EU Referendum: remember Verdun

Monday 30 May 2016  



In solemn ceremonies yesterday, in the forests of eastern France, French President Francois Hollande and German Chancellor Angela Merkel marked 100 years since the Battle of Verdun, determined to show that, despite the bloodbath of World War I, their countries' improbable friendship is now a source of hope for today's fractured Europe.

The 10-month battle at Verdun - the longest in World War I - killed 163,000 French and 143,000 German soldiers and wounded hundreds of thousands of others.

Between February and December 1916, an estimated 60 million shells were fired in the battle. One out of four didn't explode. The front line villages destroyed in the fighting were never rebuilt. The battlefield zone still holds millions of unexploded shells, making the area so dangerous that housing and farming are still forbidden.

The Battle of Verdun is to the French and Germans what the Somme was to the British, a battle which witnessed a million casualties in four months, with almost 20,000 British dead on the first day, 1 July 1916, when our soldiers stormed "over the top" in a vain attempt to take the German positions.

However, by the time Britain marks the Somme centenary, says the Guardian, the result of the EU referendum will be known.

But with three and a half weeks to go before the vote, it says, we should make the imaginative effort to understand the Verdun centenary too. Just as British soldiers died for France on the Somme, so French soldiers died for Britain at Verdun.

In a similar vein, it says, Sunday's reaffirmation of Franco-German reconciliation is an event that speaks for us, too. It is all too easy, after 70 years of European peace and 100 years after Europeans slaughtered one another on the western front, to ignore what has been achieved by Europe's common institutions in providing a stability in Europe that did not exist there before.

We in Britain, this thoroughly Europhile newspaper says, "have a responsibility to do our part to ensure that this stability and unity do not unravel. We should all remember Verdun".

And indeed we should remember Verdun, but not at all for the reasons the Europhiles would wish to impress upon us. The men who died there, and the many to who died afterwards in vile conflicts, deserve more than that.

The real reasons we set out in our book The Great Deception, where we remark that, despite the official hagiography of the EU firmly rooting its genesis in the post-WWII period, the First World War in general and the Battle of Verdun in particular was far more important to the intellectual genesis of the EU.

So vital is Verdun that we start Chapter One with an account of how, on 22 September 1984, two portly middle-aged men stood holding hands in front of the largest pile of human bones in Europe. One was the President of France, François Mitterrand; the other the Chancellor of Germany, Helmut Kohl.

The reason why these two most powerful political leaders in western Europe were staging a well-publicised act of reconciliation before tens of thousands of graves was that the site of this ceremony was the ossuary at Douaumont, just outside Verdun in eastern France. 


This colossal battle of attrition had been launched in February 1916, when the French commander, General Philippe Petain, pronounced that the fortresses on the hills overlooking Verdun on the River Meuse were where the advance of German armies into his country would be brought to a halt.

His legendary words Ils ne passeront pas were endorsed the same day by France's prime minister, Aristide Briand. For nearly a year, the French and German armies battered each other to destruction in the most intense and prolonged concentration of violence the world had ever seen. French artillery alone fired more than twelve million shells, the German guns considerably more. The number of dead and wounded on both sides exceeded 700,000.

The impact of this battle on France was profound. Because of the way in which her citizen soldiers were rotated through the front line, scarcely a town or village in France was untouched by the slaughter.

Among the two and a half million Frenchmen who fought in the battle were France's future President, Charles de Gaulle, and Louis Delors, whose son Jacques would one day be President of the European Commission.

Present for several months fighting for the other side was the father of Germany's future Chancellor, Helmut Kohl. So deep was the wound Verdun inflicted on the psyche of France that the following year her army was brought to mutiny. Its morale would never fully recover.

And from this blow were to emerge two abiding lessons. The first was a conviction that such a suicidal clash of national armies must never be repeated. The second was much more specific and immediate. It came from the realisation that the war had been shaped more than anything else by industrial power.

As the battle for Verdun had developed into a remorseless artillery duel, trainloads of German shells were arriving at the front still warm from the factories of the Ruhr. The battle, and the war itself, became less a trial of men and human resolve than of two rival industrial systems. And the French system had been found sorely wanting.

Particularly inferior had been the heavy guns, many dating back to the 1870s, able to fire shells at only a seventh the rate of their German counterparts. More and better guns became vital. But, as France's politicians found to their consternation, manufacturing them and the huge quantities of ammunition needed was beyond the capacity of an industry which compared equally poorly with Germany's. 


This had since August 1914, under the inspiration of Walter Rathenau, been put on a fully integrated war footing, under the control of a War Raw Materials Department. In the summer of 1916, therefore, a crisis-stricken French government gave an industrialist, Louis Loucheur, near-dictatorial powers to reform and develop the manufacturing base.

Before the war, Loucheur had been one of the early pioneers in the use of reinforced concrete. In a national economy dominated by artisan manufacture, he was one of the few French technocrats familiar with the techniques of mass production.

With all the power of the state behind him, Loucheur succeeded in his initial task, even building new factories to make the new guns. But improvements in production precipitated critical shortages of steel and coal, exacerbated by the German seizure in the first weeks of the war of around half France's industrial base in the north-east of the country.

Remedying these shortages required massive imports from Britain, and then from the United States. In turn, this placed considerable demands on shipping. All this required unprecedented economic co-operation between the Western Allies, leading Loucheur to conclude, like Rathenau before him, how far success in modern warfare demanded industrial organisation.

Thus, Loucheur came to reflect, industrial organisation was the key to waging war. From this he developed the idea that, if key industries from different countries, above all their coal and steel industries on which modern warfare so much depended, were removed from the control of individual nations and vested in a "higher authority", this might be the means of preserving peace.

Rarely, though, is Louis Loucher cited as one of the fathers of the EU, although in several important respects, his thinking was every bit as influential in the early stages as Jean Monnet who, as a political "fixer" is actually not known for his intellectual prowess.

But the point that emerges – or should emerge – is that the First World War was in all manner of ways unique. By the time Part II (otherwise known as World War II) had ground its way to its bloody conclusion, the world had changed to an extent unimaginable to the original authors of the ideas which led to the formation of the EU.

Crucially, the post-1945 world was divided into spheres of influence dominated by two super-powers, with the A-bomb and then the H-bomb delivered by unstoppable Intercontinental Ballistic Missiles, holding the balance of terror which become known as the doctrine of Mutually Assured Destruction (MAD).

A third world war was now unthinkable because the outcome could so easily have led to the destruction of mankind as a species – the main survivors on the planet being the hardy cockroach.

It was that, not the now century-old reasoning of a long-dead industrialist which kept the peace in (parts of) Europe. It was certainly not the EU, which came formally into being only in 1992 with the Maastricht Treaty, or the EEC before it, which had little power and lacked any global reach.

It is significant, therefore, that the Battle of Verdun started on 21 February 1916 and is still cited as the reason why we should surrender our democracy (what's left of it) to a supranational construct based in Brussels.

By the time we reach the 100th anniversary of the end of one of the costliest battles of the First World War, on 20 December, this current stage of our rather less bloody battle for independence will be six-months gone.

