Log in

Sunday 19 April 2015

000a Telegraph-017 tanks.jpg

If the Telegraph wants to convince us that we face a clear and present danger from Putin's tanks, then it is going to have to do more than publish pictures of WWII vintage T-34 85s, at the 2010 Victory Day parade in Moscow.

One wonders, sometimes, whether the Telegraph editors actually look at the pictures they use.

Richard North 19/04/2015 link

Saturday 18 April 2015

Our provider has had serious hardware problems, resulting in the system being down for all of Friday evening into the small hours. Although the system is back up, they have lost some of the data, including Friday's post on the WTO. This has now been re-posted (on the post below) with additions and revisions. The comments have been saved, and are attached to the post.

Richard North 18/04/2015 link

Saturday 18 April 2015

000a China-017 trade.jpg

The one good thing about the Ukip manifesto - about which we remarked yesterday – is that it accepted that Article 50 negotiations are the preferred option for arranging our exit from the EU. And in calling for a free trade agreement affording us access to the Single Market, the party also appears to be turning its face against the WTO (or "free-for-all") option.

Despite the manifest problems with other aspects of the Ukip manifesto, these two developments are significant, and especially the apparent rejection of the WTO option - the idea that we do not need to negotiate any trade agreements with the EU and can go it alone, under the umbrella of WTO rules. This alone is a major relief, as the enthusiasm for it in some quarters threatens to destabilise the case for EU withdrawal.

One of the converts to this idea is Ruth Lea. She was formerly an advocate of the so-called "Swiss option" (page 27), so she now stands – without explanation - completely at odds with her earlier position. But we have also seen an intervention from Global Britain.

This organisation wrongly believes that major nations such as the USA, India, China, Japan and Australia have no trade agreements with the EU, on which basis it argues that the UK should be free to trade under existing international law using WTO rules. Like Ruth Lea, they believe that when we leave, we do not need to negotiate a trade agreement with the EU.

Their case is built on arguments, as we will see shortly, are fundamentally flawed – resting on an incomplete understanding of how the international trading system works. Thus, although Ukip have stood back from this option, it is still necessary to give it a decent burial.

Lea herself argues that fifty percent of international trade is conducted under WTO rules, without Regional Trade Agreements (RTAs). On that basis, she asserts, this is "not some dreadful, minimum, minority option". But even there, she is wrong. For a start, all trade between WTO members - whether within the ambit of trade agreements or not - is carried out "under WTO rules".

Where she particularly misstates the situation, though, is that the RTA is by no means the only form of trade agreement. A significant volume of trade between developed and less-developed countries is carried out via a different form of agreement, known as preferential trade agreements (PTAs). Nearly 20 years ago, in 1997, these amounted to around 42 percent of trade. Although they have dropped to around 15 percent, that still means that the majority of world trade is conducted under the aegis of bilateral trade agreements.

Interestingly, though, much of the trade liberalisation comes not via bilateral agreements but unilateral tariff reduction. These account for roughly 66 percent of the decline in average tariffs in developing countries during the last two decades. Some 25 percent has come out of the Uruguay Round and only around ten percent has been gained through RTAs.

The gradual decline in tariffs has mean that they are now much less an important barrier to trade than they used to be. This is something which Ruth Lea and Global Britain concede. – as does the Democracy Movement in its latest pamphlet.

It is this decline which they use to legitimise their argument that we do not need to negotiate a free trade agreement with the EU, as the classic form of this agreement is directed towards tariff reduction.

This, though, ignores the changes in the way countries have sought to protect their positions, in the absence of tariff wall. As tariffs have diminished in importance, they been replaced by so-called Non-Tariff Measures (NTMs) or Technical Barriers to Trade (TBTs).

These have become far more important than tariffs and are of far more concern to advanced trading countries such as the USA, India, China, Japan and Australia.

Furthermore, they are a growing scourge. In 1995, the WTO received 386 formal notifications of TBTs. By 2013, they had risen to 2,137. Overall, TBTs are estimated to add more than 20 percent to the costs of international trade, against a trade-weighted average of 2.6 percent for goods from third countries sold into the EU Single Market.

Here, on of the most important TBTs are regulatory measures produced by individual nation and by blocs such as the EU. Exporting countries selling manufactured goods to the EU have the particular problem in that they can only place their products on the market when they meet all the applicable requirements and standards required by the EU. Those standards, rather than tariffs, have become the main barriers to trade.

