Yet more media muddle

As we reported yesterday, Mrs May is not giving much of her Brexit strategy away at the moment. For anyone wishing to find out more, great care needs to be taken as some reports in the press are, shall we say, somewhat less than helpful.

Writing in the Independent, John Rentoul informs us that “Finally, we know what Brexit actually means – Theresa May intends ot take us out of the single market.” Has  Mr Rentoul spotted something that the rest of us have missed? He noticed that Mrs May made it clear that “‘we are not leaving only to return to the jurisdiction of the European Court of Justice.”  He therefore concludes that, “given that the ECJ is the court that enforces the rules of the EU single market, this was confirmation that she intends to take us out of it.”

QED – except that it isn’t true. Whatever the role of the ECJ in enforcing the single market regulations among EU member states, it has no power over Norway, Iceland and Liechtenstein, the non-EU countries who are part of EFTA and access the single market via the EEA Agreement.  Robert Oulds’ book Everything you wanted to know about the EU explains the difference clearly (p189) :-

Whereas the European Commission and the European Court of Justice regulate the EU’s compliance with the terms of the EEA agreement, EFTA’s side is managed by its own institutions.”

In other words, Mr Rentoul is jumping to conclusions. Mrs May has said that “it is not going to be a Norway model”, but she said nothing to preclude the Liechtenstein model – in other words,. re-joining EFTA and accessing the single market via the EEA agreement but invoking Article 112 of that agreement to reduce migration from the EU.

Another piece to take with a very hefty pinch of salt is this piece in the Irish Times by Professor Vernon Bogdanor, David Cameron’s former tutor.  Entitled Why Brexit will be Margaret Thatcher’s revenge, the piece claims that “those most likely to have voted for Brexit will suffer most after Article 50 is triggered.” It goes on to say that “Contrary to popular perceptions, article 50 inaugurates a withdrawal process, not a trade agreement.” I would like to know how many people Professor Bogdanor has met who really think that invoking Article 50 was anything to do with a trade agreement. I certainly haven’t met any!

Getting off on a bad note, he then parades even more ingorance than Mr Rentoul about the EEA. “Matters would be easier, of course, were Britain to emulate Norway and join the European Economic Area, ” he writes. Excuse me! As a mamber of the EU, the UK is ALREADY a member of the EEA. What I presume he means is that we should remain a participant in the EEA by re-joining EFTA, but it isn’t what he said. He then goes on to claim that “The EEA obliges member states to incorporate not only current EU laws, but also future legislation, into domestic law, and to accept the principle of free movement.” Wrong again. The EFTA countries who are part of the EEA are only required to transpose legislation specifically marked “EEA relevant” into domestic law.  Last October, Dr Richard North calculated that only 4,947 out of 23,076 pieces of legislation – in other words, about 21% of the total Acquis – had been incorporated onto Norway’s statute books, much of it technical in nature and much of it also originating with international bodies like the WTO, with the EU merely acting as a conduit.  As for free movement, there is some freedom to restrict it using Article 112 of the EEA, as we have aready noted.

Neither Messrs Rentoul nor Bogdanor seem aware of the Norwegian veto of the Third Postal Directive in 2012, which insisted on deregulating postal services across the EEA. This proves the point that non-EU countries cannot be touched by the ECJ and thus have far greater latitude in dealing with EU legislation, even when marked “EEA relevant.”

Next comes another myth:- “Per head, Norway currently pays around 83 per cent of the British contribution.” In 2015,  Norway paid £1.66 per head of population to access the EEA. We paid about £150. Either the great Professor inadvertantly included Norway’s voluntary contribution to various EU schemes or his calculator seems to be suffering from a chronic malfunction.

He then rounds up his dismissal of any EEA-type relationship by repeating the “regulation without representation” nonsense. Dear Professor Bogdanor, please get your facts right. Norway is represented on the Committess which create EEA-relevant law, even though the country does not have a vote. Read these words of Anne Tvinnereim, a Norwegian politician, who knows what she is talking about. “We do get to influence the position,” she said. “Most of the politics is done long before it {a new law} gets to the voting stage.”

