What happened to the Sterling exchange rate panic?

Oh dear – the sky will fall in if we leave the EU. That was the message we were given when the pound fell in value against the US dollar, following David Cameron’s return from Brussels and the date for the referendum being announced.

Quite apart from the fact that, as was pointed out by John Redwood, the pound was much lower against the dollar in January 2012  when there was no imminent referendum,  it has since recovered most of the ground it lost.

On 17th February, when Mr Cameron was still “battling for Britain”, the puond stood at $1.426

On 20th February, the day the referendum date was set, it stood at $1.44

On  22nd February, when Boris Johnson announced he would be supporting the “leave” campaign, it fell to $1.388

On 7th March, however, it had recovered most of the lost ground and stood at $1.427, higher than the exchange rate on 17th February.

Has the recovery in sterling received any press coverage? Not to my knowledge and certainly not in connection with the EU debate.

What is more, the pound will actually buy you more euros now than at any time since the referendum date was announced. Today (9th March), £1 was worth €1.297. As with the dollar, the exhange rate did fall on 20th February, but in the period immediately before the referendum date was set, the pound’s highest rate was a mere €1.294.

Much ado about nothing, in other words and a foretaste of what is likely to happen in the event of Brexit – a sudden fall in the value of sterling as lily-livered traders panic, but after the realisation that armageddon hasn’t happened and that the UK economy remains basically sound, the losses will quietly be reversed. Fears of massive price hikes are totally unfounded.

Photo by HowardLake

Associate membership – dead or just sleeping?

The deal on which we wil be voting on June 23rd has been exposed on this website and elsewhere as lacking in substance and entirely conditional on the signing of some future EU treaty – in other words, not worth the paper it is printed on as things stand.

Only a few months ago, it looked like Mr Cameron was going to return from Brussels with at least a commitment to a new treaty formalising the UK’s status as leader of the EU’s Second Division. It became clear by February, however, that the blueprint for this treaty, the Fundamental Law of the European Union, was being kept on the back burner for the time being and was essentially irrelevant as far as our referendum was concerned. Furthermore, both Angela Merkel and France’s President Hollande stated that there was no plan for a new treaty  – indeed Frau Merkel went as far as to say that “on the question of amending treaties, we do not know if we ever will have a change of them.”

Obviously, it is the hope of everyone at CIB that our country will vote to leave the EU in June, but if we don’t, one hint has recently appeared suggesting that a new treaty may be back on the agenda at some point in the future.

William Hague, writing in the Daily Telegraph, discusses Turkey’s relationship with the EU. Hague has been a long-standing supporter of full Turkish membership, but not only does he acknowledge that other EU member states are considerably less enthusiastic than he is, but he admits that Turkey’s “authoritarian direction means that it cannot be a full member of the European Union, and that continued pursuit of that goal, for the time being at least, will achieve nothing.”

Hague therefore proposes “a kind of associate membership. This could involve Turkish membership of the single market and participation in Europe’s trade deals with the rest of the world, but without full freedom of movement of people. It could be based on co-operation in foreign affairs but no linking of criminal justice systems. Like Britain, Turkey would not be committed to ‘ever-closer union’, and there would be no question of joining the euro.”

He then makes the obvious point that associate membership is not yet on offer, but is he right in saying that “the EU….would be frightened to create it”? Hardly. The two-tier Europe of the Fundamental Law  enjoys the support of a number of ardent EU federalists including the UK’s own Andrew Duff, a former Lib Dem MEP. This proposal was doing the rounds in 2014 and 2015 and even its recent quiescence does not imply that the EU has suddenly become running scared of the idea. At some point, by some means or other, the Eurozone wil want to forge ahead with closer integration will inevitably be on the table and whatver Merkel or Hollande may say, the Fundamental Law looks like the obvious starting point.

Hague’s article is headed “Will Turkey”s EU relationship be a model for sceptical Britain?” which suggests that he is fully familiar with the Fundamental Law.  It is possible that other non-EU member states such as Norway and Switzerland could be offered associate membership too.

