Annual UK/EU trade deficit soars to £56 billion


In response to a written question from the independent Labour Peer, Lord Stoddart of Swindon (Hansard 02.12.14), the Government has confirmed that the UK’s annual trade deficit with the EU has soared from £28.5 billion in 2010 to a colossal £56.5 billion in 2013.

Responding for the Government, the Minister of State at the Department for Business, Innovation and Skills & Foreign and Commonwealth Office, Lord Livingston of Parkhead said: The UK’s trade deficit with the European Union was £28.5bn in 2010, £21.7bn in 2011, £39.5bn in 2012 and £56.2bn in 2013.

Commenting on the Government’s response, Lord Stoddart said: “This massive trade imbalance graphically demonstrates that more than 40 years of EU membership has done nothing for our economy and for jobs. It also demonstrates that the situation in recent years has dramatically deteriorated with the deficit very nearly doubling in just four years. It is quite clear that EU membership is a millstone around our country’s economic neck.”

The full text of Lord Stoddart’s question and the Government’s reply is as follows:

Hansard 02.12.14
UK Trade with EU

Question Read more

National Self-confidence

As predicted, David Cameron’s much-vaunted speech about immigration was a damp squib – anything but a “game changer”. Given that the Prime Minister is believed to have cleared the speech with Auntie Angela in Berlin beforehand, anyone hoping for a seriously tougher line was inevitably going to be disappointed. Furthermore, No. 10 is widely believed to be close to Open Europe and their research suggested that Cameron might get away with restrictions on access to benefits by immigrants from the EU but even a temporary cap on migration levels would run into opposition, let alone talk of an end to the principle of free movement of people. This is exactly what we got (or didn’t get) from Mr Cameron

Whether this speech will satisfy UKIP supporters or wavering Conservative voters is another matter. However, it has resulted in a number of supporters of EU membership coming out of their holes. Take Pat Macfadden, for instance. Writing in The Guardian, he says that “leadership is about standing up for Britain as a confident outward-looking country open to people, ideas and investment and keen to be a leading player in the EU and globally.” In other words, he equates national self-confidence and a worldwide outlook with EU membership. Supporters of withdrawal are, to quote Mr. Macfadden, “looking for a rewind button to a world that no longer exists.”

This is pure codswallop. It was precisely because we lost our self-confidence that we joined the EU. Dean Acheson, the US foreign Secretary, famously said in 1962 that “Great Britain has lost an Empire and has not yet found a role.” By the end of the decade, we were fast becoming “the sick man of Europe”, Union militancy and a lack of innovation caused our economy to lag behind those on the continent. Joining up with these dynamic countries on our doorstep was seen as a way of restoring our confidence. However, it was the Thatcher reforms, not the EEC (as it then was), that put us onto a path back to growth and restored our image at home and abroad, while at the same time, the dynamism of much of Continental Europe began to peter out. We were self-confident enough to see the pitfalls of joining a single currency and kept out. We are now self-confident enough to know that we can prosper outside the EU. After all, a number of successful European nations are not EU members and they have no intention of joining. These countries cannot remotely be accused of narrow introversion. Norway gives the highest percentage of Gross National Income in development aid of any country in Europe while Switzerland hosts a number of international organisations including the World Health Organisation and the International Labour Organisation.

Only one has wobbled recently – Iceland. Significantly, it was when their banks collapsed, along with their national self-confidence that this small country briefly gave serious consideration to join the EU. It was a painful time, but now they have pulled through, their self-confidence has returned and accession talks with the EU have been kicked into touch.

It is worth reminding Mr Macfadden that it was the lack of confidence in the concept of the nation state following the Second World War which gave birth to the idea of the EU – a defeatism that never caught on in this country and hasn’t done so in the rest of the world. Look beyond Europe and you will see that the EU with its “pooled” sovereignty is a weird abnormality

As Mark Reckless said in his acceptance speech in Rochester a week ago, “the world is bigger than Europe.” Indeed. Free form the EU, the UK will prosper. We can take our place again on international bodies such as the World Trade Organisation. We can strike free trade agreements with the growing economies of the world like China and India without having to wait for the EU to do so on our behalf.