Professor Bogdanor then rejects the Swiss option, which virtually everyone else has already done, but this leaves him with only the WTO option as a possible route, something which Mrs May, by proposing the nationalisation of EU law (in other words, giving laws passed by the EU their authority from our Parliament rather than the EU via the 1972 Accession Treaty) seems to have ruled out.

He is right to conclude that newly-independent UK will be more global. “The irony is that…..leaving the EU will expose Britain to more globalisation, not less.  Brexit, therefore, will be Margaret Thatcher’s revenge. It will suit the vision of the Tory right which hopes that, outside the EU, Britain could become like Hong Kong or Singapore, a global trading hub.” However, he then falls into the common trap of saying that this is exactly what Brexit voters don’t want. Vernon, old chap, I was accused by my opponent in one debate of selling a vision of an independent UK which was just that – “Singapore on steroids” to quote his words.

There are many of us who are excited by the global trading opportunities which Brexit will provide. A recent Fabian Society report linked the Brexit vote with economic deprivation and the lack of government spending on areas populated by the white working classes, but a look at the Brexit vote map shows that this is only part of the story. Many prosperous areas in the South East also voted for Brexit. In rural East Sussex where I live, plenty of large houses, presumably inhabited by people who are not at all economically deprived, displayed large “Vote Leave” boards in their gardens and outside their gates.

On one point I would agree with Professor Bogdanor:-  “Britain….has a deep-seated skills problem…. The priority, if May’s socially responsible capitalism is to be become a reality, must be a radical skills policy. That means more resources devoted to further education colleges, currently the Cinderellas of the education service, and to university technical colleges, for those whose skills are technical and vocational rather than academic.” Yes indeed, to make the most of Brexit, our education system needs to be signficantly re-vamped from top to bottom. Last year, we published Generations Betrayed, a booklet by Chris McGovern, which shows how much the history syllabus needs to be reformed. This, however, is only one of many features about the UK education system which is unsatisfactory.

In conclusion, however, after having ploughed through these confusing articles, the abiding thoughts they leave is a fervent hope that the people who are advising Mrs May about the best Brexit route are considerably more clued-up than Messrs Rentoul and Bogdanor and actually know what they are talking about.

Photo by NS Newsflash

Five more monographs on Brexit from the Leave Alliance

The Leave Alliance, of which the Campaign for an Independent Britain is a member, has produced five further monographs on the subject of Brexit.

They can be downloaded here:-

Post-Brexit regulation

Trade agreements

WTO Schedules and Concessions

A European Economic Space

Liechtenstein reprised

Alternatively, a full list of monographs can be found on this page of the Leave Alliance website.

All are well worth reading, setting out some of the issues we will need to face when negotiating our exit from the EU.

 

 

BREXIT – Onwards from the Referendum by Edward Spalton

(This article was written for our Chairman’s local newspaper, the “Three villages” magazine)

The leading campaigns on both sides of the EU referendum were lacking in honesty. In that, they followed the example of successive British governments which have all pretended that the European project concerned the economy (“The Common Market”) when it was always about developing a single European government under which the nations of Europe would be subordinated in a new polity. We know from official documents that the government understood this from 1960.

The Remain side presented the EU as being about the economy and the Leave side emphasised the cash savings from leaving. Both exaggerated greatly.

In 1971 the Foreign Office advised the government “…there would be a major responsibility on HM Government and on all political parties not to exacerbate public concern by attributing unpopular policies to the remote and unmanageable workings of the (European) Community”. The referendum was the last hurrah for this long-maintained policy of deceit. The leaders of all the main parties stuck to it and lost. So we are now moving in a new direction and the impetus has come from the people not from the political establishment.

