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 Brexit: the IEA's confusion over the Single Market

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We're picking up a lot of personal reaction from last night's Brexit prize, although relatively little internet traffic, perhaps indicating that the prize-giving has not exactly set the world on fire. Even lil 'ol UKIP didn't notice. But with such a dull line-up, this is hardly surprising, although I suspect many have run for cover from the controversy.

However, Witterings from Witney has made his views known, in brief, before dashing off to Durham. There will be more to follow but, hopefully, not too many like Allister Heath. He prattles about "grown-up debates", while his minions mercilessly exterminate any comments which indulge in, er … a grown-up debate.

This, though, is not the end of the battle. It is the start (or the continuation) of the debate, and the publication of the low-grade Mansfield paper does at least provide a baseline, against which we can compare our work, in order to highlight the salient issues, and bring them more into focus.

With that in mind, resume from where we left off, whence we had determined that FCO civil servant Mr Mansfield didn't want full access to the Single Market, and he certainly did not want the UK to join the EEA. On the other hand, we have argued that within the time constraints of the Article 50 negotiations, there is very little option. To get inside the two-year limit, we are virtually obliged to go for a ready-made package such as the EEA.

But, as we point out in our submission, there is another important reason why we would need to stay in the Single Market. This is one which would be well-known to regular ex-readers of this blog but not necessarily to an FCO civil servant based in Manila.

The essence of this is FUD (Fear, Uncertainty, Doubt), the torrent of Europhile scare stories that have proliferated in the media since Mr Cameron gave his EU speech in January year-last. And, to judge from the latest opinion polls on EU sentiment, the FUD is working.

During any referendum campaign which might lead to our exit, I wrote in our submission, supporters of continued EU membership will most likely have fought a negative referendum campaign, relying heavily on their FUD - virtually the only weapon they have. In fact, we can expect the "in-yes" campaign to go into high gear, saturating every possible media source with scare material.

More specifically, the campaign will be exploiting the status quo effect and the perceived importance to British economy of the totemic Single Market. In this context, the "out" campaign will only succeed in a referendum if it is able to neutralise the FUD. This, as they say, is a sine qua non.

In our considered view, that will only be achieved by the "out" campaign giving absolute, unbreakable assurances of a commitment to continued membership of the Single Market. That is the political reality of any referendum campaign.

Assurances of that nature will, of course, have to be honoured, thus dominating the Article 50 negotiations. Without them, it may even be the case that a referendum on the Art 50 settlement could not be won. Thus, the need to keep the Single Market intact does, in our view add an insurmountable obstacles to settling for a bilateral agreement (and, for that matter, the WTO option).

Now, it is entirely up to Mr Mansfield to argue that we should not continue membership of the Single Market but, our view is that the negotiators would not have a free hand. Unless there was already a commitment in place to continue with the Single Market, the referendum would not have been won, and there would not have been any Article 50 negotiations to consider.

Clearly, Mr Mansfield was not aware of this argument or, if he was, he did not consider it important enough to mention it. The judges must have been aware of it, as we put it too them. And, I gather, we were not the only ones to do so. If they weren't, they should have been and weren't paying enough attention.

The question is, therefore, whether you, the regular ex-readers, consider that the judges were entitled to ignore our arguments in assessing Mr Mansfield's work, and whether in the absence of Mr Mansfield even considering these arguments, the judges were entitled to claim that his work was better than ours.  You might be surprised to learn that I think that we might have offered a better pitch.

As to what Lord Lawson, father of Nigella, was even thinking, though, this is very difficult to work out. In today's Times, he writes a column about the Brexit award, which is headlined, "The UK will continue to enjoy access to the single market even after 'Brexit'" (above). Yet, if Mr Mansfield has his way, we will not enjoy access to the Single Market. He specifically writes (p.9) that "full membership of the Single Market should not be sought".

And Lord Lawson and his judging panel gave this man the IEA "Brexit" first prize. Did he actually read the submission and, if he did, did he understand it?

Richard North 09/04/2014

 Flexcit: how we would actually leave the EU

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In November last, we started writing an in-depth plan as guidance for the UK in leaving the EU, the basis of which has been published here, where you will also find the references to the issues discussed here.

At the time the submission was so arbitrarily rejected, however, I observed that my single, most important contribution was the observation that "Brexit" should not be regarded as a single event, but a process – rather like the process of European integration, with its progression of treaties.

Thus, I advanced that we should not be looking for a single product, a finished "plan" which we could park in the showroom and polish, for all to admire. Rather, we should be setting out a series of ongoing strategies, an exit to which would be added FLexible response and Continuous development. Thus, in our submission, "Brexit" became "FLexCit" – with a flow chart illustrated above.

As to the agreement arising from the Article 50 negotiations, this became not an end point, but simply one step in a long-drawn-out process that involves nothing more than a series of interim solutions. Thus, we argue that Britain should rejoin EFTA and, through that, the EEA.

This would involve adopting the entire Single Market acquis, essentially the "Norway option", allowing us to continue trading with our EU neighbours without interruption. But we would also repatriate the rest of the acquis and, with very few exceptions, re-adopt them into UK law (alongside repealing the ECA). Then, we would need a provision by which we would adopt the EU's bilateral treaties, to maintain the status of the third country agreement, once we have left the EU.

This three-point plan offers stability and continuity. In effect, the day after we leave the EU will be little different, in practical terms, from the day before we leave. There will be no Armageddon – no end of the world scenario. The Europhile FUD will simply not materialise.

However, that means that, in terms of tangible dividends, there will be very little to see. Much has been made of the reduced burden of regulation that might be expected but our analyses suggest that expectations might be unrealised in the short-term.

Much of the existing legislation will have to be maintained, either because of EEA membership, domestic regulatory requirements or international obligations. The dividend, we believe, will not come from "big bang" deregulation, but from continuous development, majoring on the issues we have raised.

What you will see from the flow chart though, right at the bottom, are three blocks. One is headed "EFTA/EEA talks", the other the "eight-point programme" and the third "UNECE talks".

The first and the third of the blocks are linked, and I will deal with these in more detail in a separate post. In essence, though, I propose that the EEA is eventually abandoned, and that EFTA becomes a much more powerful and wide-ranging free trade area, perhaps taking on more countries, and even other former EU countries, becoming what I call EFTA+.

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I then suggest that the EU ceases to be the custodian of the Single Market acquis, and is replaced by UNECE, to become a genuine European single market, covering the whole of Continental Europe, built around the WTO TBT Agreement and, in particular, Article 2.4. Thus we have a completely different structure for the Single Market, as illustrated immediately above, removing political integration from the mix.

This then leaves the "eight-point plan", the elements of which are set out on the chart below. Firstly, we have posited that withdrawal from agriculture, fishing, regional and other policy areas will eventually allow for the repeal of some measures and their replacement with more efficient policies.

Secondly, we argue that better regulation, with risk-related measures, could yield significant economies, especially when combined with better, more timely intelligence.

Third, we aver that greater attention must be given to system vulnerabilities and to improved enforcement if growth in transnational organised crime is to be contained. This is a very significant check on the growth of free trade, as organised crime moves in to take advantage of the systems in place.

