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EU Referendum: straw man Osborne

2016-04-18 15:30:10

To make claims of a government policy paper in the public media, with the core document as yet unpublished, all to influence the EU Referendum, is to treat the voters with contempt. 

But that is the way Chancellor George Osborne has been playing it this morning, with an appearance on the BBC Today Programme, on the back of an authored piece in The Times, tucked safely behind the paywall. The Treasury website, remains blemish-free.

To keep the full report back Osborne undoubtedly needs to do, as he is relying entirely on the straw man technique in order to make this case. He creates what he himself calls a "fantasy" exit scenario and then gets his ever-obedient Civil Servants to put a price tag on it, coming up with a fantasy cost of 4,300 for every household in Britain by 2030.

The point, of course, is that this scenario is not one which any sensible government would dream of adopting. It can exist only as a phantom of the debate, only in the absence of a coherent alternative specified by the official leavers something that they have not yet done.

We are told also that the Treasury has "carefully modelled" the impact on trade and investment of all of the alternatives to membership of the EU, including the "Norway model", where "we gain partial access to the single market but we still face custom barriers and we still end up paying into the EU and accepting free movement".

Predictably, the public media outpourings offer no detail of the Treasury findings, thereby representing a deliberate attempt to rig the debate. The Chancellor offers the cost of the fantasy option to the public but, on the assumed cost of the more realistic (albeit interim) option, he is silent.

This is a shoddy, low tactic, but it is one that graphically illustrates the weakness of the Government's case. If it had a respectable argument, it would have no need to rig the debate.

For the leavers, then, the answer is clear. We must pick a realistic exit scenario (as in the Norway option, embodied in Flexcit) and cost it out according to the Treasure methodology (but with distortions removed).

We have no doubt that, in this event, Brexit is cost-neutral in the short-term. As for the longer term, there are benefits, and these could be substantial not only for the UK but the rest of the world. For instance, a re-energised UK, able to act freely on the world stage, could kick-start world trade in a way that the lethargic TTIP talks never could.

By the imaginative process of what we call in Flexcit, "unbundling", we can focus on priority areas which will deliver swift outcomes, for little pain. For instance, a global agreement on the classification and labelling of pharmaceuticals could save businesses upwards of $20 billion a year on inventory and stock-management costs, speeding deliveries and cutting waste.

There are hundreds of other such examples which a flexible and responsive nation can promote, while the trade juggernauts are bogged down in their "big bang" deals that take decades to negotiate and never really happen.

Interestingly, despite the emphasis on TTIP, and the oft' repeated but entirely false claim that the EU does not have a trade deal with the United States, there are already substantial agreements between the EU and US, which together account for goods and services worth 2 billion a day being traded between them, providing some 15 million jobs.

The formal cooperation goes back to 1990 with the Transatlantic Declaration, which was actively developed to become the Transatlantic Agenda by 1995.

However, these over-arching agreements, high on rhetoric and grand declarations are, to use an overworked phrase, reaching the limit of growth. The sheer size and complexity of "big bang" agreements is making them almost impossible to conclude, and very hard to deliver.

Meanwhile, fleet-of-foot nations are developing new arrangements such as partial scope agreements which deliver small, incremental gains and which are quick to negotiate and easy to repeat and enlarge.

Thus, on the plus side of the Flexcit ledger are the cumulative gains that will accrue from the ability once again to broker our own trade deals, and even more so from the leadership we can offer, making things happen on a global scale. That is what is at stake, and that is what Mr "Straw Man" Osborne and his Treasury team don't want you to know.

UPDATE: The paper is now online - 202 pages entitled: "HM Treasury analysis: the long-term economic impact of EU membership and the alternatives". I'll post an analysis as soon as I can.