In many countries, this is partially resolved either by all parties adopting common international standards, by exporting countries adopting EU standards as their own, or by agreeing equivalence between similar national standards. This is one of the crucial issues which puts to bed any idea that leaving the EU is going to lead to a bonfire of regulations that the WTO advocates so adore. The world is rushing to achieve regulatory convergence - regulation is now being carried out on a global scale, as a means of reducing trade barriers.

However, this is only part of the problem and, as developed countries have achieved a great deal of regulatory convergence. In many respects, it has become the least of the problems. The most troublesome problem that has emerged is not conformity with regulations (and standards), per se, but the need to verify conformity, through what is called the conformity assessment procedure.

It is here that things can get very complicated and expensive. Unless conformity is verified by an approved body before goods reach the Single Market, they can be required to undergo testing and document checks at the border. Not only can this cause considerable delay, it can lead to the rejection of perfectly sound produce, bringing trade to a halt.

To avoid this happening, exporting countries do two things. First of all they set up their own conformity assessment systems, ones which match the systems in the EU and are at least equivalent to them. Then they seek their recognition of their systems from the EU. And here is the essential point: recognition is done through a special type of trade agreement known as the Mutual Recognition Agreements (MRA). These enable conformity to be checked and approved before the goods are despatched, so that the goods are able to enter the Single Market without further checks.

Australia, Canada, Japan, New Zealand, the USA, Israel and Switzerland all have MRAs with the EU. China also formalised an agreement on 16 May 2014. This, and other agreements other agreements on Customs co-operation, considerably eases the flow of trade.

Furthermore, China also tends to resort to the Memorandum of Understanding system, as in here, here and here, agreements which do not have the status of full-blown treaties but which, with a Communist government, have binding effect in their society. And, while each MoU might deal with narrow specifics, collectively they add up to a substantial area of co-operation.

We saw, for instance, the EU-China Cooperation Plan in Agriculture and Rural Development, agreed "under the auspices of the annual bilateral Agricultural Dialogue to enhance cooperation in the fields of sustainable agricultural production, organic agriculture, rural development and agricultural research". This paved the way for the free trade in organic produce between the EU and China.

All such agreements are essential to trade, and they do not represent "free trade" on the model promoted by the WTO advocates. Even without formal RTAs, the trade is highly regulated and controlled by processes that, in themselves, facilitate the flow of goods. The regulations and the agreements are not the barriers - they help remove the barriers.

The important thing to understand, though, is that the MRAs have far more value to the trade between the different nations than the marginal advantages gained by reducing the already residual tariffs. But they are not lodged with the WTO as tariff reductions and thus do not register as free trade agreements.

Only because of this can the likes of Ruth Lea can claim that the EU does not have a trade agreement with China. But in fact, it has multiple agreements - 65 over term, including 13 bilateral agreements, ranging from this on trade and economic co-operation, to this on customs co-operation. None of these are of the simple, tariff reduction variety.

Additionally, China tends to tends to foster multilateral relations, working actively through G20, where it agreed with the EU the 2020 Strategic Agenda for Cooperation. Reinforced by 60 high level and senior officials dialogues on topics including industrial policy, education, customs, social affairs, nuclear energy and consumer protection, this makes for powerful relationships which do not show up on the WTO books.

As to the UK, should we leave the EU, we will be looking to trade under similar conditions to those enjoyed by Australia, Canada, Japan, New Zealand, the USA, Israel or Switzerland – and China. The only problem is that, if we choose to rely solely on the WTO option, we will be out in the world without covering MRAs and other complex fabric of agreements that serve to lubricate trade.

To trade with the EU, therefore, we are going to have to negotiate such agreements - trade agreements by any other name – and, for the time being, tap into the EU's ongoing arrangements. The "no negotiation" stance on withdrawal is not tenable. The WTO option, and what is termed by Global Britain as the "free trade option", is a dangerous fantasy. And at least Ukip has recognised that. The rest need to follow.

Richard North 18/04/2015 link

Thursday 16 April 2015

000a Ukip-016 manifesto.jpg

We could not be bothered to fisk the Conservative manifesto – so low are our expectations. All we needed from them is to promise us a referendum and abide by the result. And that's what we got, with the added bonus of a commitment to repeal the Human Rights Act.

