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Saturday 1 November 2014

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Despite Labour Police and Crime Commissioner, Shaun Wright, resigning in disgrace over the Rotherham grooming scandal, Labour's Alan Billings, a former Anglican priest who taught ethics at Lancaster University, has been electedin his place.

In what is becoming locked in as a parody of democracy, the turnout was 14.88 percent, the vote made up of 3.5 percent at polling stations and 11.7 percent postal votes. Billings took 74,060 votes, representing 50.02 percent of the votes cast - a risible 7.4 percent of the electorate.

Despite parking their tanks on Labour's lawn, with its contentious advertisement exploiting the Rotherham scandal, the Ukipites only pulled in 46,883 votes, to trail in a poor second place, taking 31.66 percent of the vote and a mere 4.7 percent of the electorate.

Deprived of its expected victory, UKIP is claiming this as solid growth but they scarcely dented Wright's 2012 vote of 74,615. Then UKIP's Jonathan Arnott polled 16,773 votes, bumped by David Allen for the English Democrats with 22,608 votes – the total amounting to just under 40,000.

With the English Democrats getting a mere 8,583 votes this time, and the Conservative vote largely static (respectively 21,075 and 18,536 votes), UKIP seem to be the beneficiaries of the collapse of the ED vote – although the Lib-Dem absence is a confounding factor.

In the Euro-elections, UKIP took a mere nine percent of the electorate. Now, out of an electorate of nearly a million (995,040) it gets 4.7 percent - the support of less than 50,000. We're not seeing any great upsurge of popular support. If this is to be a mass movement, it needs a little more than "solid growth".


Richard North 01/11/2014 link

Friday 31 October 2014

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It's almost comedic the way the hacks are trailing in our wake, this time Fraser Nelson who comes to the startling conclusion that leaving the EU wouldn't solve our immigration problem.

"The complex truth", he tells us, "is that the mass movement of workers affects every nation, which is why even non-EU countries like Switzerland and Norway have greater immigration levels than Britain. The United States controls its own borders (in theory) yet illegal workers remain a huge political issue. Immigration will always be a problem for any rich country – the more important question is how you handle it".

As recently as here, we were writing in precisely the same terms, but also arguing here, on 9 October, that leaving the EU, per se, would not solve our immigration problems.

The same point was raised by the "formidably briefed" Owen Paterson at the beginning of the month, and the end of last month, but we were also arguing the same point at the beginning of September. Our seminal piece, though, was in May of this year, when we argued for a "global solution" to immigration.

But now, months after the event, Mr Nelson comes waddling into the debate but, if he is behind the curve, his readers are more so as three thousand comments spiked with Ukipite vitriol take him to task for even suggesting that the UKIP mantra of leaving the EU is not the answer to all our ills.

This is not helped by The Dear Leader who gets it spectacularly wrong in declaring: "We should say to people who come into Dover from Calais and who claim refugee status, 'I'm sorry, you've applied at the wrong country, you've got to go back to France'. And that is what we should be doing".

This is typical of the ignorance of Mr Farage, and the inadequacies of those around him. All of them fail to realise that the reason we don't and can't and therefore don't send these asylum seekers back to France is nothing to do with the EU. It has everything to do with our own judges and the Human Rights Act.

The blockage stems from a case in 1999 when the Court of Appeal, headed by Master of the Rolls, Lord Woolf, found that France and Germany were not "safe places" to send refugees facing persecution "from forces other than the state", whence we could no longer return asylum seekers to either country. The then home secretary, Jack Straw, the Guardian reported, had acted unlawfully in ordering three asylum seekers to be returned to France and Germany. 

With some prescience, the Independent reported that Britain would have to accept thousands more asylum seekers. Hitherto, the government had relied on the Dublin Convention, that required that migrants applying for asylum within the European Union should have their application heard in the first member state in which they set foot. Now this had been set aside.

The ruling was described as "very important" by Anne Owers, director of the human rights organisation, Justice. She said the Government would have to review its Immigration and Asylum Bill which was based on the assumption that other EU states were safe destinations for asylum seekers, even though those states had harsher interpretations of the United Nations convention on refugees.