Whether we succumb to the propaganda based on obsolete ideas, already redundant by 1945, at the end of World War II, is another matter. But the gravity of such issues deserves far more serious consideration than is being given by a media obsessed with shallow personality politics, turning this referendum into an extended game show.

Underlying this referendum are the hopes and dreams of millions of people, and before that, the premature deaths of many more millions, and the flawed political construct that emerged to try to prevent further slaughter.

The frivolous treatment by the media of such issues is an obscenity. Never, ever have we been so badly served by the Fourth Estate – not least by the Guardian which is so cavalier in its reminders.

Only just over a month ago, I placed these words anew on this blog and do so again without hesitation. It is now even more vital that real people should reclaim this debate and accord to it the seriousness that the media hasn't even begun to understand.

In the end, we either control our own destiny as a people, or others control it for us. That is what we must decide on 23 June 2016.



Richard North 30/05/2016 link

EU Referendum: handing victory to Project Fear

Sunday 29 May 2016  


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Last week, as the fog of "Project Fear" rolled out thicker than ever and polls showed the "remains" leaping into a dramatic lead, even newspapers most critical of David Cameron's propaganda blitz were at last zeroing in on why the "leave" campaign is so dismally losing the argument.

So writes Booker in the week's column, noting that "some of us have long tried to point out that the one thing vital to winning this battle was a properly worked-out 'exit plan'".

It cannot be said enough how important this plan is to an effective campaign. It is not (or should not be) an optional extra. Above all, says Booker, it was essential to reassure voters that it would be perfectly possible for us to leave the EU while still being free to trade as part of its single market.

And here's the rub. Vote Leave's deliberate refusal to offer such a plan (as confirmed by the Commons Treasury Committee) has left a black hole at the heart of its campaign.

The lack of a plan, which should have been published before the campaign proper started, has distorted the entire debate. Alone, it could have transformed the argument by pre-empting every scare story on which "Project Fear" relies. Most of the lurid claims of economic devastation simply would not have got off the ground.

As pointed out by Alistair Heath, the "best possible way" for us to leave is for Britain to join Norway in the European Economic Area (EEA).

Rich Norway is as fully part of that market as Britain. But of the 19,532 laws shown on the EU website as currently in force, it has only to obey 5,046 of them, 26 percent. And, as an independent nation, Norway has in fact more influence on shaping those rules than we do, as just one of 28.

The unique advantage of the "Norway option" is that it could provide an off-the-shelf means to neutralise all "Project Fear's" catalogue of horrors. No more "leap in the dark": shut out of the market, millions of jobs lost, house prices collapsing. Problem solved.

This is the point that Vote Leave have singularly failed to grasp. We are not in the soothsayer business and it is not possible accurately and completely to chart a way through the Brexit process. But the fact of committing a plausible scenario to paper, and endorsing it as a credible option, would be enough to reassure most people that the risks of leaving were acceptable.

The main purpose, then, is to neutralise the FUD, leaving Mr Cameron and his "remain" campaign with nothing to say. They have not otherwise been able to give us a single positive reason why remaining in the EU is so wonderful.

But, instead of biting the bullet, Vote Leave have determinedly left this black hole in the official Brexit campaign. It is this that has given "Project Fear" the room to exploit the political vacuum so shamelessly.

But what makes this still more shocking is that Vote Leave were told by their focus groups in the summer of 2014 – two years ago - that the “risk” of leaving would be the decisive factor in the campaign.

Yet the very man who organised this research also ignored it. Dominic Cummings, the one man at the centre of the Vote Leave campaign who could have made the difference, arbitrarily decided against adopting one, and no one else in the Vote Leave campaign had the gumption or foresight to over-ride him.

In June last year, Cummings's perverse rationale was that "creating an exit plan that makes sense and which all reasonable people could unite around" seemed "an almost insuperable task". But when he observed that eurosceptic groups had been "divided for years about many of the basic policy and political questions", that was the real issue to hand. The warring sub-tribes of Westminster, each with their favoured gurus, where not about to submerge their egos for the good of the cause.

Cummings did note that Flexcit had been produced. This, he acknowledged, was based on using the EEA as a transition phase – remaining in the Single Market and retaining a (modified) version of free movement – while a better deal, inevitably taking years, was negotiated.

Furthermore, he acknowledged that this was an attempt to take the Single Market out of the referendum debate. And with that, he promised to "discuss the merits of this idea", when he had "studied it more".

That discussion never happened. There was no discussion at all, not in the open. Snippets of objections emerged, with sniping round the edges, and the egos of Westminster loftily declared the plan a "non-starter". But there was no debate – no honest attempt to resolve the issues. All we got was back-stabbing and snide put-downs. Then, without anything being said openly, the whole idea was quietly shelved.

Much of the reluctance to proceed was based on a misunderstanding of the process. Cummings gave some clue to this when he argued that the "complexity of leaving" would involve "endless questions" that could not be answered, even if the plan were http://www.theguardian.com/politics/2016/may/28/economists-reject-brexit-boost-cameronto be 20,000 pages long".

This specifically reflected the failure of Cummings and his backers in Vote Leave to understand that Flexcit involved the adoption of the EEA and repatriation of the entire acquis, pending a longer term review. Not having properly studied the plan, or discussed it with me, he had not realised the extent to which it simplified the whole process.

The aim was for the day after leaving to be exactly the same as the day before. Only after a gradual, evolutionary process would changes emerge, and then these would be carefully managed, to minimise disruption.

But the great Cummings had already decided. "On top of the extremely complex policy issues", he wrote, "is a feedback loop". Constructing such a plan, he gravely informed us – having given the idea only minimal thought - "depends partly on inherently uncertain assumptions about what is politically sellable in a referendum, making it even harder to rally support behind a plan".

This was the bullshit factor creeping in. Cummings and his backers were already deciding what they wanted to "sell". Without declaring it openly, they had fixed on the idea of pushing savings from no longer paying contributions to Brussels. From this, the "£350 million a week" meme emerged – the same one that is now giving us so much trouble.

At the heart of this was (and is) a core of condescension and contempt for the voting public. From the "market research" he had done, it was clear that 15 years after the euro debate the general public knew nothing more about the EU institutions than they did then.

Less than one percent, he claimed, had heard of the EEA and few MPs, he averred, knew the difference between the EEA and EFTA or the intricacies of the WTO rules. That much, about the parlous state of knowledge of MPs, was doubtless true, but as we have learned, their ignorance is in a class of its own.

But what was very clear was that Cummings was not prepared to entertain the idea that the public could be effectively educated about such things in the time available. This was to be a "dumbed down" campaign, focusing on giving £350 million a week to the NHS.

Thus, when Mr Cameron went to Iceland last October to claim that the Norway option wouldn't work for Britain, Cummings rushed to agree with him.

Having rejected the principle of an exit plan, Vote Leave were being forced to discuss the possibility. But they now rejected the best one because joining the EEA would mean accepting the EU's freedom of movement rules (which could at least be tightened up later) - and it might cost us £4 billion of those billions we pay to Brussels each year. In any case, by then, the obsession with giving this money to the NHS had come to dominate what passed for Vote Leave's thinking.