And as for the “rewind button to a world that no longer exists,” it is the Europhiles who are locked into the past. The EU came to birth in an age when unwieldy bureaucratic international organisations were seen as the solution to the world’s problems. As the eurozone’s recent dismal economic performance proves only too well, they have instead become part of the problem. Lord Lawson was quite right when he stated that the EU was “past its sell-by date.” Things have moved on since the Treaty of Rome was signed in 1957. Unfortunately, Macfadden and his ilk don’t seem to have noticed.

Negotiating Independence

By Edward Spalton.

This article first appeared in Freedom Today in spring 2014.

Whilst independence campaigners of other parties might prefer to use a different phrase, what they hope for is not far off the “amicable divorce” from the EU, advocated by Nigel Farage. Such a settlement will demand clear thinking, strenuous negotiation and unshakeable political will. Whilst many have a deep-seated loathing for our subjection to the EU, we should remember that it has taken nothing from us which was not freely surrendered by our governments of all colours, officials and parliament.

We should reserve our major suspicions for them and approach the institutions and personnel of the EU with steely objectivity and diplomatic courtesy.
To do that, it may be necessary to create an expert task force or “Department of Disentanglement” separate from the Foreign Office which, for two generations, has been stocked entirely with Europhiles.

The EU is an institution of laws – tens of thousands of them – but it will break even the most supposedly sacrosanct to secure its existence. When the euro was introduced, the treaty specified that no member state could ever be made responsible for the debts of another. Yet as soon as crisis struck, the principle was instantly jettisoned before any legal change had been made. We are dealing with an institution which is primarily one of political will, not law. The laws are invoked only in support of the project . So caution is essential and suspicion of Article 50 quite reasonable.

To achieve a new politically independent trading relationship with the EU countries, there are various considerations surrounding Article 50 .
Firstly, international law does not generally allow the existing or new internal constitutional requirements of contracting states as a valid reason for non performance of a previously agreed treaty. The article does. Secondly, the Article appears to be a lex specialis – an agreed provision of a treaty which therefore takes precedence over general rules such as the Vienna Convention. Thirdly, for an EU document it is remarkably straightforward , specifying a clear procedure, including an obligation to negotiate a future relationship within the not unreasonable period of two years.

It is unrealistic to expect that the member state which has given notice to leave should also be privy to the discussions within the EU institutions on the matter. You cannot expect to sit on both sides of the table at once. You cannot simultaneously be buyer and seller.
We will not be going like Oliver Twist to ask the President of the European Council, “Please Sir, may we have our country back?” and then waiting for two years to see what the EU offers. We must go with a well-prepared negotiating position of highly specific, reasonable requirements and keep the initiative at all times.

In extricating the country from foreign bureaucracy, we do have experience from history. The Acts of Praemunire prohibited English subjects from taking cases to foreign courts, Henry VIII ‘s Act of Supremacy and Act in Restraint of Appeals established beyond a peradventure that “The King’s Majesty hath the chief power in this Realm of England and other his Dominions…. and is not, nor ought to be, subject to any foreign jurisdiction”. It was not mere coincidence that these Acts were repealed or rendered dead letters in the run up to our accession to the EEC.

Acts of Parliament still derive their sovereign force from the prerogative power of the Crown in Parliament, “The Queen’s Most Excellent Majesty”. There should be a comprehensive modern Act with the same effect and intent . Such an Act would be a deterrent against new EU Regulations or requirements being sprung on us during negotiation. It should also provide dissuasive penalties for anyone, particularly British officials, trying to circumvent it – though probably not quite the same ones as Henry VIII ‘ s !

Armed with such a safeguard at home, capable of being invoked if necessary, negotiations could proceed, more or less on an ex gratia basis, but in outward conformity to the Article – working, as it were, with the grain of the treaties. To tear up a treaty as a claimed sovereign right might be popular in the saloon bar but would not impress at the bar of any international tribunal or indeed overseas public opinion.