Straw did not leave it there. He took the case to the House of Lords, but the ruling was confirmed in the year 2000, just before Christmas, when barely anyone noticed. Nevertheless, the judgement is available online for those with wit enough to look it up – which evidently doesn't include Mr Farage's current advisers.

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With this, and other cases, the so-called "Dublin system" is creaking at the seams. To Germany and France, together with Austria, Greece has been added to the UK list of "no return" countries, while the EU has consistently failed to develop a coherent asylum policy.

While the asylum seekers is a very small component of our overall immigration burden, they do grab disproportionate headlines. And, with the Lords ruling have dropped out of the popular memory, the likes of Farage are milking the issue as part of the anti-EU campaign.

The point though, is that this is not an EU issue. Whether we were in the EU or not, there would still be asylum-seekers queuing up at Calais trying to get to the UK, and we would still be dealing with the same legal constraints.

After all, the UK has not signed up to the Return Directive, so this law does not apply, and we are thus bound by ECHR judgements and the UN Refugee Convention. In so doing, we are dealing with the principle of non-refoulement which, outside the framework of the conventions, has become customary law.

With this - as with so much to do with immigration - therefore, we have to look beyond the simplistic mantras, and explore the complexities that are clearly outside the grasp of the more virulent Ukipites. Aside from the few reasoned voices, their only contribution is to poison the debate, polluting the comment threads with their vile, ill-tempered diatribes.

But, as the lumbering Nelson observes, Mr Cameron is also playing it wrong. In particular, we would aver, he is failing to point out the source of our problems. But then Mr Cameron is compromised by his failure to address the ECHR and related issues, leaving him open to attack from the likes of Farage, who have never hesitated to disseminate their own brand of ignorance.

To a very great extent, therefore, Mr Cameron is the author of his own misfortune. He needs to up his game, even more than Farage. Ideally, they would both catch up, along with the Fraser Nelsons of this world, and then maybe we could have an informed debate that would actually get us somewhere. 


Richard North 31/10/2014 link

Friday 31 October 2014

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Only a month ago we were confronting an Ipsos Mori EU referendum poll which had 56 percent wanting to stay in the EU, compared with 36 percent who would vote to get out; eight percent did not know how they would vote.

This translated to 61 percent support for Britain's EU membership and 39 percent opposing after excluding "don't knows", creating a worrying 22 percent shortfall in the support for the "out" proposition.

But now, from the YouGov stable, we get another poll which transforms the position. From a week ago, when 41 percent said they would vote to stay in, against 40 percent "outers", we now have 35 percent and 44 percent, respectively, giving a nine percent lead for "out".

If we take out the "don't knows" and the "would not vote", we're looking at 56 against 44 percent, giving a 12 percent lead to the outers – effectively a 34-point swing in the space of three weeks.

There can be little doubt as to the cause of this swing – the £1.7bn demand from the Commission has self-evidently had a dramatic effect on sentiment, and driven huge swathes of voters into the "out camp".

But, as they say in the small print, what goes up can go down. And if sentiment is that volatile, then it would seem that any carefully structured campaign can easily be knocked off course by events.

And that is another point to draw from this sudden change – it has been event-driven rather than the effect of any specific intervention by campaigners. The commission action has been a gift to the outers, but it is nothing that we worked for or brought to the fore. We are simply the unwitting beneficiaries of events outside our control.

Looking at the detailed results, though, YouGov's Stephan Shakespeare notes that the swing is consistent across supporters of Labour, the Lib-Dems and the Conservatives.

The Ukipites, on the other hand, can't swing as much, with only two percent wanting to stay in, they are pretty rock solid about wanting to leave. Thus, it is entirely unnecessary to bolster the UKIP vote. We need to be expending out energies elsewhere.

Here, there is an interesting correlation between age and sentiment. The older the voter, the more likely they are to want to get out. And with only 22 percent of 18-24 year olds wanting to get out, as opposed to 57 percent of the 60+ group, it would seem that the growth in the "out" vote will come from the younger-aged groups.

Appearances, though, can be deceptive. The UKIP vote shows that a block can be almost solid in one direction, which thus illustrates that there is plenty of scope for growth in the 60+ group. And, given that the over-60s are far more likely to vote than the young (three or more times), their votes are much more valuable.