Ukip, on the other hand, is the challenger, so there are higher expectations. And since this is supposedly an anti-EU party, one expects it to come up with a comprehensive and realistic policy on the EU. But, given the amateurish nature of Ukip, that was never going to happen and, in their current manifesto, we are not disappointed. This is amateurs' night on stilts.

It starts with Ukip telling us that it believes British citizens should have an in/out referendum on our membership of the EU "as soon as possible" – a throw-back to Farage's stupidity in calling for a referendum this year – heedless of whether we could, or were prepared to fight and able to win.

And in a celebration of its amateur status, it then pushes for the question of choice to be: "Do you wish Britain to be a free, independent, sovereign democracy?” – something so vague and non-specific that it would never be approved by the Electoral Commission or Parliament.

Nevertheless, we have made some small progress. The manifesto explores the scenario following a vote to leave, suggesting we have "two legal options" – one is to repeal the European Communities Act 1972 and leave immediately and the other is "to activate Article 50 of the Lisbon Treaty and notify the European Council that the UK has decided to leave the EU in two years' time".

In fact, we don't have two legal options – we have one – to activate Article 50. And then, that doesn't involve us putting a specific time limit on it. But at least the party goes for the "second option", which "provides for a sensible, orderly exit and this is the option we prefer". This is progress indeed.

Then the amateur tendency comes to the fore. Having activated Article 50 of the Lisbon Treaty, the party says: "we will set a fixed date, two years ahead, on which we intend to leave, while recognising we could leave earlier". But that is not the way Art 50 works. The negotiations end when an agreement is reached – and although one has aspirations on timing, it is unwise to commit to a specific period.

Furthermore, concluding an agreement does not automatically take us out of the EU. It may well be that there is a short transitional period, so that we have a few months to put arrangements in place. We could – by way of an example – conclude an agreement in May 2020, but formally end our membership on 1 January 2021.

To give the party some little credit, though, it does want "amicable negotiations", with the "first step" being to "broker a bespoke UK-EU trade agreement".

But here the plan starts to fall apart. The belief is that the deal could be brokered "possibly within a very short period of time". Yet all the evidence points to a trade agreement taking five years or more – possibly as long as 10-15 years. There is virtually no chance of it being concluded in two years. What does Ukip do then? It has no answers.

Instead, all it has on offer are inherent contradictions. On the William Dartmouth "trade" page, we are told that: "We will continue to trade internationally after Brexit, enjoying the rights inherent in the WTO's 'Most Favoured Nation' (MFN) principle". A few pages later, though, on the "Brexit" page, we are told that "we will secure trade agreements with the EU, the 40 nations with trade agreements with the EU and other nations of interest to us".

As a "G7 member, a leading world economy, the fifth largest by GDP", we are also assured that "this will be a rapid process in most cases". Countries already trading with the EU "will want to continue seamless trade relationships; other world nations will want to forge new trade alliances with the UK; and all nations will find it easier to deal with the UK directly".

There is, of course, a major difference between arrangements where there are trade agreements and those which rely on MFN status. In the latter, we pay tariffs. In the former, trade is largely tariff-free. Yet, apparently, we are to "enjoy" both of these simultaneously.

Confusion, however, quickly descends to dishonesty. "As a minimum", we are told, "we will seek continued access on free-trade terms to the EU's single market. Our custom is valuable to the EU now and will continue to be so following Brexit".

But "access on free-trade terms to the EU's single market" outside EU membership is participation in the EEA by any other name – effectively the "Norway Option". The price of that would most certainly be free movement of people, which is the very thing that Ukip promises will end. The party is trying to have it both ways.

Furthermore, confusion and dishonesty doesn't stop there. "Excessive regulations stream out of Brussels, adding huge administrative and financial burdens to the challenges already faced by small businesses", says Ukip, which then adds: "All this must stop".

The party then goes on to say that fewer than one in ten British businesses trade with the EU, yet 100 percent of them must comply with thousands of EU laws on employment, waste management, environmental regulations, product registration, health and safety and so on. Ukip, therefore, "will repeal EU Regulations and Directives that stifle business growth", it says. It "will get us out of the EU and release enterprise from the strangulation excessive regulation".