Mrs May has said that “Brexit means Brexit” but people are naturally apprehensive about how things will develop. There are three main approaches to forming a new relationship with our European neighbours:

  • The Bilateral Option – An agreement or series of agreements negotiated individually, as Switzerland has done. This takes a very long time – 16 years for the Swiss.
  • The WTO Option – To have a minimal agreement with the EU and to rely on the rules of the World Trade Organisation. This would involve paying tariffs on certain classes of goods exported to the EU (and vice versa) but would be very cumbersome if it was not accompanied by a Mutual Recognition Agreement on quality standards, allowing containers to pass EU customs without having to be individually inspected(and vice versa).
  • The EEA/Efta Option.  This is sometimes called “The Norway Option”. EEA stands for European Economic Area and Efta for European Free Trade Association.

Effectively this is inside the “Common Market” but outside  the EU political union. Britain is free from most EU policies including Foreign & Security, Justice & Home Affairs, Economic & Monetary Union, the EU Court of Justice, the Customs Union, Common Trade Policy, Common Fisheries Policy, Common Agricultural Policy.  But we would have to observe the rules of the Single Market. Contrary to the general belief it is possible for EEA countries to impose their own restrictions on excessive inward migration of EU citizens under Articles 112 and 113 of the EEA agreement.

Some 80% of EU regulation on trade is now adopted from global bodies such as the UN and WTO. EU membership keeps Britain from having a voice there. So paradoxically, EEA states, which are not EU members, have a bigger direct say on many EU regulations than EU members which are bound by the “Common Position” decided by the EU Commission.

By Googling “FLEXCIT” you can get a full description of how the EEA/Efta option might work. The short version is 48 pages. The full document is over 420 pages. The government may, of course, choose to combine some elements of these three listed options. Things are more complicated than the sloganeering of the referendum suggested but, given careful thought and steady purpose, there is not really anything to fear.

 

 

The case for the interim solution

Whatever your thoughts on how best to exit the EU, this helpful paper is well worth reading. Although published by the Adam Smith Institute, it is a collaborative effort, also involving Dr Kristian Niemitz, poverty reserach fellow at the Institute for Economic Affairs, the country’s oldest free-market think tank, and Roland Smith, who is a widely-read blogger as well as a fellow at the ASI.

The principal argument of the paper can be summarised as follows:-

  • Re-joining EFTA to access the EEA is only a short-term compromise
  • It does, however, allow us to make a quicker departure from the EU than a bespoke arrangement
  • We would immediately be outside the political EU project, with a relationship based on trade only
  • We would not be required to join the Schengen area (a myth which I had to counter a couple of times in referendum debates)
  • It would keep business happy – some of whom voted to stay in the EU because they wanted access to the Single Market but who may not have supported the political aspects of the EU project
  • We would have power to reduce migration from the EU
  • Parliament would regain power over, among other things, agriculture, fisheries, foreign policy, law & order and VAT
  • We could conclude our own trade deals with non-EU countries
  • We would regain our seat on those global bodies which increasingly determine the rules for world trade
  • We could choose to participate in EU projects which may be of benefit, such as the Erasmus student exchange system, but not in those which were not in our interest
  • We could move on and leave the EEA at any future point of our own choosing

Above all, as the authors point out, it would help heal the wounds  caused by the Brexit vote. It won’t satisfy everyone but would help the country move forward together.

The slow road to Brexit

It will be several months before the UK government invokes Article 50. Open Europe‘s daily briefing stated today that Theresa May has confirmed to her Danish and Dutch counterparts that the UK will not invoke Article 50 until 2017 to allow all member states time to prepare for the negotiations.

The exit route remains equally unclear. An article in today’s Guardian features an interview with Elisabeth Vik Aspaker, Norway’s European Affairs Minister, who seemed to cast doubt on whether the UK would be welcome back into EFTA. Her concerns centre around the changes to the dynamics of EFTA that would inevitably take place if the UK re-joined, which would make it by far the largest of a group of five countries, overshadowing Norway.

However, the Guardian‘s piece, taken from the Norwegian newspaper Aftenposten, is not the whole story.  A group of senior Norwegian Ministers are due to meet with David Davis, the Brexit minister  in the next few weeks and it is inconceivable that the EEA/EFTA subject will not be mentioned. A perceptive piece by Dr Richard North says that so far, there have been no formal indications from the UK that it wishes to re-join EFTA. However, in spite of positive noises coming from Iceland, all four countries have a veto, so there is no guarantee that we wold be allowed to re-join.