The trouble is that, by so explicitly rejecting the "Norway option", Cummings was opening the way for the worst exit scenarios possible to be placed in front of the public – on the basis that if you don't come up with an exit plan, the opposition will pick the worst one for you.

How telling it was, therefore, that the Treasury's latest dollop of "Project Fear" on Monday, quite rightly explained why neither a "Canada-style" trade deal nor the WTO option would work (let alone some illusory one-off UK-EU trade deal which would take far too long to negotiate).

God knows how many times we've written on the flaws of these options, but nothing has any effect on Vote Leave. It is there that you see the obduracy of the SW1 claque that has been so apparent in its dealings with the Treasury Select Committee. Simply, they know best, and will not be told. There is no debate – not the slightest discussion. The word is handed down from on high, and that (as far as they are concerned) is the end of it.

Nevertheless, given such a perfect canvas on which to play, it is entirely understandable that George Osborne's civil servants didn't even need to consider the one option they most feared, joining Norway in the EEA. Vote Leave had already turned it down. At least the Institute for Fiscal Studies conceded that it would be much less costly than any other option suggested, but that soared above the heads of Vote Leave, as they sought to rubbish the Institute.

So, given a free pass by Vote Leave, "Project Fear" rolls triumphantly on, with the official leave campaign having given the game away before it started.

All that is left to the rest of us is to vote on 23 June for what might have been, in the knowledge that Mr Cameron has been allowed to get away with fighting this campaign so dishonestly that the core problem will in no sense have been resolved.

We shall, concludes Booker, remain just as resentful of being ruled by our weirdly dysfunctional EU system of government as we were before Cameron sought to bamboozle us by setting this cynical little charade on its way.



Richard North 29/05/2016 link

EU Referendum: "deeply problematical"

Saturday 28 May 2016  



The long-awaited Treasury Select Committee report has finally arrived, with a helpful press release on its website.

Responding to his own report, chairman Andrew Tyrie complains of "the arms race of ever more lurid claims and counter-claims made by both the leave and remain sides". This, he says, "is not just confusing the public. It is impoverishing political debate". He calls for an "amnesty on misleading, and at times bogus, claims", noting that the public are thoroughly fed up with them and "the public are right".

Both sides get a share of stick, but anyone who has followed the proceedings closely will know that Mr Tyrie has been particularly irritated with the machinations of Vote Leave, and its treatment of what he now describes as its "bogus" claim that we send £350 million a week to Brussels.

To the BBC Radio 4's World at One, Tyrie declared that that Vote Leave's £350 million claim was "by far the most serious claim out there" which was "simply not true". "There is no such sum that crosses the UK exchanges", he said. "A much smaller sum crosses, and then a lot of that money comes back as EU spending subsequently. A more reliable figure would probably be £100 million per week". Asked what Vote Leave should do about its battle bus, he replied: "Repaint it immediately".

Within the report, the Committee notes that Vote Leave regards the £350 million figure as "the core number" and is using it "again and again". It thus finds that it "very unfortunate that they have chosen to place this figure at the heart of their campaign". This has been done, they say, "in the face of overwhelming evidence, including that of the Chair of the UK Statistics Authority, demonstrating that it is misleading".

"Without qualification this is unavoidable", they add. "Brexit will not result in a £350 million per week fiscal windfall to the Exchequer as a consequence of ending the UK's contributions to the EU budget".

But what marks out Vote Leave's action as particularly reprehensible is that, despite having been presented with the evidence contradicting its claim, the organisation has subsequently placed the £350 million figure on its campaign bus, and on much of its recent campaign literature.

In what amounts to an unprecedented action on the part of a Select Committee speaking of a campaigning organisation in the throes of its campaign, it says: "The public should discount this claim". It tells us: "Vote Leave's persistence with it is deeply problematic. It sits very awkwardly with its promises to the Electoral Commission to work in a spirit that reflects its 'very significant responsibility' and the 'gravity of the choice facing the British people'".

What further confounds this whole issue is that, in defending their use of the £350 million figure, both Dominic Cummings and Matthew Elliott made reference in their own oral evidence to the Chancellor's evidence to the Treasury Committee on 17 December 2014. In this, he claimed that the rebate was subject to "negotiation" and (elsewhere) "discussion" with the European Commission.

In Elliott's oral evidence he talks about the Chancellor claiming that the rebate was not set in stone. Elliott read a quotation from the Chancellor, where he said: "It is not a unilateral decision of the British Treasury or the British Government to just say, 'This is our rebate. We are entitled to it. Pay up'. The way this works and has always worked is there is a negotiation with the European Commission"

On the basis of this highly selective and tendentious quote, Elliott is comfortable asserting that the rebate "isn't a figure set in stone that we are guaranteed to get back". With no more evidence than just this one quote, he then asserts that the rebate is subject to a negotiation with the European Commission.

At the time, though, the Committee had concluded that the Chancellor had exaggerated the extent of ambiguity surrounding the rebate. His was a political stance to support his claim that the Government had, through its negotiations at the Economic and Financial Affairs Council, "halved" a demand for a €2.1 billion additional contribution to the EU budget.

In actuality, Osborne had been game-playing, so much so that the Committee had strongly criticised him, concluding that his claim was "not supported by the facts". It noted that the calculation of the rebate, and the circumstances in which it applies, were "embedded in EU law", something to be found in the very report from which Elliott (and Cummings) had so selectively quoted.

Rehearsing more or less the same detail we go through, the Committee had referred to Council Decision 2007/436/EC and the supporting Council documents on the UK correction. Their argument is very slightly marred by the fact that this Decision has been repealed by 2014/335/EU, but since the provisions are essentially re-enacted, the distinction is academic.

The Committee are right in asserting that these documents establish the precise method for calculating the rebate. They also provide for past rebates to be adjusted in response to GNI data revisions, such as those which prompted the rebate's revaluation.

The crucial point made, though, completely contradicts Vote Leave's assertion, as the Committee says that "the Commission did not at any stage suggest to HM Treasury that the rebate would not apply". Nor, it says, "could it have disapplied the rebate, which forms part of the Own Resources Decision that governs the financing of the EU Budget, and can only be altered with the unanimous agreement of Member States".

Yet we still get Vote Leave arguing the toss, making the utterly bizarre claim that the rebate is "a discretionary grant which the European commission can pay to the UK if it so chooses", making the completely false claim that: "There is no obligation on the commission to pay it". On this basis, it claims it is justified in including the rebate it is clawback calculations - even though the money is not sent to Brussels.

The result has been excoriating (and completely justified) criticism from a Select Committee. Yet the obdurate Elliott refuses to admit error. Still he tries to defend his position. "We do get some of that money back", he says, "but we don't get to control how much of it is spent – that is one of the main arguments for voting leave". Adding: "We think it's safer to take back control and better spend our money on our priorities", he thus ignores completely the point that the rebate is a deduction as of right, over which we have complete control.

Vote Leave's obduracy is is why this issue isn't going away. If they admitted error, we could move on. But despite everything, we have their spokesmen arguing black is white, while their apologists look on with approval. Bizarrely, they are refusing to accept any hint of error, rejecting the clearest of evidence that they are absolutely and completely wrong.