One point, of course, is that Single Market access requires conformity with exactly with "the thousands of EU laws on employment, waste management, environmental regulations, product registration, health and safety and so on". Another point is that, under WTO rules on equal treatment, it is not possible to apply one set of rules to imported products, and more relaxed laws to domestic businesses. And nor would the EU permit two-tier regulation to prevail in countries which had Single Market access.

Thus what we have is a thoroughly dishonest - as well as an inconsistent - policy, even without taking into account the complete cop-out on the fishing policy. For solving "discard and landing issues", it offers only that we should "work with our fishermen".

To deal with asylum seekers, the party says: "We will comply fully with the 1951 UN Convention Relating to the Status of Refugees" - without acknowledging that this is at the root of the problem. And the party then claims also that it will "speed up the asylum process and seek to do so while tackling logjams in the system for those declined asylum status".

Some of that might be helped by the party's commitment to removing ourselves from jurisdiction of the ECHR, yet it doesn't begin to explain how we are going to remove failed asylum seekers back to their country of entry, when we stand outside the EU and its Dublin regulation.

And then tucked into the immigration section is what appears to be a bombshell. "We value and want to encourage tourism", says the party, so the "Migration Control Commission" will be charged with finding a system which enables countries with which the UK already has close ties, such as member states of the European Union and the Commonwealth, to establish reciprocal arrangements for visitor visas and term-dated entry passes.

There is no way of reading this, other than Ukip is proposing visas for visitors from EU member states, requiring us also to have visas to travel to countries such as France and Spain, and all other EU member states.

Then, to add even further to the incoherence, we come to the finances. Even though the party is going for Art 50, and two years of negotiation – with the probability of us not leaving until 2020 – Ukip claims to be saving £7.5 billion in 2017-18, £8.5 billion in 2018-19 and £9.0 billion in 2019-20. By its own measure, therefore, these saving are illusory.

But, in its "Brexit" policy, Ukip says there will be a wide range of issues on which we will want to continue to co-operate. These, we are told, "include extradition treaties, cross-border intelligence, disaster relief, accommodation of refugees, pan-EU healthcare arrangements and various other cultural projects". We will also, says Ukip, "maintain our membership of pan-European institutions, such as the European Space Agency and the European Medicines Agency".

This is actually sensible, but there is a cost involved. And, if we are to involve ourselves with the EU to the same extent as Norway, this – as we reported earlier could cost us as much as £6 billion a year.

For all that, no one really expected a Ukip policy to be anything but amateur's night out. It's almost comedic, therefore, having Nigel Farage boast that his manifesto sets "a new gold-standard for how manifestos should be produced".

I suppose, therefore, that this must means he's also sets a new standard for gold-standards - and a very low one indeed.

Richard North 16/04/2015 link

Wednesday 15 April 2015

000a Times-015 block.jpg

In a Times front page article today, that makes no sense at all, we are getting a typical dose of nonsense (to add to add to earlier nonsense) from a legacy media which has not yet learned the basics of the EU and its procedures.

The president of the European Commission, we are told, "has ruled out any treaty negotiations on Britain's relationship with Europe until two years after the referendum promised by David Cameron", all on the basis of anonymous "sources close to Jean-Claude Juncker".

This sort of low-grade journalism is bad enough, where the "sources" could be anything from the chauffeur pool to the office cleaners – totally beyond verification. But the ultimate trap into which The Times has fallen is to attribute this to the Commission President, who had no locus in the matter.

In terms of procedures, treaty change is one remaining area which is not in the gift of the Commission. It remains with the European Council and its President – currently Donald Tusk. The Commission does no have a say in the timing of treaty negotiations, and is not in a position to block member states if they decide upon a vote.

Thus, the slender claim from the newspaper – picked up by others - is meaningless. It is just so much empty fluff, which does nothing more than represent the inability of the legacy media reliably to report EU affairs.

Quite possibly, this is part of the theatricals, which the "colleagues" are so skilled in exploiting, all to magnify the obstacles Mr Cameron faces in seeking treaty change, then to create the semblance of a great victory when he finally "prevails" against the odds.

The only thing about which one can be certain though, with a media that still allows Mr Cameron to claim that he "vetoed" a treaty, is that it is unwise to rely on it for any sensible or accurate reporting on EU issues. Their ignorance is profound and their capacity to mislead is endless.