Like it or not, international trade is now regulated by myriad rules. Whilst many of them come from bodies like the United Nations or the World Trade Organisation, Britain is contracted to them through the EU because we outsourced our negotiating power to it. As businesses have spent huge sums of money to comply with these rules, they rightly need assurance that Britain’s new arrangements with the EU will not cause them any disruption or place British products and services in a position of dubious international acceptability or disadvantage. Our suppliers and international creditors need to have similar assurance that their interests will be respected and their investments safe. Such considerations are essential, if the divorce is to be amicable and the outcome prosperous.

To win any referendum against the inbuilt advantage of the status quo, people have to be convinced that there is an attractive, credible, working alternative which will secure their jobs. There is no doubt of that. Something like the Norway Option has great presentational advantages. It already exists prosperously. It would not be the end point. Just as the EU project moved from the Coal and Steel Community to the Treaty of Rome, so further advances towards fuller independence can be made from that platform. But we have to persuade people to take the first step.

Incompetence or treachery at home is more greatly to be feared than the EU. The Romans remarked that slaves came to love their chains . Our civil servants have become very comfortable in EU servitude and out of the habit of drafting primary legislation. The effects of a botched renegotiation, combined with adverse economic circumstances, could see a future government panicked into crawling back by invoking clause 5 of Article 50. Now that really is to be feared!

With grateful thanks to Lord Stoddart of Swindon and Petrina Holdsworth for political and legal advice. All mistakes are, of course, entirely the author’s ownEdward Spalton 20 May

Dyson, Paterson:- the momentum is building

A decade ago, supporters of EU membership might have got away with dismissing their opponents as mavericks and eccentrics whose objectives were opposed by all the big names in politics and the business community. Not any more. In the last few days, one of Britain’s leading entrepreneurs and a former Conservative Cabinet minister have both come out in support of withdrawal.

Sir James Dyson was interviewed on Radio 4’s Today Programme last Friday about his plans to make a considerable investment in the UK. During the course of the interview, the subject turned to the EU. Does Sir James want the UK to stay a member? “Not particularly; No”, he replied. He did not want to be in an EU which was “dominated or bullied by Germany.” He added that “in our particular field we have these large German companies who dominate standard setting and energy reduction committees, and so we get the old guard and old technology supported and not new technology.” Sir James also mentioned his support for EFTA.

Another important business figure, James Bardrick of financial servies group Citi UK was not so keen on withdrawal. In an interview with City AM today. he said he would prefer “to make the EU work better and more productively.” However, he did not view withdrawal with foreboding. “We’d have to make changes to our operating model to reflect some of the increased inefficiencies that being outside the EU would throw up, and there is no doubt that would lead to changes in the way we have to deploy some of our resources, both financial and people,” he said, but “we can cope if we have to cross borders between the UK and the EU.” These are perhaps the most laid-back words to date from a senior UK banker and proof that even if some big businesses would prefer us to stay in the EU, withdrawal would NOT be the calamity that some claim.

Also today, hot on the heels of Sir James’ welcome support for withdrawal, Owen Paterson, the former Environment Secretary, stated that the UK government should invoke Article 50 of the Lisbon Treaty, which is the mechanism by which a member state withdraws from the EU, if the Conservatives win next year’s General Election. Mr Patterson was making the obvious point that closer eurozone integration would inevitably force the UK to re-define its relationship with the EU as the status quo cannot be a long-term option. “The eurozone has already embarked upon a path that we can never follow,” he said. “We are simply recognising that reality. We must either be fully committed to ‘Le Project’ or we must build an entirely new relationship.”

Such comments from someone who was until recently such a senior figure in the government are unprecedented and a refreshing change from Mr Cameron’s prevarication. However, Mr Paterson also laid down a challenge to fellow supporters of withdrawal, stating that voters could opt to maintain the status quo unless they are given a “clear vision of what life outside the EU would look like”.

These are wise words. Enthusiasm for the EU has never been that strong in our country, but the bottom line is that we’ve been a member state for over 40 years. There are many among the UK public who still need to be convinced that unpicking that relationship is worth the effort. They especially need convincing that it can be done without hurting our economy. Still, where there’s a will, there’s a way and the support of both Sir James Dyson and Owen Patterson cannot but be to the advantage of those like Dr Richard North and Robert Oulds who have already done so much to devise an exit strategy that will chart a viable path out of the EU where we can reap the benefits of freedom from interference by Brussels (and domination by Germany) without suffering the economic consequences that many still fear.

