Brexit roundup – short-term problems; longer-term potential?

With Parliament  still in the Easter recess, things have been a bit quieter than usual on the Brexit front. However, the well-supported fishing protests last Sunday suggest that we are going to be entering a  period in which the Government will face ever-mounting pressure to try a different approach to securing some sort of workable short-term post Brexit arrangement.

The long term is not looking promising either. Given how readily Mrs May and David Davis rolled over, what is the likelihood of their resisting demands from Michel Barnier that the UK sign a “non-regression” clause in any long-term agreement, which would force the UK not to undercut EU standards on tax, health and the environment to poach investments. He has also insisted that access for EU fishing vessels must be included in any long-term deal. The “environment” issue is a red herring as many EU environmental laws owe their existence to UK influence, but why should we not determine who fishes in our waters? Why should we be denied the freedom to cut tax? The state in the UK is horrifically bloated, as in most other Western nations.  It needs to be shrunk drastically and were this to be undertaken, taxes would inevitably undercut those in many EU member states.

Going back to the transitional arrangements, a report from the House of Commons Brexit Committee has confirmed that if a “deep and special partnership” with the EU proved unsuccessful, EEA/Efta membership was an alternative that could be implemented quickly. Although the Committee is looking at EEA/Efta as a long-term solution (which it isn’t)  it would be a better alternative than the current proposals for the short term, which poses the question as to why Mrs May and her team are pursuing such a damaging alternative. Maybe they still believe that it’s worth enduring 21 months of humiliation because  there will be a marvellous deal at the end – a hope which is unlikely to be fulfilled. Barnier’s comments make it clear that he wants to deny us as much long-term freedom as possible.

A number of Commonwealth countries have been discussing a future trade relationship with the EU. The Canadian Prime Minister Justin Trudeau has said that it would be “fairly easy” to negotiate “an improved approach on trade between Canada and the UK” after Brexit. The same article claimed that India is becoming less enthusiastic, no doubt due to  the recent statement by Theresa May that she still intended to reduce annual net UK migration to less than 100,000, meaning that India’s desire for more of its citizens to come over here as part of a new trade deal is unlikely to be fulfilled. Australia is also keen to start negotiations with the UK on trade, but pointed out that  if we stayed in the EU’s customs union after Brexit, we wold become “irrelevant”.

Meanwhile, disgruntled remoaners are still seeking to over turn Brexit by demanding a second referendum.  For all her failings in other areas of Brexit, at least Mrs May is standing firm on this. “Regardless of whether they backed Leave or Remain, most people are tired of hearing the same old divisive arguments from the referendum campaign, and just want us to get on with the task of making Brexit a success. And they’re right to think that. The people of this country voted to leave the EU and, as Prime Minister, it’s my job to make that happen.” she said in a recent speech to mark one year until Brexit day.

Mrs May is most definitely right in claiming that most people have had enough of Brexit controversy. Claims that some 44% of voters want a second referendum do not tally with real-life experience.  Given that the poll was conducted by a pro-remain group, Best for Britain,  a healthy degree of scepticism is justified. Mrs May has the support of Jeremy Corbyn in opposing a second referendum and it is doubtful whether those activists on both sides of the argument who spoke in debate after debate, criss-crossing the country and having to suspend anything resembling a normal life for three months would want to go through it again.

The clamour is coming from those who wouldn’t have to do the donkey work. The latest addition to the ranks of these good-for nothings is David Miliband, who called Brexit “the humiliation of Britain.”  Well, Mrs May does seem to be trying to do this at the moment, but a decent Brexit would be the absolute opposite – a chance to stand tall as a sovereign nation once again. there’s nothing humiliating about this.  One after another, the fears stoked up by remoaners are being debunked. The UK economy has performed well since the vote and only today, Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, stated that despite attempts to lure parts of the finance industry to Paris or Frankfurt, London would remain Europe’s financial hub after Brexit.  A mass exodus from the City was always a concern during the referendum campaign, but such fears are unfounded.

In many ways, a healthy debate on how we leave  – i.e., the relative merits of the current transitional proposal versus EEA/Efta as a holding position will take the wind out of the remoaners’ sails and would cut their media exposure in favour of more important issues. However, one cannot overstate the importance of winning this debate. Brexit must mean Brexit (to quote Mrs May). Surrendering to the EU’s demands for a transitional deal would prevent us fully achieving the separation for which we voted in June 2016. This must not happen.

How Britain Leaving the EU Could Affect the Single Currency

In 2016, the majority of UK voters opted to leave the EU. A lot of people, fuelled by the opinion of the mainstream media, seemed to be disappointed with the referendum vote due to this common sentiment: Brexit will bring nothing but tough times.