Nor is this by any means their only flaw. The Committee also finds that it is misleading for both Vote Leave and Leave.eu to claim that £600 million a week, or £33.3 billion a year, could be saved by not having to comply with EU regulations.

"To persist with such a claim is a tendentious representation of the research on which it is based", says the report, which quotes £12.8 billion a year as a more plausible figure for the maximum regulatory savings from a potential Brexit. And even that is highly debatable – an issue to which we will return.

And on yet another matter, the Committee argues that: "It is disingenuous to claim with any confidence, as some representatives from the 'leave' campaign groups have done, that the UK would be able to leave the EU, drop free movement and continue to have the same rights to trade with EU Member States as it does now". To this also, we must return.

For the rest, we can accept that the "remains" are getting things wrong as well - badly wrong. And it is clearly the case that Cameron himself is not telling the truth about his so-called reform "treaty" - something which the Committee does not address. By contrast, we have been among the first to call him an unprincipled liar.

But to suggest equality of arms is completely to miss the point. We expect the other side to lie - that's what Europhiles do. That's why we wrote a book called The Great Deception. When they do, it gives us powerful ammunition with which to challenge them. But, to do so, we need a "Caesar's wife" for our own campaign – an organisation that is above reproach and can occupy the moral high ground.

Instead, we have Vote Leave, effectively lying through its teeth. And when it is caught out, its spokesmen brazenly defy criticism from all quarters, persisting with something which is clearly and demonstrably wrong. And if Vote Leave (as it does) it argues that it benefits from the controversy, it is wrong. All it is doing is destroying the credibility of the entire "leave" campaign.

At a personal level, Elliott, Cummings and his motley crew typify the arrogant "Tory Boy" tendency that has hijacked the "leave" campaign. It is a group that thinks it knows everything, despite making basic errors, and is utterly contemptuous of anyone who disagrees with them.

These are the people with whom I had attempted to negotiate the adoption of Flexcit. You can see quite why I have not have had any success. These arrogant "leaders of men" promote only their own opinions. Anything from outside their "bubble" is treated with disdain, and a practised contempt that in a less restrained society would invite actual bodily harm.

Although some want us to work with these people, this is impossible. There is no dealing with them, no compromise and no middle way. Imbued with the insolence of the SW1 "master race", they treat us as serfs. Our job is to shut up and do as we are told. We cannot work with such people. No one can.

Now Tyrie has experienced this insufferable arrogance, and it is clear that he doesn't like it. But we've been putting up with it for years, alongside the slander that somehow, it is me at fault, and that I am "difficult" to work with.

For all their pretensions, these people are the dregs, and the sooner they are cleared out the better. We are going nowhere as long as they are in a position to spread their poison and their malign stupidity. If we achieve nothing else from this referendum campaign, it must be that - a cleaning out of the stables.



Richard North 28/05/2016 link

EU Referendum: to perpetuate a lie

Friday 27 May 2016  



Despite numerous and constant pleas, even from high-ranking MPs and donors, to remove or tone done the false claim on the £350 million weekly payments to Brussels, the Vote Leave brass have been unmoving in their obduracy, sticking to the figure like excrement to the virtual blanket.

With complaints flooding in about how the organisation is failing to service grass root campaigners, we now begin to see why there is such a determination to perpetrate the lie, with the emergence of the final phase of the Vote Leave campaign.

The campaign, under the direction of Dominic Cummings, is offering a £50 million prize to anyone who can predict the result of every game at Euro 2016 – with a £50,000 consolation prize to the closest punter, in the event that no one wins.

To frame the competition, Cummings is quoted as saying: "Every day we spend at least £50 million on the EU - that's £350 million a week which is enough to build an NHS hospital".

He adds: "We want as many people as possible to know that we are sending life hanging sums to the EU every single day so we're giving them a chance to win it. It's a bigger prize than any one person has ever won on the national lottery".

However, with the chances of winning being put at eight billion to one, Vote Leave's money is pretty safe, and the consolation prize cost is seen as good value for what is in effect a high volume data mining exercise.

Organisers hope that, by enticing people onto their site in exchange for an e-mail, a valid phone number and full residential address, they will be able to build a unique database which can be used in the last weeks of the campaign. Effectively, though, the whole campaign is being reduced to a reliance on a single factoid, itself a demonstrable lie, in order to pave the way for last-minute mailshots, telephone canvassing and electronic communications.

The tactic, though, reactivates suspicions that Matthew Elliott and his business associates are using the "leave" campaign as a commercial opportunity to capture data which they can then launder through offshore companies, and sell to political and other groups.

Certainly, it means that the campaign is now even more closely dependent on a demonstrable lie, the essence of which is made abundantly clear by Council Regulation (EU) 609/2014 (see Article 10).

This makes it clear that Member States are required to remit contributions to Brussels monthly, with one twelfth of the overall sum due sent on the first day of each month, "taking into account the … the correction granted to the United Kingdom for budgetary imbalances". Specifically, "Corrections… shall be added to or subtracted from the total amount of established entitlements".

With the legal base of the rebate fully protected, it cannot be changed without the agreement of the UK and the unanimous assent of the Council. This means there is not the slightest justification for claiming that the UK sends £350 million a week (of £50 million a day) to Brussels. It doesn't, and to claim so is not "misleading". It is a straight lie.

This is certainly a new style of campaigning, to base the core message – and now the entire strategy – on perpetrating a lie, but then this can hardly be surprising for campaign which is using a serial liar for its lead spokesman.

To my view, though, it is not and never can be good (or acceptable) strategy to rely on a deliberate lie. And this is what Vote Leave is doing, perpetuating its existing lie. Such a stance cannot be endorsed, and its latest stunt is simply unacceptable.



Richard North 27/05/2016 link

EU Referendum: procurement - a WTO agreement

Friday 27 May 2016  



On the Vote Leave grid yesterday was another of those "bent-banana" style of shock-horror-probe "revelations", concerning the cost of EU laws, this time "foolish" EU procurement rules, obligingly given space by the Guardian and the BBC.

The rules are something of an obsession of Dominic Cummings and he has been keen to see them in the frame. Thus, Vote Leave is telling us that they are costing UK taxpayers of £1.6 billion a year - which, of course, could be better spent on "new hospitals and flood defences".

The claims are published online, referring to Directive 2014/24/EU, approved after a 2011 White Paper COM(2011) 896 final. The current Directive, which came into force on 18 April, builds on the experience of the 2004 Directive, simplifying and redefining procedures to make them more user-friendly.

The cost is supposedly based on a 2011 study for the European Commission, which is said to have estimated the cost of (EU) procurement legislation at 0.7 percent of the total value of spending on procurement in the UK.

There are, in fact, several studies in 2011, but Vote Leave links to this one from PWC. Interestingly, this does not offer a 0.7 percent figure as an increased cost. What it does tell us is that the (average) cost of public procurement in Europe is estimated at about 1.4 percent of purchasing volume and that the total UK cost is 0.7 percent (see figure 2.15).