The proliferation of free trade zones, for instance, facilitates crime and tax avoidance. FTAs are also responsible for increased cross-border crime. Yet relatively little attention is being given to the problems.

Here, there is an interesting contrast between TTIP, which aims to "boost" the global economy by around €310bn, and TOC income estimated at more than $3trn a year. International trade in counterfeited goods and piracy alone is estimated to grow from $360bn (based on 2008 data) to as much as $960bn by 2015.

As to the fourth element, we need to be seeking regulatory convergence, leading to global regulatory harmonisation and the elimination of duplication. This could have a very substantial effect in reducing costs, provided it is done sensibly.

On the other hand, between markedly different regulatory environments, hysteresis can negate any beneficial effects of convergence. In fact, the hysteresis effect would rule out free trade areas based on the Commonwealth, and/or mixes of other countries where there are major differences between social development.

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Fifth, we need better dispute resolution would secure more uniform implementation, to ensure that whatever agreements are made, they are properly enforced. This is a highly vexed question which has yet to be resolved.

Sixth, instead of looking for all-embracing free trade agreements such as TTIP, which actually don't really work, there is the prospect of "unbundling", seeking sector-specific solutions. This is an alternative to the grandiose free trade agreements that promise much and deliver little.

Seventh, there are openings for more constructive ways of dealing with freedom of movement – especially on a global level - and, finally, we address the issue of free movement of capital and payments.

Each of these eight points will, in due course, be the subject of a separate post, the overall point being that these alone are enough to shape the future and give us plenty of meat to work on. I would not see this programme being completed in 30 years, by which time other priorities will have emerged. That is not as bad as it sounds, though, because progress is being made all the time.

The dominant ethos of flexible response, coupled with continuous development, though, will never change. And that is why "Brexit" is actually a chimera, and why anything that is offered as a fixed point or single event is a complete waste of space. Essentially, despite Myddelton's "Ratner moment", it is FLexCit or nothing. As an event, "Brexit" simply cannot work.


Richard North 08/04/2014

 EU politics: developing a winning strategy

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Despite the headline on the screen-grab, this is not about Farage. Rather, it is about one of my favourite subjects, stupidity - my own and, in this case the extrusions of Mr Andrew Rawnsley in this weekend's Observer.

Cutting to the chase, he is analysing the Clegg-Farage debates, and their implications for "pro-Europeans". The central conclusion he draws is that it is "hard to defend the status quo in the current climate and it is an unwise politician who tries to do so when elements of the status quo are anyway pretty indefensible".

Mr Clegg's worst mistake in the first debate, Mr Rawnsley tells us, was to answer a question about what the European Union would look like in 10 years' time by saying he thought it would be "pretty much the same" as now.

That, he says, may be an honest answer. It might even turn out to be an accurate prediction. But it came over as insouciance that was dismissive of public concerns. To win this great argument, we are told, "pro-Europeans will have to demonstrate a much better grasp of what makes people angry and a convincing commitment to reform".

It would be silly, Rawnsley concludes, "to read too much into the Clegg-Farage debates, but it would be equally foolish to ignore their lessons. Pro-Europeans should give up making excuses and start working on their arguments. It may be later than they think".

And it was worth spelling all that out just to be able to demonstrate how wrong Mr Rawnsley really is. Like Clegg, he doesn't even understand the battle he is fighting (and winning).

The point, of course, is that no one needs to defend the status quo. It has a habit of looking after itself. Those who challenge, those who are seeking change – they have to do the heavy lifting. Otherwise the status quo just goes rolling along, unchanged.

In the hands of the enemy, the most powerful weapon is the "elephant in the room" – the fact that so few people are aware of how much the European Union affects their daily lives. And in this, the pro-Europeans have the willing compliance of the legacy media and the establishment politicians. All they have to do is say nothing, and they win.

But the other weapon they have is FUD. Virtually, since Mr Cameron's January 2013 speech, the FUD has been pouring into the media, and it works – not that Rawnsley has begun to appreciate it.

Rawnsley's problem here is that he is just another metro-muppet. Like so many of his ilk, he's trapped in the Westminster village bubble, and actually thinks the Clegg-Farage debates were important. He's taken his eye off the ball.

The ball, in this case, is the EU "in-out" referendum polls. If Rawnsley really understood what was happening, he would have realised that his "pro -Europeans" were winning hands down.

With the leader of the ostensibly anti-EU UKIP having reinvented his party as the all-purpose "dustbin" for protest votes, having focused on Hoovering up anti-immigration BNP votes, the biggest player in the game is in the process of vacating the battlefield, one where the remaining forces are ill-equipped and unable pick up the slack – as yet.

Thus, would that he knew it, when Mr Clegg said that the European Union would look "pretty much the same" in 10 years' time, he wasn't very wrong. Ten years brings us to 2024. By then, a new treaty will have been in force, to replace Lisbon, for only a couple of years.

Only by some miracle will the UK anti-EU forces have built up enough momentum to have fought the referendum of 2018-19, and won the "no-out" vote. More probably, at the rate we are going, the UK will have fiudged the issue and we will be looking down the nose of another 50 years of EU membership.

And that really is the irony of people like Rawnsley. They are too stupid to even realise that they have won. All the have to do is keep pumping out the FUD, and the so-called "eurosceptics" will do the rest, failing through decade after decade to dent the opposition, or even understand why they are failing to dent the monster.

In ten year's time, therefore, they'll still be splatting "vote UKIP!" on Telegraph comment threads and not reading EU Referendum. We'll still be be writing "I told you so", as we celebrate our 20th anniversary, preparing to write yet another analysis of the latest treaty, and waiting for another referendum that will never come.

On the other hand, we could actually exploiting the stupidity of people like Rawnsley, develop our own winning strategy and then start rolling it out. Breaking habits of a lifetime and starting to win could prove addictive.


Richard North 07/04/2014

 Bexit: a "dystopian vision"

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The Independent today offers a "dystopian vision of Britain under the rule of Nigel Farage". That includes a perverse, distorted "Brexit" scenario, which goes like this:
The changes had begun in 2018 …

A minority Labour government had narrowly lost the vote on EU membership in 2017, with 48.2 per cent in favour of staying in, but 51.8 for the "Brexit". The result unleashed a wave of euphoria. It split both the main old parties and simply drowned the long-forgotten third. DemLibs, were they called? A tipsy exhilaration had gripped the land. As Tories and Labour fragmented, so the Patriots carved a substantial slice from each and won a fresh election with a landslide.

Gruelling months of negotiation in Brussels followed, with the British side much enfeebled by the mass resignation of senior civil servants. From farming and fishing to airlines and taxes, hundreds of discrete deals had to be struck at speed to replace the Single Market. At last, formal separation from the EU had come into effect on 1 July 2019.