A Norwegian veto may be pretty unlikely, however, as Dr North points out, because there are many politicians in that country, particularly on the political left, who want something better than the current EEA arrangement and would support the extra clout that a large country like the UK would provide for the non-EU countries of Western Europe in future negotiations with the EU.  The negative take by the Guardian is therefore far from the full story.

For those many activists who put so much effort into achieving the historic result on June 23rd, this lack of progress is frustrating, but behind the scenes, things are definitely happening.  Specialist staff are being recruited by the Civil Service to handle the Brexit negotiations; your scribe met one person only last Sunday who applied for one position.

We do at lest have the consolation of knowing that, in spite of the publicity given in the aftermath of the referendum to a handful of leave voters who regretted their choice, the electorate has accepted the result. Polling by You Gov gave 52% support for Brexit – the same percentage as voted to leave on 23rd June. A majority of voters still see leaving the EU as the right thing to do.

One interesting twist in the Brexit story emerged a couple of weeks ago. The former Italian Prime Minister  Giuliano Amati, claims that he wrote the wording of Article 50 in the Lisbon Treaty, but only intended it to be “a classic safety valve that was there, but never used.”

Signor Amati belongs to the “Make Britain suffer” school, who believe that we should be made an example to stop other countries following us out of the door. Thankfully, present political leaders, including Germany’s Angela Merkel, have so far sounded much more pragmatic, recognising that a smooth divorce is in the best interests of business on both sides of the Channel.

Furthermore, there is a flaw in the thinking of people like Amati. If the EU is such a good thing, should we not be pited rather than punished for voting to leave?  Why should the EU institutions be scared about other countries following us out of the exit door if this project is so wonderful? His statements underline the harsh reality that there are few successors to the EU visionaries of 40-60 years ago who truly enthused about the project.

Certainly, in the UK, there was no one of the stature of Heath or Jenkins  to swing the vote as they did in 1975. Remainers were more concerned about not rocking the boat rather than looking forward excitedly to yet more power being handed over to Brussels. It is not just over here that enthusiasm for creating an United States of Europe is waning. The harsh truth is that the EU project is becalmed. It is becoming, in the words of Andrew Duff, a former Lib Dem MEP a “Never-closer Union”. A Yugoslavia-style disintegration would be a most unpleasant affair, but Amati and other European politicians who called Brexit a “disaster” need to face up to the fact that a gradual piecemeal dismemberment may be the best future for this failing attempt to create an unnatural federal superstate.

The benefits of Brexit via the EFTA Route

A fast track two-step Brexit, starting with EFTA Single Market + Opt Outs and then negotiation a Free Trade Agreement could accelerate the UK economy and living standards within 12 months. The European Free Trade Association (www.efta.int) , including Norway, Switzerland, Iceland and Liechtenstein enjoy standards of living almost 40% higher than the UK, and also have an economic arrangement with the EU. The Single Market countries have an opportunity to use article 112 and 113 to control immigration, for example:

  • New Eastern European immigrants only get a 1 year working visa, no children, and a points skills system for staying longer ( so reducing downward pressure on wages)
  • Any other Single Market country, has free movement, unless their unemployment rate is 7% or more, in which case, new immigrants only get a 1 year working visa, no children, and a points skills system for staying longer ( so reducing downward pressure on wages)
  • Anyone with a non-UK passport wishing to buy a residential property needs to have lived in the UK for over 5 years ( so reducing rent and house price rises)

Increasing prosperity for the many by:

Ensuring wages rise faster than rents and house prices, so increasing disposable income and spending in the economy

This could be implemented now.

Q: What are other hidden benefits from upgrading to democracy, from our current EU membership?