The hard facts on immigration

Concerns about immigration have been widely reported in coverage of the Rochester and Strood by-election. Mark Reckless found himself at odds with his new party’s official position when he appeared to suggest that he favoured repatriating European workers who had settled in Britain. A recent opinion poll suggests that repatriation has the support of 1 in 4 of the electorate. Certainly in Rochester and Strood, Mr Reckless’ comments have won him some support. The Buzz Feed news tracked down a number of voters in the constituency who were unashamed to admit that they would like at least some immigrants to go home. “I like the idea of sending them back” said a Mr Gilkes, who admitted that talk of repatriation had made him more likely to vote UKIP. According to The Times, research by YouGov has found that 90% of UKIP voters are likely to say immigration has been bad for Britain and 58% that immigration has been bad for them and their families.

While some commentators on the Left are horrified that anyone can express opinion like this in 2014, they are naïve to think that passing equality and diversity legislation alters the way people think – particularly in the face of immigration on such an unprecedented scale. Given that the same YouGov survey found that 55% of all voters consider immigration to have been bad for Britain, it is unsurprising that both the Tories and Labour have been toughening up their rhetoric and talking of restricting either benefits of immigrants or immigration itself in an attempt to stem the flow of support for UKIP.

Of course, immigration is not just an EU-related issue, although we do have the power to restrict immigration from outside the EU. However, even if non-EU migration was stopped totally, it would not allay the anger about child benefit being paid to workers from the EU whose family remain in their native country nor the money being paid to unemployed foreigners.

So what options does David Cameron have when it comes to persuading the rest of the EU to change the rules? Our Prime Minister is no doubt aware that concern about immigration is one of the big factors likely to increase support for EU withdrawal. The Open Europe think tank, although taking a totally opposite line from the Campaign from an Independent Britain on whether we should leave the EU, has recently posted a helpful analysis. A paper by Stephen Booth and Professor Damian Chalmers suggests that it would be possible within existing EU treaties to restrict access to benefits, social housing and publicly funded apprenticeships for their first three years in the UK. They also propose that while EU citizens would have a right to access public healthcare within their host country, for the first three years, the costs would be borne by their state of nationality. David Cameron is widely believed to be on close terms to Open Europe, so these suggestions may well be points he seeks to renegotiate.

However, they do not address the big issue for many voters, which is to end the right of citizens from other member states to live and work elsewhere in the EU. Open Europe reckons that even an “emergency brake” – a temporary cap on migration levels will be a challenge. “He may just achieve it,” says their blog, as “there are precedents for brakes in other areas in the EU treaties and there is increasing awareness across the Continent that public concern about free movement is contributing to the EU’s unpopularity.” However, going beyond this – for instance insisting on permanent quotas on the number of EU migrants or introducing a points-based system – is likely to be one step too far. To quote Open Europe again, “it would involve fundamentally rewriting the EU treaties and unpicking one of the founding principles of EU membership. There is likely to be little or no political appetite for such a move among other EU countries.” Given that Angela Merkel, the most powerful political leader in the EU has said that she would rather see the UK leave the EU than compromise on the principle of free movement of people, it is very apparent that David Cameron’s hands are tied before the serious attempts at renegotiation have even begun. If the British electorate is determined to bring to an end the principle of free movement of people, then withdrawal from the EU is the only way whereby their wishes can be granted.

Having said that, withdrawal will not automatically give us total immediate control of our borders, assuming we withdraw by invoking Article 50 of the Lisbon Treaty and remain within the European Economic Area. We could certainly follow the example of Liechtenstein, which has availed itself of the right to restrict residency of EU citizens under Articles 112, 113 and Protocol 15 (articles 5-7) of the EEA agreement, but it would only a restriction, not a complete end to the rights of some EU citizens to move to the UK. The EEA route may therefore not satisfy the more strident opponents of free movement, but it is not only the least disruptive method of securing withdrawal from the EU but also the best option to present in any future referendum if we wish to secure an “out” vote. Furthermore, remaining in the EEA is viewed by most of its advocates as an interim state for the UK while a looser longer-term relationship is negotiated. Of course, dealing with the issue of free movement in these negotiations will be up to the government of that day. Any discussion of this subject would need to take into consideration the concerns not only of the indigenous UK population but also the UK EU-resident UK expatriate community, who may not take too kindly to being presented with the alternative of either returning to cold, grey Britain or becoming citizens of Spain, France or wherever.