The PU [Patriotic Union] had refused to join the wider European Economic Area, as membership would mean Norwegian-style subjection to every EU norm without a seat at the table. So, piecemeal, trade and co-operation pacts were hammered out on every front with EU mandarins who – in spite of their public commitment to neutrality – could not resist the odd twist of the fiscal knife in revenge.
And there we have the "no influence" - "fax democracy" meme writ large, the very same that Mr Clegg used in that debate, which Farage had every opportunity to demolish but didn't. But we will continue to get this sort of thing until we come up with an exit plan of our own. We have one here, served up on a plate, free. If UKIP wants help, here it is. It will struggle to find better.

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With that, it really is about time certain people realised that we are not playing games. Europhiles are rigging the debate and fighting dirty. FUD is and has been their most effective weapon, and they are using it to effect. Now, quite rightly (for them), they have homed in on the tactic painting a picture of the disaster they believe will happen if we leave the EU. If they paint that picture long enough and often enough, and inb enough graphic detail, it will have an effect. "Mud", as they say, "sticks".

It is, therefore, time that UKIP pulled its finger out. To help it on its way, we've set up a policy development pack for it (pictured top). And that, of course, is one of those low jibes which is calculated to irritate and offend. But those who are capable of thinking this through need to acknowledge that there is a limit to patience, and to tolerance. Can they say that the jibe is not deserved? Can UKIP actually move out of the kindergarten and deliver the goods?   

For a party which has as its objective (supposedly) the UK's withdrawal from the EU, it is utterly bizarre that they have not produced a settled plan to achieve that end. In fact, it is much, much more than bizarre. It is totally unacceptable. 

Here he have a situation where the Independent has actually crafted a longer, more detailed version of an exit plan than, so far, UKIP has produced. Criticising the critics for pointing this out will only go so far, and it will not work on this site. A better solution is for the party to pull its finger out and deliver a credible plan. Without it, UKIP has no claim even to be in the fight. And as long as it fails to deliver, I will be here reminding people of its failures.

The real issue, though, is whether UKIP can rise to the challenge or whether, faced with something more demanding than splatting "vote UKIP!" on a Telegraph comment thread, the hierarchy simply runs for cover. 


Richard North 05/04/2014

 Flexcit: travesty at the IEA

Autonomous Mind has noticed oddities about the final shortlist for the IEA "Brexit" prize. All those offering a distinctive EFTA/EEA solution (or variations thereof) have been blown out of the water while, amongst the remaining six, there is a distinct Commonwealth/Anglosphere bias.

One of the finalists, the Commonwealth Exchange, even goes so far as to say that it "does not take a position on whether the UK should remain in the EU" but feels it is important that plans are in place should it chose freely to leave. As a result, it has put forward a submission arguing that "the Commonwealth and wider Anglosphere should be at the forefront of any UK plans if it were to leave the union".

While we have yet to see the details of the final six, AM argues that the only possible explanation for the very obvious bias in the IEA judging panel is that it has abandoned any pretence of embracing wide-ranging and innovative solutions in an open minded fashion.

Instead, he says, it has "sought to advance entries that mirror their own pre-determined viewpoints". In short, the panel is only interested in entries that reinforce and confirm their own biases, which renders the whole IEA competition worthless.

You would hardly expect me to disagree with this, but there are very good, dispassionate reasons for suggesting that this is the case. Not least, as we pointed out in our earlier piece the political realities of any Article 50 negotiations are such that there will be great pressure to conclude an early agreement. Thus, while a Commonwealth or Anglosphere solution might sound superficially attractive, there is very little chance of settling all the issues involved in a de novo solution within a politically acceptable timeframe.

Additionally, we have the problem of fighting and winning an referendum campaign. Although the IEA set the scene with an Article 50 notification having already been made, I pointed out in my submission that any negotiations would have to take account of what had passed during the referendum campaign.

I then posited that, in order to overcome the FUD and actually succeed in gaining an "out" majority, there would have to be an unbreakable promise to safeguard our participation in the totemic Single Market. And that, to all intents and purposes, would require our re-joining the EEA.

While the IEA panel, in its patronising way thought this is an "intriguing" idea, what it will have to justify is the rejection of an interim solution in preference to something which may not (and almost certainly will not) work. Unless the panel have gone for another way of safeguarding our participation in the Single Market – one equally as plausible – one will be able to presume that it has not been guided by logic, or chosen the winner on the basis of merit.

When I looked at the competitors, during the writing of our submission, I concluded that any submission which suggested that the Commonwealth should be "at the forefront of any UK plans" would be so unrealistic that it could not possibly win. Although I allowed for better relations with Commonwealth countries, I did not place this prospect high up my list.

And apart from the fact that many Commonwealth countries have developed alternative markets and their own trading partnerships, there are very real technical reasons why the Commonwealth, as a bloc, could not form a stable or successful free trade area. In the modern age, says AM, the Commonwealth solution is no longer a realistic option.

Free trade blocs, he writes, require its members to have broadly similar standards and have similar levels of social development. There is such a difference in standards and social development between Britain and other members, including Uganda, Rwanda, Pakistan, India, Canada and New Zealand, that the notion of the bloc being a suitable wrapper for a free trade bloc just doesn't stand up.

The essence of a modern free trade area is a common rule book, setting out a wide range of standards, a reliable dispute system and, all importantly, uniform and effective enforcement.

Where there are major differences in social development, however, the introduction of common standards kicks in a phenomenon known as "regulatory hysteresis", explained in some detail in this paper.

What is absolutely necessary in a free trade area – as between EU countries in the EEA – is a convergence of regulatory systems, brought about by standardisation of law and uniform enforcement.

But what the paper illustrates is that imposing the same regulation in countries with different initial conditions can make countries diverge more, rather than move them closer together. This, it says, has important implications for global regulatory reform, but it also rules out any idea of the Commonwealth becoming a successful trading bloc.

For sure, as Empire, it could work, where the standards were determined in Westminster and enforced by British civil servants and colonial administrators under their supervision but, as independent countries, different conditions apply.

Between markedly different regulatory environments, hysteresis can negate beneficial effects of having a trading agreement, an effect which increases with time. Rather than go for a full-blown trading bloc, therefore, we need to assist the less developed countries with regulatory convergence, usually along limited sectoral lines, with the emphasis on improving enforcement.

This was one of the issues set out in my FLexCit submission, but the judges have given no indication that they have the capability to assess such effects, as indicated by the Bootle video (above).

Thus, AM has concluded that the IEA has ignored the real world in favour of a concept that would be unworkable and costly. It has pretended the politics of Brexit are irrelevant and that economics trumps all. As such, he writes, it cannot be taken seriously and any interventions it makes in the debate concerning the UK leaving the EU are likely to cause more harm than good.

Certainly, I will be looking very carefully at the winning entries to see whether the judges are indulging in nostalgic fantasies, or have taken account of real world conditions. As it stands, we have no reasons to be confident in either their grip of the issues or their impartiality.


Richard North 01/04/2014

 FLexCit: the blueprint for leaving the EU

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Since yesterday, I have been reworking my EU exit plan, into single line space format, with Times New Roman font. That brings it down to 98 pages – a reduced number of pages for those who want to print it out. The copy can be downloaded as a .pdf from this link, now entitled "FLexCit", standing for FLexible response and Continuous development.

