EU Referendum: trapped in their own inconsistencies

28/04/2016

Watching Arron Banks and Richard Tice in front of the Treasury Committee yesterday, one wonders what point there is in perpetrating this parade of mutual ignorance – apart from the limited entertainment value.

No more so does this apply when Banks was challenged by Chris Philp, Conservative member for Croydon South on the "regulatory burden" of EU membership, whence we get a dissection of the same tired memes that have been churned over by generations of eurosceptics, with much noise and almost no understanding.

Leading into the subject, Philp asks Banks to estimate the cost of this "burden", whence he elicits the response that that this is "unknown". "What I do know", Banks avers, is that if you attempt to harmonise all products and services across the EU and legislate for that, I would be a "very large number".

Banks then points out that, if we export to the United States of America, we have to follow their rules, same with Japan, so the European regulation is an "added burden" that is put on us because it affects all businesses not just the businesses that export into Europe, which is just "not that many".

Richard Tice then pops up with the "classic" Open Europe study and offers the sum of £33 billion a year for the top 100 most expensive regulations. This is just what Philp is waiting for, the cue for his party trick of showing that he had read the Leave.eu website and seen the figure there.

He then goes on to say that Open Europe has revised its work and come to the (stunning) conclusion that, when we leave the EU, we would keep many of these regulations, so the costs would continue to apply. By some measure, it comes to the conclusion that the "maximum conceivable" saving is £24 billion.

Tice, however, still thinks that this is a massive sum, that can be saved by the "95 percent of businesses" that don't export to the EU and probably have no intentions of exporting to the EU.

Philp then latches on to the EU's Capital Requirements Directive (CRD), which is counted as a cost in the £33 billion, and remarks that the UK government has "voluntarily chosen" to impose higher capital requirements on banks than is required under EU regulation. Withdrawing from the EU would make no difference to the burden of capital requirements legislation.

We thus see Philps having completely fluffed to point. As we all know (and was pointed out in the previous Treasury session with Cummings), the CRD is implementing Basel III, which is of global origin (and application). With or without the EU, we would still be applying this regulation.

Here, though, Banks and Tice are compromised (as was Cummings). Having followed the idle Muppets from Open Europe instead of doing their own research, they have already attributed the cost of the CRD to the wicked EU. It is thus difficult to switch horses in mid-stream and then argue that the cost is not attributable to the EU after all.

In this case, however, Banks completely blows it, arguing that the (extra) capital requirement is not a regulatory cost. We then have to have a short intermission while Banks is given a "Banking 101", to bring him up to speed on financial services regulation.

That then leaves Tice to parade his own ignorance, arguing that leaving the EU would bring the legislation back within our control, to decide what the capital requirements would be. The international dimension, it appears, has completely passed him by.

Moving on to environmental and climate change legislation (to which Open Europe attributes a recurring annual cost of £3.4 billion), Philps again notes that the UK has chosen to go beyond what the EU requires – although he neglects to note that this is implementing the Climate Change Act. But he does refer to the Paris agreement, which is, of course, a global accord. Rightly, therefore, Philps asserts that there would be no savings should we leave the EU.

At this point, I must refer to Open Europe's first intervention in this field, back in October 2013, when I wrote a blogpost pointing all this out, and much more. The OE work was then spurious and, well over two years later, we have an obscure politician pointing this out to self-appointed leaders of the "leave" campaign.

This is actually stuff I've raised personally with Banks – and indeed I also told Cummings at some length. But such is the determination to exploit the "regulation card", that the information goes in one ear and out the other. These people are simply incapable of registering the reality.

Oblivious to this, however, at this point in the Committee proceedings, Banks intervenes to suggest that Philps has raised a "very interesting point". Dimly remembering the North briefings, Banks tells the committee that a lot of the regulation now is "on a world basis" rather than a European basis. "So in fact", intones Banks, "the European Union is a wholly unnecessary middle man in the whole process".

What you're talking about, Banks tells Philps, is the regulations for banking are made "pretty much on an international, global basis and implemented by the European Union or the Bank of England". Again he repeats that the EU is a "middle man" in what is the implementation of a lot of global rules.

Says Philps in response, "if that view is correct" (and he believes it to be so), "then withdrawing from the European Union … would not deliver these amazing cost savings".

Banks is now comprehensively caught out, and can only respond by extending his display of ignorance. "These are high level things, discussed on an international basis", he says, "but we're talking about regulations imposed on small and medium-sized businesses", which has "nothing to do with any of the stuff you've just mentioned'.

Sailing clear over his head, therefore, are the effects of Codex Alimentarius, the OIE, the IPPC, UNECE and the other bodies which make up the bulk of the single market regulation, right down to the percentage of sugar that must be present in a preserve before it can be called jam.

Putting all these together, it is very much the case that, as Philps avers, that much of the regulatory costs attributed to the EU come from elsewhere. The cost-savings are illusory. But, while half recognising this, Banks and his sidekick Tice simply haven't connected the dots.

If, as Banks quite rightly says, the EU is a "middle man" implementing global regulation, then he can't have his cake and eat it. He cannot attribute the cost of this regulation to the EU, which is precisely what he has been doing – along with many others in the leave campaign.

Here, then, we see the campaign trapped in its own inconsistencies. On the one hand, we have a huge regulatory burden from EU law and, on the other hand, this is global regulation and not attributable to the EU. Which is it to be?