrain EU influence on such bodies, unless it is tactically appropriate to allow it to play a part. That cannot happen while we are an EU member and in future as the Eurozone EU becomes the dominant voice, we are set to lose ever more influence within.

In the post-Brexit world, however, we are free to forge ad hoc alliances with other players. As we have argued, Brexit does not mean an end to cooperation with the EU either. It just gives us the freedom to choose - which is not exactly too much to ask.

Whatever your view on the necessity for climate targets, that agenda cannot interfere with the normal business of shipping at this point. Kicking a key industry when it is down, on the brink of a global slowdown really is economic suicide.

And this is yet another reason to leave the EU. At top level climate talks among the politicians, there is a herd mentality where there is a bidding war to prove each others right-on credentials. And while they stroll the red carpets, shaking hands and congratulating each other they remain entirely ignorant of the practical, technical and moral consequences of what they do. Every time they tinker they make food and consumer goods more expensive - but it's not them who end up paying the price.

This above all is why the global consensus and domestic governance needs a major shake up and a kick out of its complacency, and from where I'm standing, Brexit is just what the doctor ordered. You can see why they oppose it can't you?

Thursday, 21 April 2016

Brexit: the toxic crusaders


The IMF, The World Bank, The OECD, LSE boffins, Corbyn, Cameron, Major, Branson, Clegg, Blair, Ashdown, Umunna, Brown, Obama and Yanis Varoufakis. Them, academia, most of the major business groups, multinationals and unions - all agree we should stay in the EU. It seems like an impossible mountain to climb. Polite society is very much agin the idea of leaving the EU.

All of them hold one quality. Prestige. Few evaluate them on what they actually say. It's who they are that carries weight. From them we've had a torrent of fear mongering, dishonesty, sanctimony, double-dealing and betrayal.

These people don't care about the British economy. They don't care about you. It is an entirely self-serving orthodoxy. It is a political consensus between those who have the power. And don't tell me Corbyn is a man of the people. In the end he turned on his beliefs in defence of the establishment. He's their man now. And so is Varoufakis - the anti-austerity posterboy. He's been whipped into line.

And what we've had from the Remain camp is nothing but lies, distortions, and cheating. They have their corporate-speak rationales for doing what they do, but they know it's wrong. Any lie will do. They conflate Europe with the EU, conflate the EU with the single market, maintain the illusion that Brussels makes the rules, and maintain the lie that the European parliament is somehow a manifestation of democracy.

They've paid off the universities and made them dependents. They've made supplicants of charities, local authorities, farmers and NGOs. Many of them in their own way being uniquely shafted, but in the end vote with their wallets. They've got the simpering BBC on their side doing their bidding, keeping up a thin veil of neutrality but excluding the new ideas that may upset the applecart. They've even thrown generous regional development grants at multinationals.
 
The EU has spread its red gold across the continent - funding this project and that scheme, supporting international exchanges and generally making people feel that the project is a great big cuddly Father Christmas spreading joy and happiness. Very different from the stern and questioning national and local governments.

And because it's dressed in the soft garb of progressivism and has embraced the corporate cult of climate change it has the unquestioning devotion of the left. I have lost count of the number of times a leftist has told me that leaving the EU means the Tories might be free to do something they don't like. You can't expect a leftist to speak up for democracy now.

The establishment has sewn it all up - and it's not going to let a little thing like a referendum get in the way. Everybody who depends on the establishment must crawl out of the woodwork to pile on the fear. They must do their bit. The established order very much is threatened by Brexit and is now in full self-preservation mode. Democracy is a very real threat to their consensus. Democracy is too disruptive, and it's better if the "experts" hold dominion. The people having a say might mean that their sacred cows are not fed oodles of taxpayers money.

Then take a long hard look at all these smarmy anodyne grandees. Most of them have ceremonial roles in the UN or sinecures in the EU or some position in the power structure. Either that or they are in a position to benefit from governments who do not answer to their people in any meaningful way. All part of that club where nobody retires without a few million to their name. In every way the establishment has conspired to marginalise voices of opposition with a sneering condescension.

In every way, the public are shut out of policy making and told that their sacrifices are for the common good and that we should bow before our superiors - for they are the experts on how to run our lives.

And that's why many Brexiteers are angry ogres. We've had decades of their rule, decades of their orthodoxy and no means to challenge their political dominance. We've been watching and waiting for years. Watching as successive governments have ceded ever more power, ever more control and have insulated themselves from the wishes of the public. Well, now we've got our referendum. And now we see just how deeply the game is rigged.