However, when you look at the numbers, it is clear that the UK is already at an unfair advantage, as Britain is one of the biggest contributors towards the EU budget. In an article by Full Fact it was recorded that the UK pays more into the EU budget than it gets back. The site says that in 2016, the UK government shelled out £13.1 billion to the EU budget, which was more than the forecasted £4.5 billion that the EU spent on the country. In short, the UK’s net contribution was around £8.6 billion, which was used to help develop other countries.

Uncertainty with the Euro

Without aid from the UK, and if a hard Brexit happens, the EU will have to find another country that will generously provide £8.6 billion in order to offset the budget losses. If the EU fails to compensate for the losses, the Euro will most likely become extremely volatile since the European Central Bank (ECB) would need to print more money to provide funding to member states.

Below is a chart that shows the balance of UK contributions, and public sector receipts from the EU budget, which was inflation-adjusted for 2016.

The Economist suggests that only a few British people have changed their mind about whether to stay or go. The polls discovered that should there be another vote, the result would be similar to the 52:48 split last June. The article also mentions that most leavers want a hard Brexit if possible.

A hard Brexit would most likely affect the Euro negatively due to investor sentiment regarding the risks. FXCM notes that global market participants frequently flock to riskier assets, in this case the GBP, in hopes that doing so will generate strong returns. There may be uncertainty within the UK market because of Brexit, but that doesn’t mean that the EU will benefit from it. After all, there is no direct evidence of an inverse correlation of the GBP/EUR, at least not until a final Brexit vote happens. If there’s anyone who would benefit from Brexit, it is the U.S., especially since the greenback has always been viewed as a safe haven against the Euro.

The European Commission is now looking to reduce regional spending by up to 30% in order to balance the budget and keep the Euro’s strength. If the European Commission doesn’t cut regional spending, its other option is to reactivate the EU’s aggressive bond buying program. Whether or not that may happen soon is moot, especially since the ECB’s stimulus weakened the Euro significantly. The EU had already under spent on regional funds before. That being said, it wouldn’t be surprising if this is the route that they will take once again.

Take part in the campaign to make sure that Brexit is not blocked – Email the Lords

Take part in the campaign to make sure Brexit is not blocked

 

Please ask the members of the House of Lords not to oppose, nor water down, Brexit.

Email them to support the European Union (Withdrawal) Bill. Petition the Peers to respect the referendum result and vote the right way.

Ask the Lords to support our exit from the European Union. The referendum of 23rd June 2016 must be the final say on this issue.  The EU should not be led to believe that the UK will settle for anything less than a full exit from the European Union.

The Members of the House of Lords, having approved the referendum, should keep faith with the result.

Ask them to conclude the European Union (Withdrawal) Bill’s passage through the House of Lords without opposing it or seeking to water down Brexit. And above all else without stipulating that there should be a further and thoroughly unnecessary second referendum. Nor should there be an opportunity for the decision to leave to be overturned.

Click here to email individual members of the Lords

This will send an email to your chosen Peer, or Bishop, concerning the EU (Withdrawal) Bill

Recalcitrant MPs:- where do you stand?

This letter was sent out by our secretary, Jim Reynolds, to a number of MPs who recently voted against the Government. It makes the point about democracy very forcefully and offers a useful template to anyone else wishing to contact our elected representatives in the event of future Brexit votes

It is often mentioned that some Eurosceptic MP’s had a majority for ‘Remain in the EU’ within their own constituencies. However, it is never mentioned that some pro-EU MP’s had a majority of ‘Pro-Brexit’ within their constituencies.

Why is this? One can guess.

These facts are actually irrelevant because the Referendum was not fought or decided on a constituency basis. It was fought on the entire 650 constituencies as one single voting area.

If you wish to treat it on a ‘constituency’ basis there were only two Parties involved, one for Stay and one for Leave.

The result was an 80 seat majority for the Leave Party. A huge majority. A true fact.

Let us not forget, it was Parliament itself that voted to devolve the decision on EU membership to us, in our Referendum.

What great principle of constitutional propriety do you stand for when it seems you have been quite happy to see Parliament circumvented and supplanted by the EU for 40 years?

The people who want to reverse a democratic vote result should be aware that this action is otherwise known as Fascism, an imposition against the majority will of the people.

Where do you stand on this?

Yours faithfully,

James Reynolds

Immigration:- putting the cart before the horse?

Last week, the Guardian published a leaked draft of a Home Office document entitled  ‘Borders, Immigration and Citizenship System After the UK Leaves the EU’

It contained the welcome news that the Government is determined to bring immigration down and intends to use the opportunities presented by Brexit to honour – albeit rather belatedly – its pledge to bring net migration down below 100,000.