With The Times also recording that net payments to EU funds have doubled, from £4 billion since 2007 to £8.5 billion on the current account, there is plenty of material to work on.

When it finally dawns that the UK is going to have to pay the £1.7bn surcharge, some of the movement towards the "out" camp might firm up, with the vote solidifying in the outers' favour.

Nevertheless, the volatility remains worrying, so we will have to watch closely to see which way the next few poll results take us. If we have just experienced a turning point, then the game is on for the next election to push hard for a referendum. 

On the other hand, I remain to be convinced that the cost of EU contributions is the pivotal issue. After all, with a deficit growing at £100bn a year, even £1.7bn is less than two week's borrowing, and if we're into serious money, then we need to be looking at the £1.3 trillion which the government wants us to spend on meeting the 2050 emissions target.


Richard North 31/10/2014 link

Thursday 30 October 2014

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The House of Commons Public Accounts Committee has made serious news through yesterday and the day previously with its report, "Reforming the UK border and immigration system". Covered by the usual suspects in the media, such as the Guardian, it tells us of waste and poor management within Britain's immigration system.

Not least, failed IT systems have cost up to £1bn, officials can't find 50,000 rejected asylum seekers and 11,000 asylum seekers have been waiting for at least seven years to hear whether they can stay. Officials have still not resolved 29,000 asylum applications dating back to at least 2007.

Alongside the media though, the report is prominently flagged up on the UKIP website, illustrating the party's concern about immigration – albeit somewhat distant from the EU issue.

The point, of course, is that unless someone can point me to the "EU Directive on handling immigration affairs with staggering incompetence", there is no direct (or even indirect) link between our EU membership and the tales of chaos that have unfolded. This is entirely a homemade disaster.

As such, one struggles to see why UKIP is so interested in this particular report. It has neither policies nor plans to deal with such incompetence, and has never demonstrated any insight into public policy that might indicate that the party is capable of fixing problems that have eluded several administrations.

Less visible though has been UKIP's response to the government's new immigration strategy of "control by drowning" – one of the outraged responses to the UK refusal to support the search and rescue operation in the Mediterranean, picking up migrants making a dash for Europe in leaky boats.

This, according to Suzanne Moore in the Guardian is the "politics of denial" which is feeding a "growing inhumanity". This is after Theresa May's remarks about saving the lives of drowning immigrants was a "pull factor" in illegal immigration.

Sadly, that is indeed the case, as we hear of people traffickers who dump refugees in the sea in Italian territorial waters, and then call the coastguard to tell them of the location.

It is germane to ask how many migrants must be allowed to die at sea before the message gets through to desperate people that this is not a successful way of entering Europe, but as to the alternatives, UKIP so far has been silent.

If by whatever means, these migrants manage to land on mainland Europe, it is the receiving countries that must bear the expense and disturbance of dealing with them.

In Italy, we are told, they are given food and water, allowed to wash and sent on their way. "I was told that I could go anywhere I liked when I landed in Italy", said one migrant. "There weren't any checks; they know we don't want to stay in Italy as there is no work there and we don't speak the language so they just tell us to get on our way".

Some travel by train up to France, others by truck. None experienced problems or were told to turn around and go back. But by no means all are headed for the UK. By far the majority gravitate to Germany, where 76,000 asylum application were recorded in 2013. France took 61,000 and Sweden 45,000.

Of those who gravitated to Calais, only a relatively modest 22,000 made their way to the UK in 2013, aided as we now learn, by organised gangs of people traffickers.

But, with over 300,000 illegal immigrants landing in Europe last year, and significantly more expected to land this year, is it any wonder that the front-line countries such as Greece and Italy pass the buck, and send the migrants on their ways? They get little help from the rest of Europe, yet cannot afford to be the dumping grounds for the rest of the continent.

When the immigrants finally arrive in the UK, however, the simplistic Steven Woolfe, UKIP's immigration spokesman, has an easy answer. "It comes down to someone having the guts to say to these people, 'sorry, you're going home'", he says.

But these migrants have already destroyed their papers and are effectively stateless. France does not want them back, and if the individuals could be prevailed upon to admit their counties of origin, those countries mostly will not accept them back without papers proving who they are.