Crucially - and a point missed entirely by Vote Leave - the report warns that these costs are not fully attributable to the procurement directives. "All costs are captured whether or not they are direct results of obligations from the directives. Procurement costs include business as usual costs that would be incurred even in a world with no EU-wide procurement legislation", it says.

This much we have no problem in understanding. With or without EU intervention, public procurement always carries a cost. UK defence procurement, for instance, costs £1.3 billion annually (around four percent of the budget), where EU involvement is minimal.

However, there was another 2011 report - this one - which refers to yet another report, this one by Europe Economics. In this you will also find a reference to a 0.7 percent cost (as an EU-wide figure), representing an EU-wide increase attributable to the procurement Directives. But it also states that overall the administrative costs for awarding authorities have gone up by 20-40 percent (on average by 35 percent). The would only put the overall UK cost increase, as a percentage of spending at 0.25 percent, as opposed to the 0.7 that Vote Leave claims.

Furthermore, there is also an interesting conclusion that is not mentioned by Vote Leave. As a result of the tendering process, this report says, overall prices of goods and services purchased were 2.5 percent lower than they would otherwise have been. If this is representative of the UK situation, the Directives would actually deliver net annual savings of about £4 billion to the UK taxpayer. These could actually be higher, as Commission modelling in 2009 indicated that savings of 5.5 percent were possible (see p.147).

Cost issues are is further elaborated by another Commission report, which stated (p.19):
The total cost to society of procuring the goods and services covered by the Directives is estimated at around €5.26 billion per year (for the EEA-30 in 2009), which is less than 1.3% of the value of invitations to tender published (by the EU-27) in the same period (i.e. €420 billion). This estimate covers the whole cost incurred during the entire procurement process i.e. from the pre-award phase, through the preparation of offers by all participating bidders, the selection of a successful bidder, and including any costs of litigation. Much of this cost would be incurred whether the Directives were in place or not.

As a result, this global figure would not reduce to zero if the Directives were repealed. Procurement carried out below EU thresholds, as well as private procurement, has associated costs. In fact, the additional cost imposed by provisions of the Directives is likely to be relatively limited, as has been pointed out in an earlier evaluation of the public procurement Directives carried out in 2006. That evaluation put the additional cost of the compliance with the EU Directives compared to national/below-threshold procurement at 0.2% of total contract value for public purchasers, and a further 0.2% for suppliers – or approximately €1.68 billion in 2009.
This much emerges from a proper evaluation of available data - leaving us with a scenario where Vote Leave substantially exaggerates the cost of the Directive and ignores the benefits. But it wasn't just this work that brought me into the fray. For some days, I had already been working on an article about public procurement, specifically to reassure readers that the Directives would not be affected by Brexit.

The point here is that the opening up of public procurement is seen as advantageous to a considerable section of British business – and is a vital step if we are to build on our knowledge economy and develop service industries internationally. It is also considered an important way of increasing the efficiency of public spending.

Crucially, though - and this was what caught my interest - opening up public procurement does not stem primarily from the EU. It relies on the WTO 1994 Agreement on Government Procurement, which is reckoned to have opened up procurement activities worth an estimated US$ 1.7 trillion annually to international competition. It was this that led to an EU White Paper in 1996, and has driven progress ever since.

Interestingly the Agreement has not only been behind intra-Community legislation but also an agreement with Switzerland, liberalising respective public procurement markets, and with the United States. It has also filtered into third country deals.

Such is the importance of this market liberalisation that we saw recently an article in the trade magazine Supply Chain, dealing with the potential effects of Brexit on public sector procurement. Fortunately, in a refreshing change from the usual FUD, the author reassured readers that UK legislation had been put in place to deliver the benefits of the EU Directives, and "would continue to have an effect".

In the article, the belief was expressed that the Government was unlikely to reverse EU based procurement laws, which had "firm principles aimed at transparency, equal treatment, open competition, and sound procedural management".

And indeed that is likely to be the case, and specifically because this is another example of the UK implementing via the EU an international agreement that would remain in force even after the UK has left the EU.

Given the apparent advantages of the Agreement, and its potential, it would appear that the very last thing a "leave" campaign needs to be doing is claiming that the procurement Directives (or their UK implementing legislation) will be abolished.

One wonders why, then, that the two most enthusiastic media publishers of the Vote Leave claims have been the BBC and the Guardian, giving chief executive, Matthew Elliott the opportunity to tell us: "Pernicious interference from Brussels not only stifles business, it makes government more bureaucratic and less responsive".

Perhaps, before this totally undermines the reassurances in Supply Chain, someone will tell Elliott that this "pernicious interference" is actually implementing a WTO agreement, and is saving us money – with the prospect of creating more business for UK Plc.



Richard North 27/05/2016 link

EU Referendum: making the difference

Thursday 26 May 2016  



Allister Heath has been writing in the Telgraph of the difficulty the "leave" campaign is having in articulating a strong macroeconomic case for Brexit. This, he says, is becoming a major issue, especially for more prosperous, middle-class, centrist and Tory-leaning voters in London and across the country who are craving reassurance that it's safe to vote for Brexit. 

Many Telegraph readers fall into this camp; and we all have friends, relatives and neighbours who are vacillating, wondering whether maybe – just maybe – there may be some truth to the endless supply of screaming, hysterical anti-Brexit reports.

The core assumption of the anti-Brexit economists, Heath tells us, is that leaving would erect damaging barriers to trade; the pro-Brexit side must take on and demolish these arguments.

The good news, he says, is that it’s quite easy to do so. The Leave campaign's long-term aim is to break away completely from the EU. But there is no doubt that, were we to vote Leave on June 23, the UK would seek to adopt, as an interim solution, a Norwegian-style relationship with the EU which ensures that we remain in the single market, giving us plenty of time to work out new arrangements with the rest of the world.

Welcome to Phase One of Flexcit, one might say, and doubly welcome to a journalist who is prepared to write that this "is both the only realistic way we would quit the EU – the only model, that, plausibly, MPs would support as a cross-party compromise deal – and the best possible way for us to do it".

Says Heath, the Norwegians would welcome us with open arms, as their own influence would be enhanced, and other EU nations would seek to join us. Such a deal would eliminate most of the costs of leaving, while delivering a hefty dose of benefits as a down payment.

As part of the EEA, via the European Free Trade Association, we would remain in the Single Market, complete with its Four Freedoms, while withdrawing from agricultural and fisheries policies, justice and home affairs and the customs union.

The City wouldn't lose access and virtually all of the anti-Brexit scare stories would be neutralised, which is presumably why that option was mysteriously absent from the Treasury's ludicrous analysis of the short-term impact of Brexit.

Furthermore, this option would make us more, rather than less, influential. We have only a small share of the votes in Brussels and can thus easily be outvoted. But Norway, which has technically no votes, has regularly moulded key rules, including the Consumer Rights Directive.

The real reason why we – as a large and powerful economy – would have greater influence is that Brussels is increasingly not the place where big decisions take place. Rules are increasingly negotiated under the auspices of global bodies: automotive norms are determined by the World Forum for the Harmonisation of Vehicle Regulations; food standards are determined by Codex Alimentarius; shipping rules are under the aegis of the International Maritime Organisation; and the crucial new banking regulations are being determined by the Financial Stability Board.