Given the high profile of the immigration issue during last year’s referendum campaign, it is the least the government can do. In summary, free movement will come to an end on Brexit day. A scheme for seasonal workers will allow our fruit to be picked, but work permits will be time-limited, with those for low-skilled workers lasting only two years, with no right to settle. For all new EU workers, the right to bring family members will be significantly curtailed. UK companies will be encouraged to take on UK workers where possible.  Though it does not give precise details, the document says the UK is minded to introduce an income threshold for some EU citizens before they will be allowed to reside here.

It all sounds good in theory. There are good,sound reasons for slashing immigration. The pressure exerted by migrants is making it harder for native Brits to get onto the housing ladder or, in some places, to see a GP or find a place for their children in a local school. The use of short-term work permits will give the government  – and indeed, business – greater flexibility, especially as advances in robotics will drastically shrink the numbers of low-skilled workers required. Some experts suggest that we will have problems finding work for all the current UK working age population within 30 years. We certainly don’t want to saddle ourselves with lots of migrants whose jobs have been taken by machines but who have a right to stay here.

Of course, a Tory party which has found itself on the back foot since the General Election will be keen to do all it can to rebuild its support and there are plenty of voted to be garnered by being tough on immigration.

Yet the welcome given to this document must be tempered with a feeling that the Government is rather putting the cart before the horse. We know what it wants to do about immigration but very little about its proposed relationship with the EU. We would probably be able to implement most these restrictions as a member of EFTA and accessing the Single Market via the EEA agreement and applying restrictions in the same way as Liechtenstein, in spite of claims by one EU official that  “Limits on numbers of people or categories of migrant worker are incompatible with single market access.” They seem to have forgotten this small Alpine country which invalidates their argument.  Likewise, we would certainly be able to restrict migration if we stormed out of the current negotiations and left the EU in March 2019 with no agreement and some commentators are suggesting that this is seriously being considered.

The EFTA route has thus far not been in favour while walking out would be foolish and lead to the “cliff edge” which we are repeatedly being told the Government wishes to avoid. So what, then, is the Brexit framework into which these immigration proposals will fit?

Furthermore, if the Government is serious about reducing net migration below 100,000, what about immigration from outside the EU? The most recent statistics did record a drop in arrivals from EU-27, but arrivals from the rest of the world stood at 266,000 during the same period. The government could act here and now to stem the flow if it so desired. Then what about illegal immigrants? Will the Government finally get serious and deport them?

So while this document is a step in the right direction, a lot of questions remain unanswered.

 

Brexit: what we want and what we might get

The last week has seen the publication of a number of positions papers by the Department for Exiting the European Union, covering issues ranging from trade and the jurisdiction of the European Court of Justice through to the Irish border. You will find articles which review each position paper on the website.

Of course, what the UK government wants and what the EU will agree to may not be the same thing. Indeed,  at least one commentator is claiming that the position papers do not yet reflect a final government position but are but one side of “an internal debate within the Conservative Party.”

But what do UK voters want from Brexit? A survey by the London School of Economics and Oxford University asked more than 3,000 people for their thoughts – including both leave and remain voters.

The most interesting finding is the unity between remain and leave voters on a number of issues. Barely one third of those surveyed are keen on single market membership, ongoing EU payments, free movement and the jurisdiction of the ECJ once we leave. Significantly, this majority includes a number of remain voters.

Although there is widespread support for a free trade agreement with the EU (88%), 69% want customs checks introduced at the borders – some what contradictory stances!

What is more significant is that this survey offers little support for hard-core remoaners and remainiacs  who wish to stall Brexit. The referendum is now behind us; the majority of the population has accepted the result and wants to see the government make the most of the opportunity leaving the EU provides.

What sort of deal we will get, of course, is another issue. Analysis of the position papers published so far  do not give us any sort of detail about how deals on many areas are going to be concluded. We have seen what amounts to a UK wish list which the EU may well decide to refuse.

Still, amidst all the concerns about the lack of progress by the Department for Exiting the European Union, one good piece of news appeared today. Net migration (immigrants minus emigrants) has fallen by 81,000 from 327,000 to 246,000 in the year to March.  The number of EU nationals coming to the UK fell while over 33,000 more additional EU nationals left the country, including an extra 17,000 from the so-called EU8, the former Soviet bloc countries who joined the EU in 2004. 246,000 immigrants still equates to a city the size of Hull or Plymouth and is well above the Conservatives’ net migration target of under 100,000. This drop is nonetheless welcome. Many individual factors no doubt contributed to it, but Brexit would indisputably have been one of the reasons. Given that one  of the reason for the Brexit vote was a desire to end free movement and thus bring immigration down, it is encouraging to see that it has already had a benign effect – and without the Government even doing anything!

Photo by dullhunk