A: The hidden costs of EU membership can be reduced and realized with self-government, including:

Business – better business cash-flow, since with economies controlled by large cartels, who can pay suppliers late and cash flow problems, then with easier entry into markets, smaller companies can also gain profits in the supply chain, enabling more investment and more even spread of pay, so reducing government benefit spending and so lower taxes

– The EU poor role model will be eliminated, of endless meetings, duplication (e.g. another Parliament in Strasbourg), poor communication, interfering without expertise (e.g. landlocked countries having influence in fishing industry countries), long decision making time, only top down ideas instead of listening to ideas at all levels, wasting public money on big projects that cost more than benefit, groupthink with censorship of other ideas and other problems

– decentralizing of power, could help to also have less large cartel companies – maybe demergers – and more smaller/medium size companies, so helping innovation and productivity increases, and so pay

– incomes rising faster than rents and house prices – so more disposable income, including lowest paid people, instead of current policy of rents and house prices rising faster than pay

Helping low income countries – low income countries could benefit as EU the is protectionist, for example only allowing raw coffee beans into the EU from Africa, to protect EU coffee roasters, so preventing African countries moving up the value chain by adding value and raising standards of living

– easier ability for Eastern European countries economies to grow as controlling new immigration will help keep skills in their countries, including management skills, engineering, legal, building, scientists, health, entrepreneurs, businesspeople

– shift world centre of gravity to democracy and people’s vote makes a difference, in making, amending and repealing any laws

– less interference and distortion in elections in countries, since with less aid money, those politicians in power can get credit at elections for money that came from outside, so deluding people into thinking policies are working, so less aid can help with better policies and less corruption

– better human rights, since respecting boundaries leads to better human rights, for example after the end of communism, people found that those countries that did not respect private property rights (Communism) had a loss of life in the 10 millions, while those that did respect private property rights (military dictatorships) had a loss of life in the 10,000s – all terrible losses – a significant difference

Better government – less corruption in government, with lack of accountability with some EU spending, thus being a poor role model in countries, where public prefer honest government, and no corruption

– better value for taxpayers money, with more competition, as the EU public procurement directive results in lots of new paperwork that small companies cannot afford, so don’t bid anymore

– better global regulations, as individual countries can lobby for regulations which make sense for the UK economic sectors

– higher morale in public sector organisations with regulations that suit the service being provided and less people are promoted with political connections –like the EU system – and more with merit

-less government debt and lower taxes, as less money is used for big projects that are wasteful experiments

– public can look up to their leaders, instead of now, where people look down on leaders – as the EU Parliament is more important than national Parliaments, so restoring self-government could alos help with better people going into politics

– simpler regulations, since the regulations made are only relevant to each country, and not a one-size-fits-all

– maybe help with children’s attention in schools, as countries have noticed a fall in education standards and respect for teachers and adults, since joining the EU. EFTA countries haven’t had many such problems

– less vote buying by politicians, since the EU has signs saying ‘funded by the EU’ when in fact, the money either comes from the country itself or from another country, who does not currently get recognition for aid

– new ideas looked at, since the ‘one party state’ thinking is gone and the ‘EU mind guards’ are gone, so simple questions like ‘what did we change?, what did we used to do?, what do other countries do?, what off-the-shelf alternatives are there? How are we evaluating the positives and negatives of any changes? Who benefits from the previous changes, who loses?’ can be asked.

– with the top-down thinking from the EU gone, people could feel free to suggest ideas again to managers and team members – instead of thinking it would be  a waste of time – so helping improve service, quality, productivity and morale

– better chance of politicians listening to people’s opinions including the majority opinion, since the EU role model is poor with, for example, the UK only having 10% of seats, so 90% have other interests – so with self-government, 100% of politicians make the laws, and avoid special interest groups/cartels overruling majority opinions

– ability to have direct democracy, petition/referendum, since the results cannot be overruled by the EU

– each country is a unique ecosystem, with unique history, culture written and unwritten rules, evolving in its own way

As we can see from government actions, that spending on ‘white elephants’ to give contracts to cartels is still happening even after

In short, liberty is something that cartels of power, economic size and wealth do not easily release, so taking the initiative with promoting an alternative, EFTA, and a step-by-step approach to local MPs and media, can help the Brexit process speed up and realise benefits soon for all income groups, and the people who voted Brexit.