Hague may just be putting forward his own ideas, but clearly some accomodation will have to be made for Turkey and the prospect of such treaty proposals being dusted down in a few years’ time would, of course, give us a second bite at the cherry. Norway, Iceland and Switzerland are all blessed with well-organised independence movements and are unlikely to take kindly to any attempt to shoehorn them into the EU, even if accompanied by a threat to wind up the EEA, which an unanimous vote by the EU member states could bring about. The EFTA countries will most likely react strongly to such bullying; indeed, earlier this month, the Swiss Parliament finally withdrew its application to join the EU – admittedly only a symbolic gesture as Swiss membership has essentially been void since 1992 anyway.

Whatever form this new treaty takes, however,  it would be hard for any future UK government to avoid offering us a referendum and, working in conjunction with the other non-EU countries, we could well, given a longer timespan, persuade the electorate to reject it, showing how much better life is outside of the EU which could well lead to a renewed opportunity to put UK withdrawal back on the agenda.

This, of course, is hypothetical. Our objective is to secure a “leave” vote on June 23rd, rendering  Hague’s speculations irrelevant, but those of us who have campaigned all these years for withdrawal are not going to go away if Dave’s cut and run campaign succeeds in scaring the electorate into staying in. He might win this battle (although hopefully he won’t) but we will win the war.

Photo by Chadica

John Longworth supports Brexit and resigns from the BCC

Readers may be aware that John Longworth has stepped down as Director General of the British Chambers of Commerce because he supports Britain’s exit from the European Union. Following his resignation, he went on to accuse Prime Minister David Cameron of scaremongering

A video of an interview he gave to the BBC seems to have disappeared, but in the video below, he makes the same point – the UK would be better off leaving the EU .

Mr Longworth denied that he had been put under political pressure to leave, saying that the decision was entirely his.

“I don’t regret making those comments at all,” he told the BBC’s World At One programme. “I made it very clear when I delivered my speech (on Thursday) that there were additional comments that were of a particular and personal nature.”

Ten Years? not likely

It could be a full-time job just to debunk all the nonsense that is doing the rounds at the moment.

The latest scare story to do the rounds is a suggestion that UK withdrawal would trigger “ten years of uncertainty.” This is partly based on fears about the validity of trade deals negotiated by the EU on our behalf (and the other member states too, of course).

Lord Lawson, interviewed on the World At One, disputed this and he is right. At a recent seminar Robert Oulds, a CIB Committee member, explained that there was a “presumption of continuance” when one party to a trade deal underwent a change of circumstances. Thus, we would still be able to participate in such trade deals as those negotiated between the EU and Chile, Mexico and South Korea on leaving the EU. Let’s face it, this is sheer common sense; why would either party not want to continue?  All that would be needed is for the two parties to sign an agreement stating that they wish the deal to continue.

Of course, trading with the EU could be more complex and this is why there has been much support for using the so-called Norway Option (re-joining EFTA to allow sealess access to the EEA) to tide us over. It is possible that the desired Europe-wide genuine Free Trade agreement which would replace the EEA COULD take another 10 years, but as long as trade continues seamlessly throughout the withdrawal period, as it would with the EEA/EFTA secnario, no one need be worried. Indeed, as Richard North has put it, this ten years would be a Decade of opportunity.

While we’re at it,  claims that we need ot stay in the EU for security grounds have also been dismissed by Richard Walton, Scotland Yard’s former head of Counter Terrorism.  According to an article in the Daily Telegraph, he said that reducing terror plots is “absolutely not” dependent on being a member of the European Union. “So let’s not scare the horses with fears about Brexit.”  How many more scare stories are we going to have to debunk?

Returning to the World At One feature, it was correct on one point. An academic was quoted saying that once Article 50 is invoked. “the train has left the station” – in other words, withdrawal MUST happen.

Is this scary? Hardly. If you were told, “After 43 years in prison, we’re going to let you out soon, but beware! Once you go through that prison door, we’re never going to let you back in again”, would you really worry about that?