These regulations are then passed down, with the odd gold-plating, by the EU. These global bodies proceed by consensus, not qualified majority; we are currently represented by the EU at these meetings. A Brexit would allow us to have a seat at these top tables, and thus to disintermediate Brussels.

Thus, concludes Heath, the economic case for Brexit is remarkably strong. If Brexiteers want to reassure floating middle class voters, it will need to be made again and again, loudly and clearly, over the next four weeks.

That is the bad news. The bones of this scenario have been around since April 2014 – a full two years – with 70,000 people having downloaded the full version. Now, with four weeks to go, we are getting an outline of the first of the six phases in a national newspaper – without the plan being named, of course.

We already know that this is "the only realistic way we would quit the EU" and "the best possible way for us to do it", but it is good to have that confirmation from Mr Heath.

But we knew that a year ago when we sent a copy to Dominic Cummings, and we knew that when we later gave a copy to Arron Banks. Both were in a position to promote "the best possible way" of leaving the EU. Even earlier, back in April 2014, Nigel Lawson who chaired the IEA "Brexit Prize" judging panel could have made the difference. But he didn't either.

So, with four weeks to go, there are hundreds of thousands of "middle-class, centrist and Tory-leaning voters in London and across the country who are craving reassurance that it's safe to vote for Brexit" – exactly the target group that we need to win over in order to succeed in this referendum. And there is insufficient time to get the message to them.

For want of that essential "reassurance", God knows how many votes we will lose. And that will make the difference.



Richard North 26/05/2016 link

EU Referendum: the wages of stupidity

Thursday 26 May 2016  



One can fully understand the sharp reaction of Vote Leave to the publication of the Institute of Fiscal Studies' report on "Brexit and the UK's public finances". For in that report is written two passages which identify clearly why their campaign has failed to dominate the economic arguments, neutralising them as contentious issues and taking them out of the fray.

Firstly, we see the Institute write that the more we can replicate current access to the single market – for example, by membership of the EEA – the lower the cost of exit will be. By contrast, it says, the further we move from that model – for example, relying on World Trade Organisation (WTO) rules – the greater the cost.

Then, as we highlight in the graphic above, we see it observe that: "Key Brexit campaigners seem to have ruled out any deal that would involve membership of the European Economic Area (EEA), like Norway".

This, of course, was the whole point of Flexcit, one about which we almost weary of writing. But the simple fact is that, to protect the UK's economic position in the first instance, we had to preserve our participation in the Single Market. And here we see the IFS confirm what we've now been writing about for several years.

However, the problem came in October last year when Cameron flew to Iceland specifically to diss the "Norway model". Despite its attractions, we had the idiotic Dominic Cummings agree with the Prime Minister, sternly declaring: "Vote Leave does not support the 'Norway option' for Britain". After we vote leave, he said, "we will negotiate a new UK-EU deal based on free trade and friendly cooperation. We will end the supremacy of EU law".

When Farage joined in, saying "I don't want a Norwegian deal", followed by Richard Tice of Leave.eu, Douglas Carswell and then John Redwood and Ruth Lea, Cameron had achieved a clean sweep of the noisemakers, and effectively taken the "Norway option" out of the game.

The IFS suggests that part of the reason for these "leavers" rejecting the option was because the UK would likely have to make a significant contribution to the EU budget, but it was as much the case that it would also require continuation of freedom of movement – something to which Farage, in particular, was opposed.

With that, though, the main campaigners are determined to proceed without a plan and cede the economic argument – with Vote Leave relying on the offset from the EU contributions, claiming to save £350 million a week from the EU budget contribution.

This pretention, though, is badly damaged by the IFS, which reminds us that this figure is ignoring the rebate, which "is clearly inappropriate". It is equivalent, says the Institute, "to suggesting that were the UK to leave the EU and not make any financial contribution to the EU’s budget then remaining EU members would continue to pay the rebate to the UK". With brutal simplicity, it concludes: "That is clearly absurd".

Yet, still the Muppets in Vote Leave don't get it. In a bizarre press statement they claim that the rebate is "a discretionary grant which the European commission can pay to the UK if it so chooses". The organisation adds that: "There is no obligation on the commission to pay it", and then seeks sustenance by citing out of context a remark by George Osborne at the Treasure Select Committee (see para 15) – a remark which in itself was disputed.

So totally without foundation are their claims that there is no easy way to describe such crass ignorance. Originally agreed by Margaret Thatcher as the Fontainebleau Abatement in 1984, the rebate relies for its legal base of Articles 311 and 312 of the TFEU and is firmly locked into EU law. It is not in any way a discretionary matter.

It is now firmly entrenched in the budgetary system, having in 2004 become the Generalised Correction Mechanism for all Member States, after a Commission Proposal (COM(2004) 501 final/2).  Currently, it is given force by Council Decision 2014/335/EU "on the system of own resources of the European Union", implementing the European Council decision of 7-8 February 2013. This concluded that the then existing correction mechanism in favour of the United Kingdom was to continue to apply.

This Decision is augmented by Council Regulation (EU) No 608/2014 of 26 May 2014 "laying down implementing measures for the system of own resources of the European Union", and by Council Regulation (EU) No 609/2014 also of 26 May 2014 "on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements" (Recast).

Vote Leave, however, have got themselves into a typical bind, trying to defend the indefensible because one of their "stars" is committed to an error and cannot row back from it - as we had with Johnson and his three-fingered banana clusters.

In this case, we have Dominic Cummings who is insisting on using the £350 million figure, come what may - even after having been challenged on it during his session with the Treasury Select Committee. Presumably on the basis that there is no such thing as bad publicity, he believes that the controversy plays into Vote Leave's hands. Despite that, almost everyone around him is telling him that the false claim just detracts from the argument. It is certainly giving the BBC endless opportunities to point out the error.

Such is the notoriety of the £350 million claim that it has even spread to the New York Times giving an international dimension to Vote Leave's stupidity, further degrading the credibility of the leave campaign. And with nowhere else to go, Vote Leave supporters are reduced to whingeing on the sidelines, having already destroyed the best and only counter to the IFS report.

Thus will they find in good time that the wages of stupidity are defeat.



Richard North 26/05/2016 link

EU Referendum: the lack of a plan

Wednesday 25 May 2016  



The multiple references in this piece by Asa Bennett to an opinion poll from ORB must be taken with a pinch of salt. All and any opinion polls must be treated with caution. Nevertheless, they cannot be ignored entirely, and this one from ORB seems to show the direction of travel, with the "remains" pulling further ahead of "leave". Their lead now stands at 13 points.

On the back of this poll, Bennett has picked up exactly the same vibes that we have explored in our report, only he personalises it by telling us that Brexiteers are on the receiving end of Mr Osborne's offensive, with Messrs Balls and Cable deployed yet again and the Treasury releasing its second report on why it thinks leaving the EU isn't a good idea.

Such tactics, Bennett thinks, seem to be working. The "remains" are continuing to dominate the economic battle in the referendum campaign, a crucial element for – as we have always maintained – the polls are suggesting that there are bigger issue than immigration.