Thus, is not as simple as sending them home, which means they end up occupying a legal no-man's land, about which the Public Accounts Committee is now complaining. But with no leadership from the politicians, officials are being asked to do the impossible, leaving the problem to accumulate over the years.

None of this, though, is specifically related to EU membership. Leaving the EU will not stop migrants collecting at Calais and taking their chances of getting to the UK. And as regards immigrants to the UK generally, it is still the case that the majority come from outside the EU.

In fact, Britain admits almost three times more migrants from outside the EU than any other member state. Nearly 2.4 million resident permits were issued by EU countries last year, 30.7 percent of them to people heading for Britain. A total of 724,200 people from outside the EU were given permission to remain in the UK, a 15 percent rise on the previous year.

Even when illegal immigrants are caught out, though, and the employers fined, the fines are not collected, with the government thus failing to create a "hostile environment" for illegal workers.

Then, once resident in the UK, they are allowed to aggregate in squalid, over-crowded housing, with the local authorities rarely taking action, thereby creating conditions where immigrants, willing (or forced) to tolerate substandard conditions, are able to undercut the settled population, often then being paid – illegally – less than the minimum wage.

When proceedings against those responsible for sham marriages are also collapsing as a result of Home Office blunders, what price shallow fools such as Conservative MP Nick Boles jumping on the UKIP bandwagon, saying that Britain will never be able to "entirely" control its borders while it stays in the European Union?

Short of repealing that mythical EU "incompetence directive", leaving the EU is not going to make much of a dent in the problem. As with so many other issues, the UK does not need the EU to assist it in creating its own policy train-wrecks. It is quite capable of doing that unaided.


Richard North 30/10/2014 link

Wednesday 29 October 2014

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An intriguing piece in the Mail highlights an Ipsos Mori poll which compares public perception with reality. And of each of a number of high profile issues, from teen pregnancies to jobs and immigration, the poll shows public perception is at odds with reality.

Details are on the poll website and also given a treatment in the Independent, which has the British people being "ignorant" about "almost everything". Two comparisons stand out: the proportion of immigrants is put at 24 percent, when the reality is 13 percent, and the proportion of Muslims is put at 21 percent, when the real figure is five percent.

Interestingly, we are not alone in this. Says Ipsos Mori, diplomatically, the rest of the world is just as wrong. Across the 14 countries where the poll was conducted, the public thought immigration was over twice the actual level. The average guess was that 24 percent of the population was born abroad, when the actual figure is 11 percent.

That overall figure includes some massive overestimates: the US public thinks 32 percent of the population are immigrants when the actual is 13 percent. In Italy the public think 30 percent are immigrants when it's actually seven percent. In Belgium the public think it's 29 percent, when it's actually ten percent.

What is not discussed so far, though, is the political implications of this survey. It would be interesting, for instance, to carry out the same poll amongst MPs and then compare the differences. Possibly, there would a significant difference in relative perceptions, which could account for the charge that politicians are "out of touch".

Certainly, if perceptions are markedly different, and representatives are closer to the reality than their voters, this would mean that the antagonism towards the "political class" is being fuelled by ignorance.

In this scenario, the greater the ignorance, the more strident the antagonism, which may explain the "shouty, ranty" behaviour of UKIP supporters (or "kiptoids", as some are suggesting they should be called).

In writing history, one of the greater difficulties in assessing the reactions of key characters is not so much trying to work out what they knew, but in understanding what they didn't know.

Maybe we're dealing with the same phenomenon here, in that MPs and others have vastly under-estimated the ignorance – and thus the distortion in the perception – of the British public. After all, if they are unaware that the public sees a problem as twice as serious as it actually is, then their responses are going to be seen to be inadequate.

From this, though, devolves an interesting quandary. Should policy-makers seek to educate voters – and thereby correct their perceptions – or respond to public perception, even though it is wrong? And, if they don't do the latter, how do they avoid the charge that they are ignoring public opinion?


Richard North 29/10/2014 link

Wednesday 29 October 2014

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I suppose that, if the BBC was retailing something that no one wanted to hear, it would be accused in some quarters of "bias". But when this report, and others, such as from The Guardian and the Telegraph all tell roughly the same story, those who feel so inclined rush to believe what they want to believe - that we are close to suffering blackouts this winter .