Richard North 15/04/2015 link

Wednesday 15 April 2015

000a CP-015 Manifesto.jpg

The EU needs to change, the Conservative Manifesto tells us. And it is time for the British people – not politicians – to have their say. Only the Conservative Party will deliver real change and real choice on Europe, with an in-out referendum by the end of 2017, we are promised.

Labour, we are told, failed to give us a choice on the EU. They handed over major new powers to Brussels without our consent, and gave away £7 billion of the British rebate. We, the Conservatives say, have taken action in Europe to promote your economic security. We cut the EU budget for the first time ever, saving British taxpayers £8.15 billion.

We took Britain out of Eurozone bailouts, including for Greece – the first ever return of powers from Brussels, they say. Our Prime Minister vetoed a new EU treaty that would have damaged Britain's interests. And we have pursued a bold, positive, pro-business agenda, exempting smallest businesses from red tape, promoting free trade, and pushing to extend the Single Market to new sectors, like digital.

But there is much more to do, they say. The EU is too bureaucratic and too undemocratic. It interferes too much in our daily lives, and the scale of migration triggered by new members joining in recent years has had a real impact on local communities.

"We are clear about what we want from Europe. We say: yes to the Single Market. Yes to turbocharging free trade. Yes to working together where we are stronger together than alone. Yes to a family of nation states, all part of a European Union – but whose interests, crucially, are guaranteed whether inside the Euro or out. No to 'ever closer union'".

So it goes on: "No to a constant flow of power to Brussels. No to unnecessary interference. And no, of course, to the Euro, to participation in Eurozone bail-outs or notions like a European Army".

It will be a fundamental principle of a future Conservative Government, we are told, that membership of the European Union depends on the consent of the British people – and in recent years that consent has worn wafer-thin.

That's why, after the election, they tell us they will negotiate a new settlement for Britain in Europe, and then ask us whether we want to stay in the EU on this reformed basis or leave. David Cameron has committed that he will only lead a government that offers an in-out referendum.

The Conservatives then tell us that they will hold that in-out referendum before the end of 2017 and respect the outcome. So the choice at this election is clear, they say: Labour and the Liberal Democrats won't give us a say over the EU. UKIP can't give us a say. Only the Conservative Party will deliver real change in Europe – and only the Conservatives can and will deliver an in-out referendum.

And so our potential leaders have a "plan of action". They will let us decide whether to stay in or leave the EU. They will legislate in the first session of the next Parliament for an in-out referendum to be held on Britain's membership of the EU before the end of 2017.

They will negotiate a new settlement for Britain in the EU and will then ask the British people whether they want to stay in on this basis, or leave. Crucially, they tell us, they will honour the result of the referendum, whatever the outcome.

They will, we are assured, protect Britain's economy and will protect our economy from any further integration of the Eurozone. The integration of the Eurozone has raised acute questions for non-Eurozone countries like the United Kingdom.

Then the propaganda flows, as they tell us that we benefit from the Single Market, so "we" do not want to stand in the way of the Eurozone resolving its difficulties. Indeed, given the trade between Britain and the Eurozone countries we want to see these economies returning to growth.

But, say the Conservatives, "we will not let the integration of the Eurozone jeopardise the integrity of the Single Market or in any way disadvantage the UK. We will reclaim powers from Brussels".

As always, we have the familiar litany: "We want to see powers flowing away from Brussels, not to it. We have already taken action to return around 100 powers, but we want to go further. We want national parliaments to be able to work together to block unwanted European legislation. And we want an end to our commitment to an 'ever closer union', as enshrined in the Treaty to which every EU country has to sign up".

Furthermore, they say, "we will continue to ensure that defence policy remains firmly under British national control, maintaining NATO and the transatlantic relationship as the cornerstones of our defence and security policy".

And then, they tell us they will scrap the Human Rights Act. They will scrap "Labour's Human Rights Act and introduce a British Bill of Rights which will "restore common sense to the application of human rights in the UK".

The Bill, they say, will remain faithful to the basic principles of human rights, which we signed up to in the original European Convention on Human Rights. It will protect basic rights, like the right to a fair trial, and the right to life, which are an essential part of a modern democratic society.