So we're angry to say the least. Angry at what has been done to us, done in our name, and angry that once again democracy is being trampled on to preserve the orthodoxy. And we do not take kindly to being lied to.

There's an old saying that politics is between you, me and the swamp. Minorities on either side, playing games for the votes in the middle. But unlike classic politics, this is not a left vs right dispute. There are only those above the line and those below the line. Those who have the power and those who do not. In this estimation, the establishment holds all of the cards. It has always known a challenge to its legitimacy would one day come which is why it set out to bribe institutions in advance.

We Brexiteers on the other hand have what we have. An angry rabble with keyboards. And let's face it, none of us are ever going on the front cover of Vogue. We're a bunch of griping, moaning angry people who seem to hate just about everyone in politics and everything they do. We're not helped by a pretty shoddy Leave campaign either, with some fairly odious spokesmen.

We are irredeemably spit. We all hate each other. I despise the Toryboys and I loathe Ukip. I hate all political tribalism. I'm not a joiner of clans. But there's one thing that unites us all. All of us can articulate a better definition of democracy than any of those would would have us remain in the EU - and though we can't seem to agree on coherent Brexit plan, we all know what democracy is, why we should have it and crucially why the EU is the absolute opposite of it.

And that's why this referendum really settles nothing. The Remainers will play their little games, steal the referendum and carry on as before; feathering their own nests and consolidating their power. But we're not going anywhere. We're not giving up. And we are taking names. Us Brexiteers hold deep grudges. We are in it for the duration.

We will remember Cameron the fraud. We will remember Hague and Corbyn as turncoats. We will remember the frauds like Boris Johnson who used the cause for their own advancement. We will remember the parasites who had their fingers in the till. We will remember all those hacks and policy wonks who twisted the truth. We will not forget what was done here. And unlike 1975 - we have a full record of who said what. The internet never forgets. 

In fact, we are going to be pure poison. If you thought the SNP were sore losers, you ain't seen nothing. A remain vote will ensure domestic politics remains permanently toxic. While these part timers waft into to the Brexit debate with their tedious rhetoric about Brexiteers being little englanders and xenophobes, and venting their empty rhetoric of cooperation and internationalism, we have been here from the beginning. Will be here at the end. 

You can stifle an idea, but you can't kill one. Especially not that seemingly antiquated notion that the people should be able to refuse their government. The EU may be powerful but it is not stronger than the desire for democracy. And if it takes another generation to get what we want then that is what we will do. There is only one way this fight ends - Britain leaving the European Union. We will either do it amicably and by the book - or we will do it some other way. The general public may well go back into their political slumber, but we Brexiteers will be back - and in between, we are going to cause merry hell. 

Wednesday, 20 April 2016

Brexit is a process, not an event


While this blog is on the subject of select committee meetings, I happened to watch Owen Paterson in action yesterday afternoon. While he is not the most compelling television personality, few in Westminster doubt his sincerity and contribution to government. He spoke of attempts to get a fundamentally bad aspect of the Habitats Directive amended. (Crop rotation)

To cut a long story short, he was told categorically that he could forget it. It took several years to reach an agreement and nobody is keen on reopening a Pandoras Box for renegotiation. Open it up to one amendment and then everybody else wants one and it must then go through the legislative process again. So bad one-size-fits all policy stays in place without the possibility of reform with no opt outs.

This is precisely why David Cameron did not seek to reform the EU treaties, or any instruments within. All we got was a scrap of paper reaffirming procedural powers we already have which have no real legal authority over the EU institutions. Now to me that is enough reason to leave. The EU is unresponsive and unreformable and makes bad policies that cannot be changed in any meaningful way.

In that regard I find it most irritating that people get sucked into tit for tat rows about how much law comes from Brussels. I've made the point ad nauseam that the EU adopts most of its rules from global bodies and many of you already know my concerns there. But the volume is wholly irrelevant.

If you look at regulations you will see very short passages reading "The member state shall replace their standards and practices in accordance with x standard". And while that is just fourteen words - they can wipe out an entire industry.

And so then it doesn't matter if it's one law or one million. Any rule adopted without right of refusal or opt out is wholly intolerable. There are times where compromise is in the greater good but the word compromise implies member states have a choice. That is not the case with the EU - and it never will be. That is reason enough to leave.

But that's actually not strictly the point of this post. The point is that because there is a reluctance to open up every Pandoras Box for renegotiation or reform, it really tells us a lot about how we will leave the EU. Any one policy area that becomes part of our Brexit settlement will not be opened for tinkering. Not with a two year time limit, and not when it requires agreement from other member states. Just not going to happen. To my mind this reaffirms the idea that we very much will swallow what we are offered without seeking to get bogged down in detail.