When voters were asked by ORB which side would create a "stronger economy for the UK", the "remains" lead by 21 points with 54 percent, a four-point increase in their net lead since last week, the same boost for "remain's" lead on the question of who will "create more jobs".

Bennett asked how the "outers" can fight back. But the alarming truth is that they probably can't. To win this referendum, we had to get in first and pre-empt the scare tactics, laying a solid base of reassurance. Thus, the moment Dominic Cummings, for no good reason, rejected the idea of an exit plan, the leave campaign's fate was probably sealed.

We might possibly have been able to claw back from this huge error if Arron Banks had been a man of his word, and backed Flexcit as he said he would. He would also have had to have been successful in seeking lead designation for the "leave" proposition. He was our last chance, and he failed.

For an excellent review of where we could have been, Andrew Stuttaford's article in National Review is the place to be, especially as he makes the point that we have been pursuing the idea of an exit plan for years, only to have been ignored for several and different reasons.

Asa Bennett helps by making it clear that Vote Leave's refusal to adopt and exit plan – any exit plan – was never personal. This was a function of the flawed logic and ignorance of Dominic Cummings, the progenitor of a failed strategy – and also the craven response of the people around Cummings who never had the courage to rein him in.

The result has been a train-wreck campaign. Homing in on putative savings from leaving the EU was never going to be a credible strategy – and less so when the core claim was a clear and demonstrable lie, that we could save £350 million a week.

Under questioning from the Treasury Select Committee, Cummings sought to justify this position by claiming that there would be additional savings from the bonfire of regulation that would accompany Brexit. Yet he was unable to offer a credible figure, or be at all specific as to what regulations he would repeal.

Then, when he and his sock-puppet Michael Gove – together with the leering, buffoon Johnson – rejected any idea of continuing in the Single Market, there was no longer any doubt. Our fate was sealed. Watching the first of Vote Leave's referendum addresses did nothing else but confirm the paucity of their vision – distilling the greatest constitutional issue of our time down to the length an elderly relative might have to wait in Accident and Emergency.

With this level of campaigning, there is little Vote Leave can achieve. However, Bennett has it that one option left is to fulminate about the "scaremongering" from their opponents.

But, he notes – as do we – that the latest Treasury analysis looks at two models for their short-term impact assessment of Brexit. The first one is the model set out by Canada (which they say would result in an economic "shock"), and the other one relies on World Trade Organisation rules (which they think would lead to a "severe shock").

The Treasury decided not to look at the option of Britain following the "Norway option", joining the European Economic Area, despite doing so in their previous report on the long-term impact of Brexit. But then, this is precisely the option that Vote Leave have rejected. They can hardly complain that the Treasury hasn't modelled it.

Now, says Bennett, Brexiteers need an agreed plan in order to show Britons why the experts are "scare-mongering", and they need to be plugging it relentlessly over the next few weeks if voters are to be aware of it by 23 June.

For the moment, though. while they complain of how unfair the Chancellor is being, Bennett concludes in exactly the same way that we did, that Osborne's tactics were inevitable, and are working as voters are starting to drift away. The "outers" (as in Vote Leave) have no idea what they want, and they're giving them no reason to think otherwise.

There is not the slightest chance, however, that Vote Leave will admit to error, or change tack. This is simply not in their make-up, while craven sponsors and close supporters lack the fortitude or insight to force the issues. The "Titanic" is being driven onto the iceberg at full speed and there's nothing that can stop it.

What price a campaign when one of its most prestigious spokespersons, Sarah Wollaston disowns the core message, saying she would be refusing to hand out their "deliberately misleading" NHS leaflet.

When we then see even Katie Hopkins savage the ghastly Johnson as a "big, fat fraud", we know the game is over. In fact, Johnson the serial liar is only a symptom of the greater malaise. Driven to destruction by Cummings and his friends, the official campaign never had the slightest chance of success.

If the Brexit side does lose, says Hopkins, "much of the blame will lie with Boris - who will have no compunction about scampering back aboard the government bus if he gets half a chance". But the greater blame will belong to Dominic Cummings, with the likes of Arron Banks also occupying a prominent position in the hall of shame.

The only possible thing we can salvage from this wreckage is a clear understanding of where we went wrong, and why – and to out the guilty men (and women). At least then, the next time round we might be better prepared. And there will be a next time. This referendum will resolve nothing. The boil still has to be lanced.



Richard North 25/05/2016 link

EU Referendum: the deregulation delusion

Tuesday 24 May 2016  



The one thing that is being utterly destroyed by this referendum campaign is the idea that it is possible to have a grown-up political debate in this country. Certainly, any adult not already of that mind, and happening accidentally on the cretinous Mr Johnson in full flight, would come to that conclusion – as even his co-campaigners admit that their champion is something of a "mixed blessing".

Actually, that is the kindest of all possible constructions one can put on the activities of this walking embarrassment – a man who actually makes you feel ashamed to be associated with the leave campaign.

Again we see reported another self-indulgent rant on EU regulation, again bringing in bananas – alongside hairdryers and vacuum cleaners – but with puerile truculence as he attempted to justify his earlier errors in typical Johnsonian fashion, by refusing to accept that he'd got anything wrong.

Last week he was roundly mocked for wrongly claiming that EU law prohibited bananas from being sold in clusters "of more than two or three bananas". But yesterday, addressing a crowd in York, the cretin reminded his audience that he had said "there was an EU directive on bananas", but then claimed that "the Remain campaign got very angry - they said that I was wrong".

This, of course, is deliberately to evade the point. No one at the time disputed the existence of EU law on the matter (even if Paxman and Richard Corbett were later to claim the marketing standard had been repealed). The issue was that Johnson had got the detail wrong – not least the fact that the law had no domestic application.

The key point, though, is made by pro-Brexit Labour donor John Mills who – as one of the very few duty grown-ups - said Johnson was being "unrealistic". "I think we are over-regulated", he told the Mail, "but the idea that all these regulations are going to disappear on the 24th of June is frankly unrealistic and you might be able to unpick some of them but I don't think there's going to be a bonfire".

This is actually a sensible comment, so much so that a grown-up campaign with anything approaching message discipline would keep the lid on Johnson and make sure that only the grown-ups were heard.

The best Mills can do, though, is admit that Johnson's style of campaigning has drawbacks, and observe: "Boris is Boris, I mean he's a plus and a minus to be honest, I think he's in that sort of category", adding: "Boris has always had a bit of a tendency to go off piste but he does it in a half-loveable way and he's a mixed blessing".

Quite how "mixed" is that "blessing" is indicated by an article in the Financial Times headed: "The deregulation delusion" in which, once stripped of the obligatory pro-EU propaganda, actually attempts an adult discussion on regulation.

The whole debate, says Martin Sandbu, is marred by a lack of critical thinking around how regulation affects the economy, in which event, "to treat regulations axiomatically as costs to doing businesses is bit like treating traffic rules axiomatically as costs of driving".

"There is, to be very generous", he says, "a sense in which traffic rules impose a bit of effort on drivers. And it is certainly true that bad traffic rules can make traffic slow and unsafe. But it is just as certain that all but the worst rules are better than no rules at all".