But it will reverse the mission creep that has meant human rights law being used for more and more purposes, and often with little regard for the rights of wider society. Among other things the Bill will stop terrorists and other serious foreign criminals who pose a threat to our society from using spurious human rights arguments to prevent deportation.

The Conservatives will, they then say, take action in Europe to make us better off. They want an EU that "helps Britain move ahead, not one that holds us back". They tell us they have already succeeded in exempting our smallest businesses from new EU regulations, and kicked-off negotiations for a massive EU trade deal with the USA, which could be worth billions of pounds to the UK economy.

They say they will build on this. They want to preserve the integrity of the Single Market, by insisting on protections for those countries that have kept their own currencies.

They want to expand the Single Market, breaking down the remaining barriers to trade and ensuring that new sectors are opened up to British firms. They want to ensure that new rules target unscrupulous behaviour in the financial services industry, while safeguarding Britain as a global centre of excellence in finance.

So, they say, they will resist EU attempts to restrict legitimate financial services activities. They will press for lower EU spending, further reform of the Common Agricultural Policy and Structural Funds, and for EU money to be focused on promoting jobs and growth.

And there you have it – the first self-fisking manifesto in history. Further comment is unnecessary.

Richard North 15/04/2015 link

Tuesday 14 April 2015

000a referendum-014 question.jpg

I was in London yesterday, for reasons which will become apparent after the election – one from which a Conservative victory looks increasingly likely, thus presenting us with the challenge of fighting a referendum campaign in 2017.

With that in mind, published below is an early version of a revised summary for Flexcit. It's not part of the main work yet, and will have to wait until we're ready with the next version – which I hope will only be a week or so now. So here is the sneak preview of a "roadmap for exit":

UK withdrawal from the EU, following an "out" vote in a referendum and an Article 50 notification, will have significant geopolitical and economic consequences. But we believe it is unrealistic to expect a clean break from the EU in a single step, immediately unravelling forty years of political and economic integration. We have therefore set out a process of staged withdrawal.

In all six of the stages we identify, we expect progress to be driven by political realities. In respect of the first stage, we believe that an exit agreement must be sought within the initial two year period allowed for in the formal exit negotiations. We also believe - largely as a result of promises that will have to be given during the referendum campaign - that there will be an absolute requirement to continue participation in the EU's Single Market in the short to medium term.

Our multi-stage exit plan demands separate short-term and longer-term negotiations, to achieve a measured, progressive separation. Initially, as a means of securing as rapid an extraction as possible, we see value in a first stage which comprises rejoining the European Free Trade Association (EFTA) and trading with the remaining EU member states through the European Economic Area (EEA) - the so-called "Norway Option". Alternative strategies are available if this option does not prove viable.

As part of the immediate withdrawal process, we would also repatriate the entire body of EU law, including that pertaining to agriculture and fisheries, thereby protecting the Single Market and inwards investment. This would not only ensure continuity and minimise disruption – and reduce what would otherwise be massive burdens on public and private sector administrations – it would buy time for a more considered review of the UK statute book.

We would also continue with co-operation and co-ordination with the EU at administrative levels, where immediate separation of shared functions is neither possible nor desirable in the short term.

These would include the research programme (Horizon 2020), the Single European Sky and the European Space Programme, certain police and criminal justice measures, joint customs operations, third country sanitary and phytosanitary controls, anti-dumping measures, and maritime surveillance. Such issues are in any event best tackled on a multi-national basis, and there is no value in striking out on our own.

Thus, the immediate objective of this first stage would be limited to a smooth, economically neutral transition into the post-exit world, laying the foundations for the UK to exploit its independence, without seeking to achieve everything at once. Subject to a referendum to approve the initial exit agreement, the basic framework for a withdrawal could be in place within two years of starting negotiations.

Immediately upon exit, we would then initiate a second stage – the regularisation of our immigration policy and controls. This will require action at a global level to deal with the Geneva Convention on the Treatment of Refugees, and the 1967 Protocol, as well as at a regional level, modifying or withdrawing from the European Convention on Human Rights.

We then propose a third stage, which involves initiating negotiations to transform the EEA into a genuine, Europe-wide single market, with common decision-making to all parties. This will be fully integrated into the global rule-making process, through existing international bodies.