As we have seen, Remain analysts say the EU will play hardball and present us with a list of demands that we adopt most of the rules and continue paying for the cooperation agreements. We will. There is no better deal, there is no mythical bespoke "British Option" and the WTO option is completely out of the window for both parties. We will be offered an EEA solution or nothing. I do not see this as playing hardball at all. It's just a pragmatic recognition that something as complex as the EU does not get unpicked in two years.

Critics say that this is a Hotel California scenario where you can check out but never leave. And that really is the problem with both sides of this debate. Everybody is obsessed with this notion that day one after signing the Article 50 accords that the process of Brexit is complete and we all go back to the fields. That's not how it is going to work in reality. On day one, just about everything is going to be much the same as it was. All we will have secured is a recognition that we are no longer subordinate to the the EU. Materially, nothing is different.

It is only through very gradual piecemeal reform of the various cooperation agreements do we get to uncouple form the labyrinth of EU integration. It's a great deal more complex and time consuming than anybody really understands. Certainly not MPs and MEPs. What it doesn't mean is massive savings and it doesn't mean a slash and burn of red tape. But then it doesn't mean huge disruption for business either.

Because we leave the statute book the same on day one of Brexit, the domestic reforms begin on our own time table suchas replacing our fishing and agriculture policy. These will be gradual increments over years.

The fact is we are never going to fully decouple from the EU. We are never going to end many of the joint cooperation agreements and collaborative projects - nor would we wish to. This has never been about turning isolationist or ending cooperation. There is every advantage in maintaining mutual standards and common regulatory frameworks where they are viable but the entire point of this is the right to choose and the right to speak on our own behalf at all of the global bodies where the rules are made.

And in this all we're getting from the Remain camp is layer upon layer of complexity and snare traps as to why it simply cannot be done without seriously damaging our international standing and our economy. Nobody can say for a fact what the full consequences will be. But we can say they will be manageable specifically because the process is gradual.

The complications that arise are not permanent and if anything they are the added motivation to get busy engaging in the WTO Trade Facilitation Agreement. Bringing down transaction costs is a far more fruitful and worthwhile activity that hammering out agreements on tariffs. It is going to be a mammoth task in sorting out the various messes that have festered for forty years and there will be a degree of trial and error along the way. And it's probably going to cost us money rather than save money. If that's what they want us to admit then fine.

But what is the alternative? The certainty the EU offers is to become a bit part of a European oligarchy where the rules are made at the global top tables without us having a real say and a veto, we're pegged to the job destroying and growth killing policies of the EU and tied to its creaking trade policy which takes years to accomplish anything if it succeeds at all.

Gradually we will lose our standing internationally and eventually, as EU policy-making coalesces around the needs of the Euro we become second rate influence within the EU. We will be a third rate country if we remain a country at all. Cameron has not secured an opt out from ever closer union. The first piece of law that arrives on our statute book from Brussels is a betrayal of that promise.

And while there is no sudden death inside the EU and the rot will be gradual, a death by a thousand cuts, there is no reform on the horizon. Not in any meaningful sense. No overhaul of the various directives that cripple development and our energy sector. No reform of the intuitions and because we are forever bound by the limitations of various directives we will see no domestic policy shift either. We will be caught in an elaborate web of managerialism where nobody really knows who is accountable for what or how to change anything. What we get for staying in is the grinding status quo with anaemic growth.

Brexit on the other hand is a chance to pull the integration lever into reverse and back out as gradually as we went in. In may cause a short term marginal recession. It may cause a market shock followed by a rapid rebound and it may cause us to lose access to a largely useless EU trade deal here or there, but it will be the start of real change and an opportunity to engage in the emerging global single market.

Nobody denies that this will be a a challenge. It will most certainly focus minds in Westminster and Whitehall. They will be tasked with accomplish something real rather than off-shoring their responsibilities and being passive recipients of legal instructions. They will have to listen to businesses and act on their input rather than fobbing them off with the same old excuses. They will have to seek out and exploit new markets and new trade opportunities. They will have to make full use of their new found agility. In turn we might actually start seeing politics of substance once more.

In the end it's a fairly simple question. Do you want the EU as a supreme government? I really don't. I think it spells the death of Britain as a self governing country and I think that one day we will be forced out of the EU under less controlled circumstances and I think that will cost us a whole lot more. Unimaginably so. So we can either bite the bullet or we can simply resign ourselves to the rule of the bureaucrats and live as supplicants in a post-democracy society. I don't want that. That's why I am voting to leave and you should too.