This is probably the best, most comprehensive and realistic EU exit ("Brexit") plan you are going to get – for a very long while, free to download and to use as appropriate. Unlike many, it is written with a keen eye on the political realities, and is devised for the real world, with no concessions to the little Englander sentimentality that afflicts so much work.

Further, I do not rely on quick-fix superficialities of the type on offer here, in the Capital Economics "Nexit" report, nor flood it with irrelevant graphs and figures as a cheap way of imparting gravitas and authority. The work stands on its own, without artificial aids.

This, then, is the result of four-months intensive writing, under great time pressure, and word count constraints, but based on decades of experience and years of research. It is something UKIP should have produced years ago and, had I still been working with UKIP's political group, I would have produced earlier.

Incidentally, I noticed yesterday, in the run-up to the Clegg-Farage debate, Roland Rudd of British Influence (pictured), crowing that UKIP had not produced an exit plan. However, he cannot now say there is no workable exit plan. There is. It is here, the antidote to FUD and the shape of things to come. Comments and observations, aimed at improving it, would be much appreciated.

Richard North 27/03/2014

 UKIP: backing the wrong man

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The Nigel Farage story has moved on today, but is by no means abating. The media, however are moving away from the slightly risky territory of the UKIP leader paying a former mistress and onto the very much safer ground of him paying his wife, Kirsten, out of his secretarial allowance.

This is where the Financial Times stands, while the loss-making Guardian has resuscitated a video clip, with Farage stating that an MEP could earn as much as a Goldman Sachs banker through claiming expenses and employing his wife.

That was part of a longer documentary, Enemy Within, screened on BBC2 in 2000, at a time when there were only Michael Holmes, Jeffrey Titford and Nigel as MEPs. That was the time when the MEPs were pledging to put their surplus expenses into a fund to help people stricken by EU red tape, with a promise that wives and other relatives would not be taken on the payroll.

After yesterday's epic front page headline from The Sun, demanding, "Did UKIP with your aide Nige?", on the back of a page 5 story, the Daily Mail repeats the allegation today that Farage had an affair with Anabelle Fuller, who returned to Farage's personal payroll last year.

The paper thus asks, "Could Nigel Farage's 'weakness for women' be his Achilles' heel?", declaring that: "Ukip leader's love life may be his undoing at May's Euro elections".

However, a piece on Huffington Post rehearses yesterday's story, but is notable for some of the comments which suggest that Farage's private life is his own affair, and nobody else's business. That is fair enough comment, or would have been until Farage decided to mix business with pleasure. Then it became a legitimate public issue.

And Farage has most certainly been mixing business with pleasure. I recall once walking into his office in Strasbourg, only to find him in a passionate embrace with the latest intern, while Kirsten was actually in town with his newly-born child.

Later, we - the staff - had the embarrassing experience of having a fiery Kirsten storming into the office to demand from us information on what was going on. But far from being repentant, Farage gave the intern a full-time post. It thus became evident that the way to success for an attractive female was via Farage's bed.

Very much later, the Daily Mail tracked down this former employee, but she refused to spill the beans, then having her own career to think of as a full-time Brussels functionnaire. That left the paper without a libel-proof story, so the details were never published.

As for Annabelle Fuller, her relationship with Farage was an open secret. Such was their lack of caution that Farage had to be warned several times about making it too overt. He was, for instance, cautioned against taking her to Washington for a long weekend at the taxpayer's expense. But he never denied to friends and colleagues the nature of the relationship.

Once the newspapers started to pick it up, though, both emphatically denied their tryst, making ample use of no-win, no-fee legal services. More that a few journalists fell foul of the Farage sting, leaving a legacy of ill-will that could only bode ill.

The show-down with the long-suffering Kirsten, however, could not be put off forever. More than once, she had locked him out of the house when he had returned in the small hours from his drunken, womanising binges, and with one expensive divorce already costing him dear, he could not afford another.

The question thus remains as to whether Farage did a deal with public money. At the moment, no one is saying, but not a few in the party have been asking whether paying Kirsten her £30,000 salary was "hush money" for putting up with Annabelle. There had to be a reason for breaking all the promises ever made by UKIP about not hiring wives.

And now, with Mz Fuller back on the payroll, I think we are entitled to know if that is because she knows where the bodies are buried. For whatever reason, a woman with an erratic background and little to commend her is being paid a stellar £60,000 salary by Farage – plus additional fees to her PR business. 

Thus, the UKIP leader is paying his women as good as £100,000 a year from taxpayers' funds. And it is that, not his sexual peccadilloes, which is rightly in the public interest. We, like The Sun, are entitled to ask questions about these payments, and why they are being made.

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The point, of course, is that secretarial allowances are to enable MEPs to service their constituencies and perform effectively as elected representatives. For that, research is essential, an area in which UKIP generally - and Farage in particular - is dismally lacking.

As a former researcher for Farage's one-time group in Brussels, the EDD, I know only too well how vital the research role is. After I left, the role was never properly serviced. Bloom even sought my services again, but I recall my response being: "not even if hell freezes over". I now work as a researcher in a private capacity, for some decent men.

But I am very far from being the only competent researcher in the business. And for £100,000 a year, Farage could buy some serious capability. How much of the low-grade output coming out of UKIP is the result of his spending taxpayers' money on keeping his women quiet?

If he had done as I had suggested, and taken a like amount from the expenses of each of the UKIP MEPs, with additional group funds we could have set up a world-class research unit in Brussels, relying on the overhead being paid for by the European Parliament.  The aim was to rival the famous Conservative Research Department, the unit which kept Margaret Thatcher in power.

Despite all sorts of malicious rumours and ill-informed gossip, that was the real reason Farage and I fell out. I wanted the party to be research-led, pre-empting the FUD, keeping our MEPs and members properly informed and making a solid, unimpeachable case for leaving the EU. That's why, in the first instance, Booker and I wrote The Great Deception, a book Farage did his best to sabotage, seeking to prevent it being published.

On the other hand, he was already frittering away money on fruitless enterprises, on hiring his women and on topping up his already generous pension from his office expenses. The courageous Spiked online, meanwhile, deletes my comments on its own sycophantic piece, even as the sky darkens with pigeons coming home to roost.

With the likes of Spiked and others giving him an easy ride, Farage has got away with it for so long that he believes he can walk on water. But now, a number of journalists – who have also had to put up with a number of more sinister threats than just libel suits – have found ways of showing that he is just another opportunist politician on the gravy train.

That, of course, leaves UKIP members out on a limb. Yet Farage, in his own defence, asserts that his supporters "have had to develop thick skins and brave resilience when dealing with 'smears'". By this means, he dismisses the recent press as "part of a concerted campaign to undermine us which just makes us dig our heels in and wave off the Establishment". But it won't wash.

This is exactly what one might expect of Farage, but those who wish to dismiss current events as "smears" need to grow up.  It is a miracle that their leader has got away with it for so long. He has held hostages to fortune for so many years that it was only a matter of time before he got his comeuppance. If hadn't been this, it would have been something else.

Nor is this the end of it. There is much, much more in the pipeline. By the time the media has finished, the only thing left of Farage's reputation will be smoking wreckage - however long it takes. His supporters have been backing the wrong man. They need to be thinking about how to rescue the party before it too crashes and burns.