The aim would be a community of equals in a "European village", rather than a Europe of concentric circles, using the Geneva-based United Nations Economic Community Europe (UNECE) as the core administrative body, on the lines proposed by Winston Churchill in 1948 and again in 1950. Thus, the Article 50 negotiations and exit from the EU become the start of an ongoing process, the means to an end, not the end itself.

Simultaneously, we identify and explore some key policy areas where independent policy development is required, eventually leading to divergence from the EU and the emergence of unique British policies. This, as far as it can be identified as such, becomes a fourth stage of the plan.

Our post-exit Britain then emerges from the implementation of a further, fifth stage, itself comprising eight separate initiatives which come together to make a coherent programme which will define our global trading relations. The "Norway Option" has now receded, having served its purpose as the launch pad, opening the way for the UK to break out of the EU cul-de-sac and rejoin the world.

Sixth, and finally, we take the opportunity afforded by withdrawal from the EU to embark on reforms of domestic governance, by introducing elements of direct democracy and other changes. That, in its totality – the sum of the parts bring greater than the whole - we call "Flexcit", an exit strategy based on a FLexible response to a complex situation, and Continuous development.

Richard North 14/04/2015 link

Monday 13 April 2015

Every man, woman and child in Britain is more than £3,400 in debt – without knowing it and without borrowing a single penny - says the Independent on Sunday. This is the £222 billion owed to banks and businesses as a result of Private Finance Initiatives (PFIs) – "buy now, pay later" agreements between the government and private companies on major projects.

The headline debt is based on "unitary charges" which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.

PFI's were the brainchild of the Conservative Party in the 1990s, but were swiftly embraced by New Labour. Successive governments signed hundreds of the deals. PFI-funded schools, streetlights, prisons, services, police stations and care homes can be found across Britain.

The system has yielded assets valued at £56.5 billion. But Britain will pay more than five times that amount under the terms of the PFIs used to create them, and in some cases be left with nothing to show for it, because the PFI agreed to is effectively a leasing agreement.

Some £88 billion has already been spent, and even if the projected cost between now and 2049/50 does not change, the total PFI bill will be in excess of £310 billion. This is more than four times the budget deficit used to justify austerity cuts to government budgets and local services.

Strangely, this will be another issue that does not make it to the top of the list in this election. But when both main parties have sticky fingers, this is hardly surprising. And there's the rub. On this and so many other things, the choice is barely worth having.

We thus make our choices not on the grand sweep of things, but on small differences. And there is one difference that matters to us. Mr Cameron has promised us a referendum on the EU. Mr Miliband hasn't.  And now, Mr Farage is telling his supporters to vote Conservative, it is that little bit closer. We could actually be looking at a referendum in 2017.

Richard North 13/04/2015 link

Sunday 12 April 2015

000a Booker-012 election.jpg

Everybody's saying it – this election is totally unreal. Nothing of substance is being discussed and the politicians seem to be in a race to the bottom.

Thus does Booker note that, among the more melancholy rituals of British politics these days are the regular meetings of those committees of Lords and Commons, whose task is to "scrutinise" draft laws affecting Britain that emerge from the EU.

These were originally set up under a "Solemn Resolution" that no British ministers could approve laws made in Brussels unless the peers and MPs had first given the go-ahead. But in practice this has been ignored wholesale, because there is nothing Parliament can do to stand in the way of that inexorable Brussels juggernaut.

This is yet another reminder of how many important issues are not mentioned in this election campaign because so much of how we are governed is now decided elsewhere, by European and global bodies not accountable to Parliament – and over which our votes cannot have the slightest influence. Treaty by treaty, we have given away the right to make laws and policy over an ever-greater swathe of issues, shrinking ever further those areas over which our elected representatives have any say.

No government department's policies are more completely under the sway of Brussels than the Department for Environment, Food and Rural Affairs, supposedly responsible for everything from farming and fisheries to food safety, managing floods and how we dispose of our rubbish.

There was a time when, in a British election, such matters might have attracted heated debate. But the power to decide on all these things has now been handed over, first to Brussels and then to unaccountable quangos, such as the Environment Agency or the Food Safety Agency, whose responsibility is simply to carry out what Brussels has decreed.

Nothing has diminished our politicians more than the way they have abdicated so much of their old responsibility that, without explanation, they have removed many of the issues which affect our lives from the democratic arena.