It's time to disown Vote Leave


Anyone wanting to leave the EU commanding a basic grasp of the issues will have been recoiling in horror were they watching the performance by Dominic Cummings yesterday. It was a less than gratifying display of arrogance, contempt, obnoxiousness and evasiveness. For from being a wily rebel with all the answers, this was a demonstration of a man far out of his depth and stalling for time. There is no pretence of coherence or even an attempt at consistency. He was rightly taken apart.

Now I'm no fan of our MPs and I have sympathy with the Cummings view that there is a Westminster herd mentality, but this was an example of MPs doing what they are supposed to do. Bringing clarity to complexity. A few simple questions asked by Rachel Reeves were met with sneering contempt and a carefree shrug. These were not unreasonable questions, not far removed from what many will be asking in the coming weeks. How does Brexit affect the small to medium sized enterprises?

In this we got evasion from Cummings with a heap of sneering supposition and yet more griping about the evils of the single market. This was her reaction...


Now we know the lady isn't exactly a sceptic but you would think Vote Leave would understand the necessity at least to send someone with manners to present a compelling case. Such MPs are after all opinion formers in their own right. In that regard it might have been smart not to have a campaign strategist with all the innate charm and lovability of an itchy verruca.

This display prompts Allie Renison, Head of Europe and Trade Policy at the Institute of Directors to tweet the above top illustration. While she herself is not a Brexit advocate, she recognises just how much of an asset to the remain camp this petulant display is.

For sure, our side was never going to convince the likes of Renison or Reeve but the very least we could do is not hand them fresh campaign material. In this regard, we might as well have let one of the angry kippers lead the campaign because the material difference is slight. A fantasy fiction solution whereby we have full trade continuity without paying anything into the budget without even triggering Article 50.

It's not going to take very long to filter through the media that Vote Leave between them really don't have a clue. Johnson with his witless posturing about Canada and now Cummings and Gove with their fantasy land scenario that bares no resemblance to what will happen in reality.

Worse still, the campaign is now deeply bogged down in a flurry of meaningless estimations, facts, figures and spurious economic metrics from both sides. Exactly where we did not want to be. This campaign hinges on reassuring the public on economic grounds - yet from the outset Vote Leave have been pushing dodgy figures with no intellectual foundation to their campaign. 

Now it is looking doubtful that Vote Leave can claw its way back. They have made so many repetitions and confirmations that they do not see us being part of the single market, do not intend to use Article 50 and insist they will save £350m a week, there is no chance whatsoever of presenting a credible case without making embarrassing u-turns. To fix this it would require Cummings and Elliott to be sacked - which is simply not going to happen. There isn't time.

It is now incumbent on all people who genuinely want to win to disown Vote Leave and the Tory clan, and focus on the more realistic scenario that we will stay in the single market thus rendering the economic concerns inert. We need to make it clear that the Electoral Commission has no real democratic legitimacy in appointing a limited company run by entirely self-selecting executives - and we need to make it clear that Cummings speaks only for himself. Now more than ever we need to make this a peoples campaign. If we rely on Vote Leave they will bury us. 