In economic terms, Sandbu tells us, there are three broad reasons why this is so, both for traffic and for the economy: information, externalities and co-ordination.

On the road, street markings, signs and costly requirements to keep the surface at a certain standard help you predict the driving conditions and the behaviour of other drivers. The importance of information in economics should be just as easy to grasp: a lack of knowledge about the good or service you are considering buying is akin to a transaction cost. Imperfect information can even make markets break down altogether.

Thus Sandbu asserts, far from being costs to doing business, regulations that improve buyers' ability to know what they are paying for - labelling requirements and minimum standards - facilitate market transactions. And that explains why regulation has grown and why efficient economies will continue to regulate activity comprehensively.

The second point, "externalities", should also be straightforward. There are limits on how you can drive because your reckless driving can harm others. Similarly, there are prohibitions on how and what businesses can do. Some of those have to do with protecting their workers and if improving work conditions leads to greater wellbeing of workers, then the "cost to business" of doing so overestimates the cost to the economy.

Besides, says Sandbu, there are reasons to think some worker protections, including higher minimum wages and other rules that make labour costlier for employers, can improve productivity.

Finally, we have "co-ordination". Why require cars to drive on a specific side of the street? Because the benefits to all of co-ordinating on right or left vastly outweighs any difference in the merit of which particular rule is chosen. And this is hugely relevant to the Brexit debate.

Sandbu recalls his colleague Philip Stephens who regaled readers a few years ago with the tale of the British dust-up over a European noise limit on lawnmowers.

The supposed Brussels over-reach had, it turned out, been instigated and steered through the legislative process by the British government at the behest of UK manufacturers, who were finding their lawnmowers locked out of the German market because of Berlin’s national noise rules. "Sure enough, the new, Europe-wide, decibel ceiling put the British producers back in the game".

None of this, says Sandbu, shows that any particular European (or indeed British) regulation is fit for purposes. But it does three things.

First, that an efficient economy will be a comprehensively well-regulated one, not an unregulated one. Second, therefore, that a post-Brexit UK economy would not be less regulated than today, any more than other non-EU economies have remained radically unregulated: just look at the US. Finally, that positing freer trade as an alternative to common regulation is to deeply misunderstand the complexity of modern economic activity, and therefore of trade.

The reason why empirical estimates show Europe's single market to boost trade so much more than simple free trade deals, and why modern free trade deals are really about harmonised regulation, is that common rules are increasingly a prerequisite for efficient trade.

Sandbu thereby concludes that, to be open to international trade today means to be willing to make rules together. That is the fundamental contradiction at the heart of the case for Brexit. Rather than a cost of doing business, good rules make it possible.

And there, exposed for those who are willing to see it, is the utter fatuity of Boris Johnson – this vain, stupid, shallow man who is doing such enormous damage to the cause, turning away anyone who does not want to buy into dog-whistle euroscepticism.

The ultimate irony, of course, is that Sandbu makes the case for Brexit. Common rules, he says, are increasingly a prerequisite for efficient trade. And what is good for 28 Member States of the European Union is even better of the 185 or so states in the global trading system. To get the greatest benefit from the economies of scale, we need to break out of "little Europe" and re-engage at a global level.

This is the point I made on Sunday, and an extremely powerful point it is. But as long as Vote Leave are committed a "deregulation" agenda, we simply cannot progress.

And that is the wider truth. A campaign obsessed with bleating about the NHS - and the facile claim of saving £350 million a week - is going nowhere. We are being dragged down to the lowest common denominator, with the leering buffoon Johnson destroying our efforts to be taken seriously.

The greater delusion, therefore, is that there is any room left in political campaigning for grown-ups. At the moment, this does not look to be the case.



Richard North 24/05/2016 link

EU Referendum: in the absence of a plan

Monday 23 May 2016  



The whole point of having an exit plan was to pre-empt attempts by the government to project leaving the EU as a risky option. Crucially, we had to get in first, demonstrating to people that the exit could be ordered and safe, with no significant economic impact.

This is exactly what Flexcit did, and it was freely offered to Dominic Cummings for use by Vote Leave, precisely to head off the scaremongering (FUD) which we knew was to come. Yet, as we all know, Cummings didn't even have the courtesy to respond to me.

And now we have, exactly as we predicted three years ago, a reliance on FUD, with the government cynically exploiting concerns about the economy, exactly as we predicted in July 2014, when we warned of the need to pre-empt it.

With those warnings unheeded, the official "leave" campaign has paved the way for today's Treasury analysis which, accompanied by a lurid graphic (above), tells us:
A vote to leave would cause a profound economic shock creating instability and uncertainty which would be compounded by the complex and interdependent negotiations that would follow. The central conclusion of the analysis is that the effect of this profound shock would be to push the UK into recession and lead to a sharp rise in unemployment.
Two scenarios have been modelled to provide analysis of the adverse impact on the economy. These deliver a "shock" to the economy or a "severe shock". You can take your pick, but what you cannot do is pick the Flexcit scenario. Even Ed Conway of Sky News notices its absence.

But then the Treasury's game is to capitalise on the uncertainty which would necessarily follow from any of the post-exit scenarios proposed by Vote Leave. The moment this organisation rejected the "Norway option" (as did Leave.eu) and then had Cummings and Gove both specifically reject continued participation in the Single Market, they paved the way for today's scare. 

To build its picture of uncertainty, the Treasury tells us that four processes would need to be completed:
Process 1: agreeing the UK's terms of withdrawal from the EU under Article 50 of the Treaty on European Union.

Process 2: agreeing the UK's new trading relationship with the EU.

Process 3: agreeing the UK's new trading relationships with the rest of the world including over 50 countries with which the UK would need to negotiate new trade arrangements.

Process 4: changing the UK's domestic regulatory and legislative framework.
Each of these four processes, we are then told, "would be complicated in their own right". But then we get: "conducting them all at the same time, on any terms that would be acceptable to the UK and within the specified two-year period for leaving the EU would almost certainly be impossible".

This, of course, is straw man territory. None of this presents the slightest problems if we adopt Flexcit. The terms of withdrawal and the trading relationship with the EU are largely settled by continued participation in the EEA.

The trading relationship with the rest of the world is maintained as at present, relying on the presumption of continuity and, as far as the UK's domestic regulatory and legislative framework goes, there would be no change. We would simply repatriate the entire acquis and take our time with any necessary changes or revisions.

Vote Leave, though, has no answers. In the Gove/Cumings scenario, they throw everything into the pot, with absolutely no idea of whether any settlement can be achieved, or what the timescale might be. They then talk grandly of a vast bonfire of regulation, from which they supposedly gain most of the economic benefits from leaving.

In other words, Vote Leave have set us up for the fall. They gave the game to the government, which can make the unanswerable case that leaving will cause a recession. Where we needed certainty, reassurance and predictability, Vote Leave gave us uncertainty and revelled in creating even more. 

With "recession" headlines plastered over today's newspapers, Vote Leave needs to revisit Galatians 6-7. This is the sort of stupidity that has cost us the referendum - and they can't say they weren't warned.



Richard North 23/05/2016 link
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