Richard North 14/03/2014

 UKIP: the direction of travel

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Despite the EU role in the Somerset flooding, the debacle over Ukraine, the corporate tax avoidance arising from EU's "free movement of capital and payments" provisions, the horsemeat scandal, the silicone breast implants scandal, and sundry other EU-inspired disasters, the latest poll on leaving the EU gives the "outers" 39 percent and the "inners" 41 percent.

With a two percent lead to those who want to stay in the European Union, you might ask what it takes actually to get people to want to leave the evil empire.

But then, most people haven't been told about the EU role in the Somerset flooding, Ukraine, tax avoidance, horsemeat, breast implants, etc., etc. In the main, all they get from the media is the low drone of assorted FUD, with very little counterbalancing intelligence on how the UK could remain in the Single Market once it had left the EU.

It is perhaps unsurprising, therefore, that the majority support the status quo, staying in the European Union. But there is more to it than that. Alongside the FUD, we've also been getting a steady drip-drip of publicity hostile to UKIP, in the Times and then the latest offering from the Daily Mail. This projects the party's London HQ as a bizarre freakshow. It paints a picture that would have most normal people crossing the road to avoid contact with the party, driving out any thought of voting for Mr Farage.

That certainly seems to be the case with at least 80 percent of the population, as the latest ICM poll on European election voting intentions indicates (below). This has 20 percent opting for UKIP, 35 percent for Labour, 25 percent for the Tories and the Lib-Dems on 9 percent. 

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Against historical performances, 20 percent is an encouraging figure, although it now puts UKIP in third place, and a very long way from the "political earthquake" promised by Mr Farage. If all he is able to deliver is third place, his credibility is on the line. But so is the credibility of the entire anti-EU movement, especially as Mr Farage wants the euro elections to be a referendum on the EU.

Furthermore, on general voting intentions, the news is even glummer. Labour stands at 38 percent, and the Conservatives creep in with 35 percent. But UKIP drops back to just nine percent in fourth place, while the Lib-Dems claw back third position with 12 percent of the poll. 

This is against a background of UKIP flatlining in the polls. Ever since the May "surge", the UKIP vote has been on the decline. Now, YouGov has the party oscillating between 11-14 percent, with very little movement out of that range for more than six months.

In a real life parliamentary by-elections, however, we are seeing much the same thing. At Wythenshaw, the party attracted only 5.7 percent of the electorate, with an overall turnout of 28 percent. In South Shields, it took a 9.4 percent share of the electorate. It took 14.8 percent share at Eastleigh, and 7.3 percent of the available vote at Rotherham.

With the one exception of Eastleigh, therefore, the party has been unable to mobilise more than ten percent of the electorate. It shows no evidence of having re-energised electoral politics, as turnouts remain poor. And, against the baseline of Eastleigh, the party's electoral support is going down. That is roughly what the polls are showing: gradually declining popular support and no sign of an electoral breakthrough.

All of that renders rather irrelevant the message of booksellers Robert Ford and Matthew Goodwin. As some time political analysts, they are trying to sell the message that UKIP has greater potential than its poll results indicate. In theory, that may be true, but it also illustrates that they are out of their depth.  

In terms of "potential", a political party dedicated to leaving the EU (supposedly) should be able to pull in the bulk of the 39 percent who say they want to leave the EU. Such people should, potentially at least, be UKIP supporters. But, as we saw last year, the party also invites some pretty sharp reaction, with 43 percent of voters declaring the would never vote for it under any circumstances. More recently, we saw UKIP as the least liked and most disliked party.

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As stories abound of bizarre happenings in the party, only so much can be put down to "smears". To be asked why he is paying both his wife and his former mistress from his official secretarial allowance (note Barroso watching in the background) is not something which can easily be ignored, especially as the legacy media have been exceptionally quick to pick up the story.

Under such circumstances, a British MP would find it hard to keep his seat - a leader of a serious political party more so, especially when he is attracting critical comment of an extremely damaging nature.

Such low-grade revelations will continue, though, because, at its heart, UKIP is not a serious political party. And the percentage of "never" voters can only increase. But, even if hostile stories are dismissed as "smears", there is something which Ford and Goodwin clearly do not understand about the party. And that "something" explains what is happening. It explains the poll results.

Essentially, UKIP is not only fundamentally unserious. It is an empty vessel, devoid of any substance. The party has been strident on the subject of immigration, openly courting the BNP vote - as Mr Farage has been happy to acknowledge - but when it comes to leadership on issues such as the Somerset flooding, Ukraine, tax avoidance, horsemeat, breast implants, etc., etc., its voice has been uncertain, weak and often contradictory.   

If it had substance, a solid core, it could ride the smears and still make converts. But the closer people get to the party and the more exposure it gets, the more apparent the emptiness becomes. Unable to counter the FUD, and lacking ability to put the EU on the spot, it seems to be losing us the wider battle, as well as its own battle for votes. It may be a "eurosceptic" party, but by no measure can it be said to be leading a coherent, much less growing, anti-EU movement.

Inertia may get it some sort of electoral victory in the euros, but the chances of it "winning" the contest outright are now receding. And, on current results, the chances of us winning an "in-out" referendum are nil. That much we do know, now we know the direction of travel. The paths of UKIP, the political party, and the anti-EU movement are diverging. The one is no longer the other.

Richard North 12/03/2014

 EU referendum: Cable boring us all to death

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Vince Cable, the Lib-Dem business secretary, has intervened in David Cameron's game, branding the Conservatives "seriously irresponsible" for promising a 2017 referendum.

Ignoring the growing clamour of voices that says a 2017 plebiscite is impossible, Cable, is talking to the The Independent, whence he chooses to make an issue over the "blight" on foreign investment in Britain. He thus warns of the "chilling effect" of the in/out referendum promise, saying it is delaying the economic recovery and putting 3.5 million jobs at risk.

He claims businessmen are now warning him on a daily basis that they would invest elsewhere to ensure they retained access to the EU's single market. "They say 'we are here because of Europe; we are not just here because of Britain'", he asserts.

Asked to name names, Cable comes up with the usual suspects, car-makers Vauxhall, BMW Mini, Ford and Nissan, adding that the same concerns were being expressed in the aerospace industry and City. British, Japanese, American, Indian and German firms had all voiced fears, he says.

This tedious little game, though, rest on three suppositions. Firstly, one has to assume that there will be that referendum, which Cable should know is impossible. Then, secondly, he must assume that the "outers" would win, which is by no means a foregone conclusion.

Thirdly, and crucially, Cable must assume that the end result would be that the UK outside the EU would no longer had access to the EU's Internal Market. Necessarily, we would be excluded from the trading arrangements that we currently enjoy. Nothing like the "Norway option" would be on offer. 

On the other hand, the EU has been willing to agree a deep and comprehensive free trade area (DCFTA) with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, which encompasses full participation in the Internal Market, without there being any immediate question of EU membership.

It does seem, therefore, beyond the realm of probability that the UK would not be able to negotiate something similar on its departure from the EU. On that basis, the most likely outcome of a "Brexit" is that trading arrangements continue unchecked.