Photo by infomatique

Behind the scenes….

All the attention of the press over this past weekend has been focussed on the statements made by big names – Tory Cabinet ministers, the G20 and so on, about the impact of withdrawal. Meanwhile, behind the scenes,  supporters of withdrawal have been active in spreading the message that withdrawal, far from being the “gamble of the century” as Mr Cameron would have us believe, would be immensely beneficial for our country.

We received an encouraging report from Josh O’Nyons, one of our leading activists in the West Midlands.  His team set up a street stall in Knowle (which, for the benefit of anyone unfamiliar with the area, is situated a few miles south of Solihull) and the result of what Josh admits was “a highly unscientific straw poll of 112 people” produced a most encouraging result:

59 – Supporting Leave

24 – Supporting Remain

29 – Undecided.

New supporters and volunteers were recruited at the same time. Well done to Josh and team for a good morning’s work.

Letters to newspapers can also help in winning round undecided voters. We circulated a lettter written by our Chairman last week, which he is happy for people to use as a template. Another supporter spotted this excellent letter below in the Sheffield Telegraph and is also highly recommended as a model for anyone wanting to try their hand at writing to their local paper:-

Sad day for our country if we DON’T leave the EU

After a fake EU “renegotiation” insincere ex Carlton Television PR man, David Cameron tries to fool us by manufacturing a non existent “victory” with his “reformed” Europe.Unfortunately, the Remain campaign and their leader, David Cameron won’t tell you these embarrassing facts: before Cameron’s EU “reform” there were around 23,000 EU legislative Acts applicable to Britain and after the “renegotiation” theatrics?… There will still be 23,000 EU Acts in place. Cameron got exactly what he asked the EU elites for – nothing!

It is perfectly possible to Leave the EU’s anti democratic and unaccountable political institutions and remain in the Single Market via an exit strategy of phased withdrawal using the established “Norway option”: See http://www.eureferendum.com/documents/flexcitlite.pdf

1. Invoke the Article 50 exit clause in the EU treaty, requiring the EU to negotiate a new relationship when Britain leaves political union.

2. Retain access to the Single Market which is larger than the EU and is covered by a separate treaty which Britain, like non EU Norway, is already signed up to thus ensuring no economic disruption and reducing EU contributions by up to £9 billion per annum.

3. Only 20% of the EU’s 23,000 Acts cover the Single Market, so the remaining 80% will be nationalised on EU exit then reviewed, amended or repealed as needed over future years with no impact on Single Market trade.

4. Instead of having a mere 1/28th of the EU’s one vote, Britain regains 100% of its own vote, voice and veto at the real “top tables”- the global regulatory bodies above the EU where the majority of global regulations come from and which the EU merely implements in the Single Market. Along with e.g. Norway and Canada, Britain will exercise exactly the same voting strength as the EU on the global bodies.

The alternative to independence is to remain in an unstable, undemocratic and declining political union with a failing currency and social unrest. It will be a sad day for this country if we do not vote to leave

John Wilkinson, Sheffield.

It has been apparent for some time that there is no silver bullet – no single event that is suddenly going to shift public opinion dramatically and irrevocably towards withdrawal. We are in a battle that requires large numbers of activists fighting on all fronts, including low profile activities such as street stalls, letter writing and blogging as well as more high-profile public meetings. As Josh’s campaigning and John Wilkinson’s letter show, ordinary people can play their part in slowly and surely turning round public opinion. Indeed, our role is essntial – even the most well informed pro-withdrawal politicians won’t win it by themselves. CIB has a number of leaflets in the pipeline, including a reprint of our popular “Five mistaken assumptions ” leaflet. We would also remind everyone of the launch of The Leave Alliance on Wednesday 16th March, which CIB supports and which we trust will prove an invaluable resource for “leave” campaigners.

The Leave Alliance also has a website which is particularly recommended as it will provide regular helpful updates on the debate. The links to the websites of the associated Bloggers Army (or “Brexiteers as they are called on the website) are also useful resources. It is vital for us all to make full use of the internet  – a powerful weapon for disseminating truth which our predecessors didn’t have in 1975.