The essence of the story, as retailed by the media, is that the National Grid has warned that its capacity to supply electricity this winter will be at a seven-year low due to generator closures and breakdowns. Spare electricity capacity, we are told, which ran at about five percent over the winter months last year, will be nearer four percent this year. And this compares with 17 percent three years ago.

Why this news is so welcome to some, I would hazard, is that there is a constituency which wants the system to fail, simply to demonstrate the failure of the green-driven energy policy. This is perhaps typified by this Bishop Hillite comment:
Personally I'm hoping for a few powercuts hitting London. Sorry London, but if you are affected the media are far more interested than if it happens in Bradford or Bristol. Only if this happens might MPs start to look at what their policies have done.
But while one can sympathise with the general sentiment, it actually looks as if the doom-mongers are crying "wolf!" – in the short-term at least. The quadruped is still over the horizon - as Booker pointed out last year.

Despite this, the short-term power cut narrative has become firmly lodged in the media, which means that the current reports bear no relation to the reality and in no way do the headlines reflect what the National Grid is trying to say.

To get the full picture, one has to venture past the press releases and lurid headlines, and look at the full 66-page Winter Outlook Report. This tells anyone interested enough to find out exactly what the situation is.

First of all, despite the media stressing that the mid-winter peak demand could hit 55GW, with a capacity available of 58.2GW – hence bringing the margin down to its slender level – this figures are based on a series of assumptions which make the declared margin an impossibly pessimistic worst case scenario.

Looking at the actual report then, we find that the mid-winter generation capacity is assumed to be 71.2GW while the forecast peak electricity demand  is 53.6GW. Therefore, the expected margin is actually 17.6GW. However, what the Grid is doing is, for planning purposes, it is creating a worse-case scenario.

Thus, to be on the safe side, it creates a pessimistic demand scenario, using a more arduous "Average Cold Spell" (ACS) electricity demand assumtion. This, the Grid says, has a 50 percent chance of being exceeded, bringing peak demand to a notional 55.0GW.  On the supply side, the assumed capacity of 71.2GW is then purposefully de-rated, to take into account availability and historic performance of the plant declared available.

So cautious is this estimate that, even though we have interconnectors from France and Holland (plus Ireland) capable of supplying 3.7GW, the assumption is that we are able to import only 750MW, while exporting rather than importing a full 3GW through the remaining interconnectors. Typically, though, we tend to import 3GW.

By this means, we end up with the 58.2GW, which really is a worst case scenario. But this is not a figure which represents any expected real-life situation. It is a working figure, used for margin analysis, from which is calculated the "operational de-rated margin" of 4.1 percent across the winter - the headline figure that the media have used.

This figure, though, is not a forecast. It is used simply as the basis for reserve planning, and even then it is not the base figure. This margin does not take into account Demand Side Balancing Reserve (DSBR) or Supplementary Balancing Reserve (SBR), two new balancing services which collectively increase the de-rated margin to 6.1 percent. That is the true figure, not the 4.1 figure quoted in the media, taking account of real additional capacity.

As an indication of how relaxed the National Grid is about the supply situation, it has taken a mere 319MW as DSBR and, of the 5.4GW bids it received for SBR (bringing back redundant and mothballed plants back into service), it contracted only 1.1GW. And even then, the 6.1 percent margin remains the figure for planning the additional  short-term reserve requirement.

The reserve itself includes STOR and, from the 3GW available last year, 3.5GW is contracted for this winter – a capacity in excess of that expected from Hinckley C. To this is added another 1.9 GW (approximately) of frequency response reserve – up a full GW from last year. On top of that, there is the "maximum generation" emergency reserve of 740MW.

All of this adds up a total reserve of about 7.5GW, which includes about 5GW of operating reserve, and an expected overall gap of about 25GW between the likely peaks and the possibility of a blackout.

The way the system works is that predictable problems (such as wind dropping out of the system) are accommodated by the de-rated margin process. That leaves the net (de-rated) margin and the operational reserve to cope with the unexpected: the unusual peak demands and plant breakdowns or other outages (grid failures, etc). This "hidden reserve" is more than enough to protect the system and prevent failure, yet the media acts as if its doesn't exist.