Tuesday, 19 April 2016

Brexit is an investment in the future


Douglas McWilliams, president of the Centre for Economics & Business Research says that "if we leave the EU and limit immigration, we'll be worse off. If we leave but stay in the single market, things will worsen initially but then improve." 
The Treasury has been derided for its prediction that each UK household would be £4,300 worse off if the UK were to leave the EU. When official forecasts have been unusually volatile and inaccurate, they have been brave to attempt to predict in detail contingent outcomes nearly 15 years ahead."
But the Leave campaigners have been criticised for failing to describe the economic implications of leaving the EU. To try to help our clients understand the implications, we have tried to put together what analysis is available to give an impression of what the UK might look like after Brexit. We have tried to be as neutral as we can but obviously any view on this has to incorporate assumptions which are liable to be disputed, especially with passions high on both sides.
First, what might happen if we stay in? I’m assuming that the European economy will continue to have a difficult time and that there will be another Euro crisis this summer. Ultimately the Greek debt burden is simply not payable and some of it will have to be forgiven. Other EU member states may also be in a similar position. It is unlikely that the remaining Member States will make this deal without further control over the fiscal budgets in those states where debts have been written off. It is also difficult to see how the Eurozone can grow particularly quickly given its current level of regulation and competitiveness.
What might happen if the UK leaves? In theory it is highly uncertain but there are transitional arrangements that have already been negotiated and my best guess is that these transitional arrangements will largely determine what actually happens. I am assuming that the most likely outcome would be that the UK stays in the Single Market and therefore has largely to accept existing EU trading agreements and migration rules as well as product regulations.
The UK would probably want to rejoin EFTA and negotiate through EFTA on future developments. There would probably be some (small) net Budgetary contribution but a saving of at least £500 million a year in net contributions and more on the gross contribution. The UK would not be in the Common Agricultural Policy or Common Fisheries Policy and would benefit accordingly.
If this were to happen, leaving the EU, which is not priced in to markets or corporate thinking would be quite a shock and we should expect a sharp fall – perhaps 10-15%  - in sterling. Inward investment would also be blighted until investors were comfortable with the new arrangements. This hit would last at least two years while any new arrangements were negotiated. GDP would be reduced by the initial effects of the devaluation, by monetary policy that would have to be tighter than otherwise and by the reduction in inward investment – probably there would be negative growth in 2017.
But once the arrangements had settled down, the new lower exchange rate would make the UK look rather more attractive and most of the lost GDP would be recovered and quite likely the economy would settle on a slightly faster growth path. The economy very much needs a lower exchange rate and Brexit might just be the catalyst that delivers it. Although the outcome is highly uncertain, on this scenario it is more likely that GDP would be higher by 2030 after Brexit than lower.
BUT all this depends on being able to trade with the EU, attract inward investment when things settle down and keep the flow of skilled migrants which do so much for the economy and particularly the Flat White Economy covered in my recent book. But the book also warns that a halt to net immigration could cost as much as 6% of GDP per capita by 2025. This would be scary stuff – more or less on the scale of the Treasury forecasts for the negative effect on GDP from Brexit.
What all this implies is that the advantages of both leaving the EU and staying in are greatly exaggerated. We are unlikely to become core members accepting Schengen, the euro and fiscal integration if we stay in. Equally we are unlikely to leave the Single Market even if we leave the EU, in which case we will largely have to accept EU rules on migration, product regulation and trade.
So there you have it. Not that far removed from anything I have said. There is a short term price to pay but Brexit is largely economically neutral. Two years of pain to settle a forty year dispute. Alternatively, we can take the gamble and stay in the EU - where nobody can say what will happen and we continue on as before with nothing really resolved.

I won't attempt to downplay the fact there will be a transitional disruption. Much of this is down to public and corporate ignorance of what Brexit entails and what the likely outcomes are. Their projections will be based on speculation based on incomprehension of the Brexit process which is widespread and helped along by poisonous propaganda from Remainers.

That said, if the pace of the Brexit debate is anything to go by, and how quickly ideas can spread, we will see the corporate world catching up faster than anybody. After the vote, nobody will be in a rush to downplay Britain's prospects then and we might then get some honesty from the government. In that regard I do not expect the transitional downturn to be as long or as deep as Douglas McWilliams expects.

At worst we have two years of unsettled markets where there will be winners and losers. But the fundamentals do not change. Britain is still a first world dynamic economy with countless assets and factors in its favour which are timeless irrespective of the UK's membership of the EU. On that basis, I would rather bite the bullet and vote to leave than vote for the stagnating certainty of the status quo and the political stalemate that comes with it, with absolutely zero chance of meaningful domestic or EU reform.

Like many Brits, I want to see real change. I want the EU question resolved and I want to do it now while we can quantify the effects and the likely means of exit. To do it any other way would be to leave it to chance or to leave nothing resolved.

Should we duck the question now, I think we will store up pain for the future. We have always been ill at ease with our EU membership. It has always divided the country and it has divided us as people. It has set Scotland against England and England against Europe. It creates disunity. We should not allow it to fragment us further.

What I do know is that if we do not vote to leave this time, we will be back here again, and next time we may be forced to leave in wholly different, unknowable circumstances - and that really will cause pain and uncertainty. Just for once, let's fix the roof while it's not raining too heavily. Britain free of EU integration but still inside the single market is the best of both worlds, From there we can choose our destination. If we remain in the EU, our destination is a foregone conclusion - a supplicant of a creaking supranationalist empire, too slow to respond and too broken to reform.

I am under no illusions. Brexit won't be entirely without consequence - but the price we pay, just for once will be an investment in our future. That is why I will vote to leave without hesitation. It's really the only chance we're going to get for reform, and a bit of a shake up will do a lot of good. The money men may lose out. But they should have thought about that before telling so many lies about Brexit, meddling in our politics - and the politicians should have thought about that before ratifying the Lisbon Treaty without even reading it.