In summary, there is everything to play for, but it will require a great deal of hard work, keeping up to date with the debate and a sound exit strategy if we are to counteract the lies and fear tactics emanating from the Prme Minister’s circle, but although we are clearly the underdogs, we can pull it off.

   

Cameron has already lost

If Mr Cameron wins the referendum, he will have achieved a pyrrhic victory. It will not have achieved his objective to settle the “British question” once and for all.

An article in last Tuesday’s Independent concludes on the basis of recent opinion polls, that the UK electorate will vote to remain in the EU, still unhappy with it, but unconvinced there is a sound economic case for leaving. In other words, we would continue to play our accustomed role of “the Awkward Partner”,  far from sold on the vision of a federal Europe, dragging our feet with the integration process and generally upsetting the other countries as we have done for much of the last 40 years.

It would be the worst of all possible worlds and a deeply unsatisfactory outcome for Mr Cameron. However, it seems that this is what he wants. The fear card is still being played for all it is worth. Last Friday’s newspapers claimed that withdrawal would make our food, air fares and holidays more expensive. Read any article on this subject in detail and beneath the headlines, it amounts to little more than scaremongering about the drop in the value of the pound, based on its fall earlier this week.  As we pointed out here, there are many reasons why currencies rise and fall. Currency traders only think in the short term. No one would deny that the herd instinct may cause a brief drop in the value of Sterling immediately following a “leave” vote, but once the markets realise that the sky hasn’t fallen in, it won’t last long. Our economy is sound – especially relative to that of much of the EU.

Mr Cameron is orchestrating a fear campaign which began within hours of his return from Brussels. Can he really keep this up for another four months? If so, the best he can hope is that people just turn off in boredom. More likely, this incessant diet of fear is going to breed a healthy cynicism which the “leave” camp could  – and indeed intend to – exploit to the full. Watch this space!

Cameron has all too many accomplices in trying to shut down open and honest debate. Not surpisingly, his sidekick George Osborne weighed in, claiming that “this is not some political parlour game, this is about people’s jobs and their livelihoods and their living standards. In my judgment as Chancellor, leaving the EU would represent a profound economic shock for our country, for all of us, and I’m going to do everything I can to prevent that happening.” Considering Mr Osborne’s track record so far as Chancellor, we must be thankful that there will be no economic armageddon for him to save us from, or else we would be well and truly doomed.

More disturbing was this article in Friday’s Daily Express describing how a teenager at a school in Southampton was accused of “political extremism” for accessing the UKIP website from a school computer and was subsequently reported to the police, with teachers claiming he had raised welfare concerns by visiting “politically incorrect websites”. He was then referred to a specialist team whose usual brief is preventing vulnerable youngsters from being groomed and indoctrinated by Islamic State jihadis.

Furthermore, the letter written by Jeremy Heywood, the Secretary of the Cabinet & Head of the Civil Service to civil servants and special advisors ordering them to limit assistance to ministers supporting the “leave” proposition, does nothing to suggest that there is any intention to conduct the referendum in a fair, even-handed manner.  It was encouraging that Owen Paterson MP challenged the Prime Minister in Parliament about this breach of the fundamental principle of civil service neutrality. Unfortunately, Paterson’s intervention did not receive the media coverage it deserved. 

The one weakness of the Leave Campaign to date is our failure thus far to present a coherent seamless exit strategy.  This, however, will be addressed next month at the launch of the Leave Alliance in London, to which all are welcome.

Armed with a suitable weapon with which to counter Cameron’s fear tactics, we will fight for all we are worth to secure that crucial “leave” vote.

Of course, if he wins, Mr Cameron will try to depict us as bad losers, but no one can possibly claim this is a fair and open contest. Our best hope is that we won’t lose because the public can see through his games and ask the very obvious question that if remaining in the EU is such a good thing, why does it require such spin, deceit, fear tactics and rigging of the debate to convince us that this is so?

 

 

Photo by antigallery