Nevertheless, we have Cordi O'Hara, Director of Market Operation, National Grid, in the actual report, telling us that the NG report is not a prediction of what could or will happen. Based on the work done, she says, "it's clear the country has the ability to meet its energy needs".

On this, Ofgem concurs. Rachel Fletcher, Ofgem's senior partner for markets, says: "The message … is that there is no increased risk of blackouts", adding to industry sources which are offering the same message.

In other words, there are substantial reserves in the system, giving it far more resilience that the media allow. Despite the wishes of the doom-mongers, it is extremely unlikely that we will see any power cuts this winter. But that is not the game the media wants to play. The narrative requires that the public is misled, and misled it shall be, fortified by those who willingly believe the fiction.


Richard North 29/10/2014 link

Tuesday 28 October 2014

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Very much obscured by the row over the EU budget is the deal Mr Cameron made over the 2030 targets on climate change, on which he elaborated in parliament yesterday.

"One problem we have faced in the past [with the EU] ", said Cameron, "is that instead of just setting a binding target on carbon emissions, the EU has set binding national targets on things like renewables and energy efficiency".

"These diktats on how each country should reach its commitments can pile up costs on our industries, consumers and families who do not want to pay more on their energy bills than they have to", he added, "and they create an unnecessary trade-off between cutting carbon emissions and promoting economic growth".

Thus said Mr Cameron, "At this Council, we have chosen a different path. We have reached a landmark commitment to deliver at least 40 percent reductions in greenhouse gases by 2030, but we have rejected any new binding national targets for renewables or energy efficiency, giving us full flexibility over how we reduce our carbon allowing us to do so at the lowest possible cost for businesses and consumers".

"This", he said, "is another example of where British leadership has helped the EU to step up and meet its international obligations, while at the same time protecting our national interest by keeping energy bills down for businesses and Britain's hard-working families".

I wonder, though, how many people realise how dishonest this statement is. The prime minister glibly talks about a 40 percent target for CO2 emission reductions by 2030, and talks of the "flexibility", which allows us to meet this target allowing us to do so at the lowest possible cost for businesses and consumers "at the lowest possible cost for businesses and consumers".

But what he doesn't say is that the UK has already committed via the Climate Change Act to the 80 percent reduction target by 2050, which is already driving our energy policy. Thus, the 2030 target for Britain is an irrelevance when we have already adopted one which is far more severe. And the "flexibility" is of very little importance, when we are already saddled with this impossible target.


Richard North 28/10/2014 link

Tuesday 28 October 2014

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If EU migration is the problem, Switzerland and Norway are not the answer Since both Switzerland and Norway accept far more immigrants per capita than the UK, why do so many people look to them as the answer to Britain's immigration worries?

So writes the great sage Mats Perrson of the Europhile Open Europe, once again trailing behind this blog. We did it on 28 September and several times thereafter, including here.

These people are so far up their own fundamentals, they have no idea what is happening in the world around them.


Richard North 28/10/2014 link

Monday 27 October 2014

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This woman doesn't have the first idea of what the 2050 emissions target really means. Watch this video for the bit when she claims that it doesn't involve complete decarbonisation of electricity because the target is seeking only an 80 percent emissions reduction.

Yet this creature is Secretary of State for the Environment, a person supposedly in charge of our response to "climate change". Could a Secretary of State be so ignorant? Need you ask?

Another own goal for Mr Cameron.


Richard North 27/10/2014 link

Monday 27 October 2014

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Something of the story behind the story on Mr Cameron's £1.7bn began to emerge in the Sunday Telegraph yesterday, with lead writer Tim Ross kindly adding my by-line to the copy. The Mail on Sunday, however, went for a fictional version of events, going for Mr Gove's incredible theory that the Barroso personally dumped a £1.7 bill on the UK as an act of revenge.

The Financial Times though, is coming up with a completely different version of events. The £1.7bn figure, it tells us, is a one-off payment which accounts for less than 0.1 percent of UK GNI, representing a top-up to UK contributions covering 11 years. Thus, the paper says, Britain is being asked to pay a "modest" adjustment of an extra £150m a year over the period, a sum that would barely deserve a footnote in the UK's annual accounts.