By now, in what should be a mature debate, we should be past the low-grade FUD that Cable has on offer. We really should be able to address the arguments for staying in and departing from the EU on a more adult level, without having to put up with the tedious repetitions that Cable is resuscitating.

Sometime, one wonders whether the game is about boring us all to death, with the same mindless scare stories, forcing us into the position of ending the debate rather than suffer the tedium of yet another dire warning about losing our ability to trade with the rest of the EU.

The trouble is that Mr Cameron and his merry men are not much better, which means we have to suffer this endless round of tedium, instead of addressing the real issues attendant on our membership of the EU.

But then, one might surmise that if the pro-EU faction cannot come up with some more interesting and imaginative arguments for remaining in the EU, that itself tells its own story. A construct which relies on endless repetition of the same tedious FUD can't have very much to offer.

Richard North 07/03/2014

 EU politics: not within her gift

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If we were to run with the herd today, we would be getting excited about Merkel's visit to England, attended upon by much ill-informed speculation and comment about her intentions regarding Mr Cameron and his fatuous EU reform agenda.

In the lead for the moment - but not for very long, I suspect - is this totally vacuous comment by James Kirkup, who blathers: "But will Mrs Merkel sign up for the entire Cameron agenda, including the (pretty ambitious) timetable for EU treaty change signed and sealed by 2017?"

What will escape most commentators is the rather obvious fact that the EU currently boasts 28 members and that, in order to initiate the treaty revision procedure under Article 48 of the TEU – necessary for any meaningful reform – a simple majority is needed, i.e., 15 member states.

Thus, as we remarked with Hollande a little while back, it is not within Mrs Merkel's gift to grant Mr Cameron his wish of a treaty negotiation. And, even if she could (and wanted to, which is another matter), any changes proposed could be vetoed by any one member state, either at the signature or (in effect) the ratification stage.

On the other hand, we have been led to expect that Mrs Merkel would be concentrating on a bid to keep the UK within the EU, to which effect we can expect in the near future the usual doses of FUD to be trickling through the legacy media, all aimed at keeping us plebs in our place.

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In her address to both houses of Parliament, in a lacklustre, technocratic speech (transcript here in German), Mrs Merkel did not fail to disappoint. "We must make the European Union a better place … a strong EU needs strong institutions and strong member states representing our common interests united and confident in the world", she says ... all batting from the same hymn sheet?

On the euro, she says: "A stable, competitive European Union can combine economic success and social responsibility on a permanent basis. This requires the eurozone countries to complement the monetary union with a strong economic union, which is equipped with a clear and sustainable architecture.

"Only through a closer and more binding economic policy coordination can they prevent in the long term entering a severe crisis. That limits the contractual foundations of economic and monetary union which, in my view, must be specifically adapted and expeditious in order to sustainably stabilize the monetary union".

In English, she then told the assembled worthies, "Some expect my speech to pave the way for a fundamental reform of the European architecture which will satisfy all kinds of alleged or actual British wishes. I am afraid they are in for a disappointment".

Then she went on to say: "Others are expecting the exact opposite and they are hoping that I will deliver the clear and simple message here in London that the rest of Europe is not prepared to pay almost any price to keep Britain in the European Union. I am afraid these hopes will be dashed too".

Meanwhile, we must suffer endless drivel from supposedly "eurosceptic" MPs and others, most of them still oblivious to the reality that "reform" is simply not an option. Why we have to go through these endless rituals is quite beyond me, but I do wish they would get it over with and start focusing on the real world.

We even have Nicholas Watt, chief political correspondent of the failing Guardian perpetuating the myths. He writes: "The speech appeared to be designed to inject a dose of reality ahead of the negotiations, in which the prime minister hopes to introduce widespread reforms of the EU if he wins the 2015 general election. Cameron would then hold an in / out referendum by the end of 2017".

For once, the Telegraph cartoon has it. In the short time between my publishing it and being told to take it down, you can enjoy it here.

Richard North 27/02/2014

 Brexit: 'tis done

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The great labour is complete and I have just received an e-mail from the IEA confirming receipt. The qualifying word count is 19,999 against the competition word count limit of 20,000 - I could kick myself for leaving out the last word.

I wrote to one of my sponsors saying that, after three months of unremitting work, with not a single day off (apart from Iceland), I proposed to take half an hour off. He very kindly wrote back, suggesting that I go mad and take three-quarters of an hour. But I can't think what I would do with the extra quarter of an hour.

In the meantime, I really have enjoyed all those e-mails and phone calls, which invariably start with: "I know you're busy, but ...", just as I'm trying to grapple with the innermost secrets of the Pressure Equipment Directive and the International Financial Reporting Standards. But, no more. 'Tis done.

I'd like to thank everyone who has helped. The list is huge ... but especially The Boiling Frog for his brilliant support, to Mary Ellen Synon for her perceptive comments, and the many others who contributed - some just as much, if not more - directly and indirectly, plus, of course, the staff of the IEA.

At this point, Mrs EU Referendum wanted to convey a message, and wrote this for us. She says:
Thank goodness the Brexit entry has gone. I can assure you his "nibs" has put 100 percent effort into this, from day one in November 'till half an hour ago. It would be nice if all this effort is rewarded. However, just to be chosen to participate is pretty damn good in my book!

So, for all the support, advice and input for all the folk who helped, thank you from the bottom of my socks. I will be very pleased to be going back to Mrs EU Ref instead of Mrs DIY. Back to reality tomorrow, Richard ... the list of chores awaits you.
It's just occurred to me, that there is another report I need to do, one that's going to keep me a little busy, for a few months. "Brexit 2, the sequel", anyone?

Richard North 12/02/2014

 EU politics: a surfeit of FUD

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Yesterday was the day that we received news that Britain has lost a legal challenge to EU powers to ban short-selling in key test case. This, we were told, had major implication for the City of London's financial services.

The Government was seeking to have annulled Article 28 of Regulation (EU) No 236/2012 on "short selling and certain aspects of credit default swaps", giving power to the EU's Paris-based European Securities and Markets Authority in 2012, to intervene in national financial authorities in "exceptional circumstances", order to police financial markets. These powers were, our local government asserted, "unlawful" and an "institutional revolution".

The ECJ dismissed the UK's action and awarded cost against the government, arguing that Article 28 was designed to improve the conditions for the establishment and functioning of the internal market in the financial field. It must therefore stand.

What is particularly poignant about this, though, is that it came at the same time that the Financial Times was reporting that British banks had launched a "strong intervention" in the debate over the nation's membership of the European Union, calling for closer ties with Brussels and urging the government to raise its game in order to make the single market work.

This was an initiative from the British Bankers' Association, which sent a submission on the Treasury review of competences, arguing that the current balance of powers between Brussels and London was "broadly appropriate".

The timing could hardly have been bettered, demonstrating as it does where the power really belongs, but such events hardly seem to impinge on the ideologues who assert that everything in the euro-garden is rosy.