We may have heard the odd mention in this election of "tax avoidance". But how often do we hear any politicians honestly explain the reason why Google, Starbucks and so many other multinationals, including our foreign-owned water and electricity companies, can "offshore" their liability to pay tax on their British earnings? It is simply because this is entirely legal under EU treaty rules, and those laid down by even more mysterious global bodies such as the Organisation for Economic Co-operation and Development (OECD).

Again we hear mention of defence, but only centred in the vaguest way on whether Nicola Sturgeon will stop us having nuclear weapons or whether David Cameron will keep our defence spending to two percent of GDP.

Nowhere do we hear any proper discussion of what our Armed Forces should actually be for, let alone of how our defence spending has been so distorted by building those giant aircraft carriers, without aircraft, to fulfil our commitment to creating a "European Rapid Reaction Force" which seems already to have faded into history.

As for our foreign policy, it seems doubtful following the debacle of our intervention in Libya whether we actually have one at all, apart from our blind subservience to the EU's vaunted "Common Foreign Policy". Its only real achievement has been the shambles created by the EU's reckless urge to suck Ukraine into its own empire, provoking a wholly predictable response from Russia that has left the West looking weak, divided and utterly ridiculous.

Equally we hear no real discussion of what should be the proper purpose of our incredibly wasteful £12 billion-a-year aid budget, the second highest in the world, which only gets mentioned when we are told by Brussels that, under "international accounting rules", we must now increase it by a further £1 billion, to meet that legal commitment to spending 0.7 percent of our GDP on which all our main parties are agreed.

All this and much more we never hear being discussed in this pitifully shrunken, stage-managed election, where all that seems to matter is who said what about the latest "gaffe" by someone we scarcely recognise or care about.

They say we get the politicians we deserve, Booker concludes. But he (like the rest of us) can't recall any election where so many people seem convinced that we really don't deserve any of them.

Richard North 12/04/2015 link

Saturday 11 April 2015

000a telecoms-011.jpg

Boiling Frog has done another of his telecom posts - a long, complex piece which continues the analysis of the regulatory environment. In due course, this will add another chapter to Flexcit, as dealing with the "digital market" will be an important element of the UK's exit settlement.

What comes over from an exploration of the issues is the extraordinarily complex structure of that regulatory environment, which encompasses national, EU and global regulation.

At the top of the global heap is the International Telecommunication Union, but this itself has spawned and entirely new type of regulatory organisation, the World Standards Co-operation Alliance, established in 2001.

This comprises the International Electrotechnical Commission (IEC), the International Organisation for Standardisation (ISO) and the ITU. Its objective is "to strengthen and advance the voluntary consensus-based international standards systems of IEC, ISO and ITU", and sets a new level of global governance.

What stands out as well is that the ISO isn't even a government body or a treaty organisation. It is a limited company which has no official status as a law-maker. Nevertheless, this is one of a growing number of bodies producing transnational private regulation, which is explained in more detail here.

Transnational private regulation (TPR) is described as a "growing phenomenon", contributing to the regulation of existing markets. In the jargon which so characterises this subject, we are also told that it "presents new characteristics departing from more conventional forms of domestic self-regulation". It reflects a transfer of regulatory power from the domestic to the transnational and from the public to the private sphere with significant distributional consequences.

Such transfers, we then learn, "modify but do not necessarily reduce the role of States especially in relation to standards’ implementation and enforcement".

Early examples include the Forestry Stewardship Council and the Marine Stewardship Council, and things like the ISEAL Alliance, but they also take in the Internet Corporation for Assigned Names and Numbers (ICANN) and the World Wide Web consortium (W3C).

Some may think this is innocuous, but it further blurs the lines of responsibility between governments and non-governmental organisations, and confuses the already complex system of law-making and regulation, so complex that it now almost completely defies description.

The papers to which I have linked give some insight into these organisations, but apart from anything else, they call into question some of the simplistic ideas about deregulation. A driver of TPR is harmonisation of standards, in particular at the regional level, when public regulation presents significant national variations.

Thus "private actors" are cooperating to produce their own rules which, in many instances, are being built into global, regional and then national legislation. Law is thus is not only becoming globalised but privatised – and most people don't even begin to understand what is happening. The EU, it would seem, is only one of our problems.

Richard North 11/04/2015 link