Now, the Mail is saying much the same thing, that "the European Commission issued the demand to the UK after using rules dating back to 1995 and finding Britain's economy has grown faster than expected, so must pay a greater share to Brussels".

This, one assumes, is based on the Commission Q&A on the revision of Member States's GNI, which I only saw last night. Contradicting completely my report on the application of ESA 2010, it states that this year's technical adjustment does NOT take into account the new method of calculating member states' GNIs. This new method, it says, will have no impact on their GNI contributions to the EU budget until the new own resources decision comes into effect, which is probably 2016.

To the question of why this year's technical adjustment sees such big increases of contributions to the EU budget for some member states, the Commission tells us that this year's adjustment includes GNI re-calculation dating back to 2002 for most member states and to 1995 for one.

There were, we are told, a number of unresolved issues that had accumulated over the last years. The decision to resolve these historic issues now results from a joint effort of member states in cooperation with Eurostat. With all these issues now cleared, future such corrections will again be rather minor, as they were in recent years. 

This seems to be borne out by sight of an (undated) information note to member states, which sets out the sums involved, on which much of the media publicity has been based. It sets out in detail the adjustments for the different members states for the years 1995-2013.

As to the legal authority to apply retrospective adjustments, the Commission cites Council Regulation No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC on the system of the Communities' own resources. It would seem that Article 10(8) applies, referring to Article 3(2) of Directive 89/130/EEC on the harmonization of the compilation of gross national product at market prices.

There is nevertheless something very odd about the Commission Q&A, because it cites Council Decision 2007/436/EC on the system of the European Communities' own resources, as being the basis for calculating the Members' contributions. Yet, as we see here, that Decision has been repealed and replaced by Council Decision 2014/335/EU on the system of own resources of the European Union. It takes effect from 1 January of this year.

The crucial thing about this updated Decsion is that it tells us that Member States' GNIs "shall mean an annual GNI at market price, as provided by the Commission in application of Regulation (EU) No 549/2013 (ESA 2010)" - thereby installing the new European System of Accounts, except that pro temp contributions were to be based on ESA 95 because ESA 2010 had not been available at the time of the adoption of the 2013 Decision.

But, the Decision went on, "the contributions should be adapted as soon as all Member States have transmitted their data on the basis of ESA 2010". "In the event that there are any amendments to ESA 2010 which entail a significant change in the level of GNI", it then said, "the ceilings for own resources and for commitment appropriations should be adapted again". A method of recalculation was then set out.

On this basis, it would appear that the Commission is wrong in claiming that ESA 2010 does not apply. Its own legislation says it does, and unless there is an unknown factor here, the new standard applies to the current figures and the adjustments.

Therefore, what I think has happened is that, guided by Directive 89/130/EEC and Decision 2014/335, the UK and other Member States have revised their GNIs retrospectively using ESA 2010, which has given rise to the adjustments recorded. But it must also be remembered that the procedure requires Member States to calculate their own GNIs, and send the results to the Commission. This is not something the Commission does for us – we do it for ourselves.

Thus, as far as the awareness and the advance notice goes, my previous report would seem to be accurate (unless or until we see further developments).  The UK was informed that changes were in progress. It is unlikely that Mr Cameron can claim that the Commissions was not entitled to the money it is claiming, as the sum is based on data provided by the UK – presumably calculated by the ONS - in accordance with well-established procedures.

Since the ESA 2010 changes have been flagged up continuously, the UK government – and therefore Mr Cameron – can have no justification for saying they didn't know what was coming.

Seldom though have I met a more complex scenario – where the Commission also seems to be getting it wrong. Even Mr Barroso didn't seem to know what was going on. And that may just provide a small window of opportunity for Mr Cameron. It the Commission itself is all at sea, he could claim that it is unfair to expect him to know better.

Of course, his "Rolls-Royce" civil service could have told him, except that Rolls-Royce cars is now owned by the Germans. That is perhaps why Mrs Merkel was in the know and Mr Cameron wasn't.


Richard North 27/10/2014 link