Amongst those is the Citigroup, which has also written to the Treasury, adding its concerns about costs to the UK economy if Britain was to leave "Europe". Citi asserts that, if the UK were to disengage significantly or completely from the single market the implications could be "dramatic".

The UK population would face a drop in living standards as a result of lower wages or a weaker pound so that the same export performance could be maintained within the EU. Jim Cowles, Citi's chief executive for Europe, the Middle East and Africa, tells the Financial Times of "mounting concern" among clients about their ability to continue using the UK as a regional hub if the country were to exit.

This, of course, is straw man territory, as no-one would sensibly argue for "significant", much less complete, disengagement from the single market.

Cowles's disingenuous remarks, therefore, make an interesting contrast with the views of the Airbus Group. UK Chief Executive Robin Southwell asserts that his company would never have achieved its success to date without a working and effective partnership of countries and companies within Europe.

"Any other economic model which seeks or offers to change the dynamic and advantageous characteristics which we presently enjoy - and believe are optimal to our delivering sustained growth and employment - would need to specifically address this quite proper challenge in a detailed and compelling manner," he then says.

Actually, those comments are fair enough, and that is precisely why we need to work up a "Brexit" plan, to ensure that valid commercial concerns are met.

In the FUD stakes, however, there is no dealing with this - Paul Polman, the Dutch chief executive of Unilever, blathering about the UK being better off staying inside the EU, rather "than kicking against the table" and voting to leave.

He says said the company could review its UK investment if Britain left the EU. "We will always look at things," he said, when asked whether Unilever could reduce its presence in the UK.

Unilever might employ 7,000 people in the UK and it is also a net exporter to the EU for its business, but this sort of ignorant polemic is entirely unconvincing. The man should mind his own business, instead of interfering with ours.

But what is interesting is the degree to which the europhiles are ramping up the FUD. One might think that these people are worried about the coming elections, as indeed is Mr Clegg, who is apparently going to argue that it is "vital" the UK stays in the EU when he addresses political and business leaders at the World Economic Forum in Davos.

Clegg is to say that membership is essential to cope with competition from countries such as China and India, apparently entirely unconscious of the irony that, while both Switzerland and Iceland have been able to sign trade deals with China, the EU has not been able to conclude deals with either China or India.

But then, the one thing we have learned about the europhiliac tendency is that they don't do irony. Perhaps, if they did, they couldn't be europhiles.

Richard North 23/01/2014

 EU politics: the drivel factory

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The New Statesman has recruited Robert Cooper, a former mandarin heralded as "one of the chief architects" of the EU's common foreign policy, his particular task at the moment to tell us why holding a referendum on leaving the EU would be "stupid",.

To achieve this monumental task, he offers three reasons, one of which is:
On a practical level, the main product of the EU is regulation. There is good regulation and bad regulation; but there is no escape. No one is going to buy British products that do not meet inter¬national standards. Those standards are set mostly by the EU or the US. If the UK wants to be at the table when the standards are set it has to belong to the EU; otherwise it will have to follow regulations that someone else has made.
That is as far as we need go, allowing us thus to observe that the great benefit of being "above the line" is never having to worry about being wrong. It is an unlimited license to produce any amount of ill-informed drivel, in the certain knowledge that it will always be welcome on the pages of the legacy media.

Any informed student of trade matters will, of course, be aware of the progressive internationalisation of trade regulation (often called globalisation), and any overview of US politics will quickly reveal as much unease in the United States about this process, and the loss of power entailed.

Equally, as far as the EU is concerned, we have charted for some time the degree to which trade regulation is initiated by international bodies, so much so that the EU has become a wholesaler and distributor of regulation rather than its initiator.

But that is no check of the Robert Cooper drivel factory. Here is a man imbued with the most profound ignorance, yet he feels qualified to pronounce on issues about which he clearly knows nothing.

Another person so imbued is Jacob Rees-Mogg MP, a legend in his own lunch hour, pontificating in the Telegraph about parliaments needing an "emergency brake" on EU legislation.

Although roundly taken to task by Autonomous Mind, this will have no impact whatsoever. Rees-Mogg is a fully paid-up member of the drivel factory, his birthright entitling him to produce unutterable tosh and to be applauded by his peers for so doing.

A junior member of the drivel machine, Mark Wallace is given license by the Guardian to ask, "Where are all the leftwing Eurosceptics?", complaining that the British Left has abandoned its "democratic tradition" of opposing the EU.

"With a renegotiation of where powers lie, and an in/out referendum likely to follow in 2017", he drivels, "we ought to see a return of that vanished beast: the leftwing Eurosceptic".

The thing he misses, of course, is that in the polarised politics of the Westminster bubble, the "left" is currently "pro-Europe" simply because the "right" is supposedly eurosceptic. But since all but a tiny fraction of the Tory eurosceptics actually support continued membership of the EU, the difference between left and right is academic. There is no difference between them.

However, the one thing that the drivel factory does, par excellence, is confuse the issues. We noted this a while back, when the Europhile tactics started emerging. They rely, it would appear, on the three-legged stool of "renegotiation, reform and scare" - anything to keep peoples' minds off leaving the EU.

At the time, the right was pushing renegotiation and the left was going for reform, while all sides were free with the FUD, to scare us away from the prospect of withdrawal. Now the drivel merges into one amorphous mess, so successfully confusing the issues that the purity of the argument has been lost.

In due course, we might even see academic papers written on this remarkable weapon, the drivel factory that won the war for the europhiles. If during the shooting war, America became the arsenal of democracy, the legacy media have become the reservoir of drivel, intent on winning the war of words that will keep us in the EU.

And so far, with the drivel factory on overtime, it looks to be winning.

Richard North 17/01/2014

 EU politics: the madness of Alexander

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"Conservative politicians risk wrecking the recovery and threatening hundreds of thousands of jobs by 'pandering' to anti-European sentiment", says Danny Alexander, the man passing himself off as Chief Treasury Secretary.

Launching a pre-Christmas anti-anti-EU blast at his coalition allies, framed as an "exclusive" for the Independent, he rehearses the same weary dirge, telling us that foreign companies could abandon their plans to invest in the UK if Tories mounted "a crude anti-EU campaign ahead" of the European Parliament elections next May in an attempt to counter the threat from UKIP.

For those throbbing with anticipation at the prospect of more words from this being, more detail can be found on the Independent website, where Alexander asserts: "The fact that some senior Conservatives are arguing that Britain should vote to leave the EU is already unsettling investors and threatening jobs and growth. Further pandering to anti-Europeans would be bad for the British economy".

The newspaper is calling this a "pre-emptive strike", opening up a second divide inside the coalition, after Vince Cable did his best to sow discord in the ranks. Alexander, is telling us that, the Liberal Democrats would actually campaign in the elections as "the party of in" and be "unashamedly pro-European".

Actually, for the party to campaign on EU issues will in itself be an innovation. We recall Lib-Dem euro-election material that completely failed to mention the EU and concentrated entirely on domestic issues.

But, if that is to be the innovation, the content is to be more of the same as Alexander "discloses" that his party will repeat the same old FUD, putting "at the heart" of the Lib-Dem campaign" the threat to jobs in each constituency if the public voted to leave the EU in the referendum David Cameron has promised in 2017.