In this article, CIB has sought to set out what our options will be. The Organisation recognises the concerns felt by many but has no official position apart from a firm belief that, as in other areas of national sovereignty, policy on immigration should be determined by a democratically elected British parliament and not by the EU.

A voice from the past still locked in the past

Following on from Gordon Brown emerging from oblivion to rescue the “No” campaign in Scotland, Sir John Major has returned from obscurity to tell a foreign affairs think tank in Germany that there was a 50/50 chance of our country leaving the EU. On that he was probably right. Those of us who desire such an outcome recognise that we’re a long way from having it in the bag. It’s going to be a long, hard battle to secure “Brexit”. However, our former Prime Minister was profoundly wrong when we went on to say that our country would sink to a much lower level of relevance if we left the EU. How relevant are we? It is actually quite bizarre that other nations see us as relevant at all when you think how little power we really have. This has been all too cruelly exposed by the recent demand by the European Commission for the UK to pay an extra €2.1 billion into the EU budget. David Cameron’s initial response was to state he would refuse, but this proved to be only grandstanding. At the end of the day, although George Osborne claims to have negotiated a reduction, the bottom line is that when a foreign, unelected bureaucracy tells us to cough up more money, we are powerless to tell it where to go. There are countless other examples of our powerlessness. We don’t have the freedom to strike our own free trade agreements with other countries – indeed, we don’t even have the freedom to determine how our bananas should be labelled!

The idea that you can only be relevant in the modern world by giving up the power to govern yourself seems very odd when viewed from an international perspective. It has certainly not caught on outside Europe. China, Japan, Australia, Canada, Russia and the USA – to name just a few – have no desire to “pool” their sovereignty with their neighbours and who can blame them when they look at the EU and the ongoing crisis in the Eurozone?

So it’s understandable that many in the UK are distinctly unimpressed with the EU – even if many people still have no idea that the objective has always been to create a federal superstate – an United States of Europe. If our politicians were urging us to join the EU now, it is inconceivable that they would win a majority in favour of accession. However, we’re in and the difficult bit is how to devise a foolproof strategy to get us out which will preserve our trading arrangements and avoid job losses in the short term. Thankfully, a number of eminent researchers including Dr Richard North and Robert Oulds of the Bruges Group have put in some considerable work on creating a “road map” and it is definitely feasible. Once we are out, we will actually become more relevant in the world. We are still likely to remain one of the biggest 10 economies in the world for a good few years to come and will be free to redirect our trade towards the world’s growing economies instead of being so tied to the sclerotic eurozone. The use of English as the common language of world commerce will still work to our advantage and we can repeal countless EU-inspired rules and regulations that inhibit our attractiveness for foreign investors. We will not need to become involved in overseas problems of no real interest to us such as the current conflict in Ukraine. We could use our weight to reinvigorate EFTA, the European Free Trade Association, as a genuine free trade-only alternative to the EU. Our finance industry in the City could resume the levels of growth seen before regulation was handed over to Brussels by Gordon Brown when he signed the Lisbon Treaty so we could once again be a world leader in this field, alongside Hong Kong and Singapore. We could also determine who (if anyone) should be allowed into this country rather than being forced by the EU to open our borders to all and sundry from 27 other countries, some of whom we have very little in common with.

In short, the EU, like John Major, is past its sell-by date. It was brought to birth in the post-war era when it was believed that big international institutions could solve all the world’s problems. Time has showed that these institutions and the unelected “experts” that lead them have instead become part of the problem. Re-establishing our national sovereignty will therefore be shaking off an encumbrance – an event akin to the collapse of communism in Eastern Europe 25 years ago. Like those momentous scenes in 1989, withdrawal would be an occasion for celebration and in no way would it herald any reduction in our relevance as a nation on the world stage. Let us ignore the John Majors of this world, locked into an obsolete mindset. The future is freedom. The future is independence.