The Lib-Dems plan to cite long-discredited "research" by South Bank University on the "3.5 million jobs" canard, this time extending it to locate that jobs that they claim will be lost if we bug out of le projet.

For the record, the ten parliamentary constituencies with the most "EU-dependent jobs" are: City of London & Westminster (75,423); Birmingham Ladywood (27,499); Leeds Central (23,313); Holborn & St Pancras (20,253); Manchester Central (18,006); Sheffield Central (15,192); Glasgow Kelvin (14,030); Nottingham South (13,443); Islington South & Finsbury (12,824) and West Bromwich West (12,615).

Alexander wants us to believe that that, "A surge in anti-European sentiment in the Euro elections would send a shiver of doubt into the boardrooms of global companies that locate in Britain because we are a gateway to the EU single market". And so we can rejoice that, "With Labour confused on Europe, and the Conservatives divided", only the Lib Dems "will be campaigning at the European elections with an unambiguously pro-European message".

I wonder if Mr Alexander can begin to appreciate the level of wild enthusiasm with which we greet this news. How can our cups not flow over with him telling us that, "Pro-Europeans in Britain have been too quiet for too long", then assuring us that, "Next year is an opportunity to make our argument heard, and the Lib Dems will make sure we take it"?

Clearly, the Lib-Dems are serious in their madness, determined to commit electoral suicide. They have decided not to try to hide their enthusiasm for the EU project but to make a virtue of it, attempting to appeal to the estimated 20 percent of the electorate seen as pro-European, including many in the top AB social group and business community.

Great Leader Clegg thus says that the UK is entering "a critical phase" in its relationship with the EU and has appointed Michael Moore, former Scottish Secretary, as his adviser on European business. Moore will report by next summer on how businesses engage with the EU and the issues they face. We honestly can't wait.

Richard North 24/12/2013

 EU politics: Goldman FUD

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Goldman Sachs has said it would move much of its European business out of London if Britain leaves the European Union. 

Frankly, I cannot think of a better reason for leaving the European Union. No great loss at all.

Richard North 05/12/2013

 EU politics: sleepwalking towards an exit?

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One of the absolutes in the minds of many who call themselves "eurosceptics" is the belief that the EU will go to any lengths to keep the UK in the Union, to the extent that they have even convinced themselves that Article 50 is a "trap" designed to prevent us from ever leaving.

However, a new poll, published in the Observer today (with more details here) indicates a certain lack of enthusiasm for Britain's continued membership, so much so that they may even be glad to see the back of us.

This comes from a "landmark survey" of more than 5,000 voters in the UK, Germany, France and Poland, carried out by Opinium for the Observer newspaper.

Amongst other things, the polling company finds that just 26 percent of British voters regard the EU as, overall, a "good thing" compared with 42 percent who say it is a "bad thing". In Poland 62 percent approve of the EU, and only 13 percent think it bad. Germany scores 55 percent good and 17 percent bad, and in France 36 percent go for good and 34 percent bad.

Significantly, though, when voters of the three mainland countries are asked about the UK's contribution to the EU, there is little enthusiasm for us, and little to suggest they will go out of their way to keep us in. Just nine percent of Germans and fifteen percent of French people think the UK is a positive influence on the EU. Even further east, the Poles can only muster 33 percent in support of the UK.

By contrast, when it comes to accommodating Mr Cameron's pretensions about renegotiating the treaties, only 16 percent of German and 26 percent of French respondents back the idea of a special deal being struck for the UK.

This brings us to the idea of Britain leaving the EU, a prospect that does not appear to worry our "partners" very much. Just 24 percent of French voters said a UK exit would have a negative effect, compared with 36 percent of Germans. Only the Poles could manage a small majority of 51 percent to say that we might be missed.

The findings lead the likes of former Tory foreign secretary Malcolm Rifkind and deputy prime minister Nick Clegg to call for an "urgent fightback" against spiralling "anti-European" sentiment, with Rifkind suggesting that there needed " … to be a serious debate about the real benefits of – as well as the real problems about – British membership of the EU". Without that, he reckons, "we could do serious damage to Britain's interests".

Clegg, on the other hand, declares that next year's euro-elections represent a key test and attacks "those intent on taking Britain out of the EU". He thus says, "Everybody knows the EU needs reform. But simply carping from the sidelines and flirting with exit undermines British leadership in the EU, fails to deliver reform and leaves Britain increasingly isolated".

Bizarrely, the man holds that the debate about Europe is no longer about who is for or against reform. "Everybody agrees on that", he says. "It is between those who believe we can lead in the EU and those who want to head for the exit". The Lib-Dems, he declares, will be the leading party of "in".

Obviously feeling the pressure, Clegg wants to challenge UKIP and large swaths of the Conservative party "who want to betray Britain's vital national interest by pulling us out of the world's largest borderless single market, on which millions of jobs depend".

As always, therefore, there is the attempt to elide EU membership with participation in the Single Market, with the usual dose of FUD about jobs. This is mirrored by Labour MP and former Europe minister Peter Hain. Predictably, he urges "pro-Europeans" to stand up and fight.

"This is a wake-up call for British pro-Europeans that Britain", says Hain, "especially if the Tories win the next election – is heading for an exit from the EU which would be an utter disaster for British jobs, prosperity and influence in the world". But, he then says, "it is equally a wake-up call for the Brussels Bubble, which is totally out of touch with Europe's citizens".

Richard North 01/12/2013

 EU politics: John Major redefines the word "helpful"

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John Major has praised his successor for his current handling of the EU, but then tells him he must be "smart enough" not to make impossible demands in his renegotiation of Britain's EU membership terms following a Conservative general election victory. He should instead negotiate "with the grain of evolving views" in Europe.

This is according to the Guardian, reporting on him speaking at the Institute of Directors. But he goes on to say that "... the British position is far stronger than many believe – not least due to the significant personal alliances the prime minister has formed with his European counterparts – though the manner of our negotiation will be key".

Major also issued a stark warning of the dangers of leaving the EU. "The EU would be diminished. The UK would be isolated. I am no starry-eyed Europhile but it would be a lose/lose scenario: a truly dreadful outcome for everyone".

"Of course, we would survive, but there would be a severe price to pay in economic well-being, in jobs and in international prestige", he added, telling us that: "In a world of seven billion people, our island would be moving further apart from our closest and largest trading partners, at the very time when they, themselves, are drawing closer together. This makes no sense at all".

Britain would have to negotiate its exit which could cost billions, and then could find itself still having to pay for access to the single market.

Then we get to the FUD on Norway. As a non member, Major says, it pays 80 percent per capita of what the UK pays as a full member. "It would still be obliged to implement EU regulations but would be unable to defend the City, or any other sector, from harmful new legislation, while inward investment to the UK would fall away".

This pig ignorance is from the man who brought us Maastricht and, in forcing it through the Commons, all but wrecked the Conservative Party. And it is from that debacle that UKIP emerged, now to trouble his successor so grievously.

Thus to have praise from Mr Major, or even advice, is not necessarily a blessing. But the man, it seems, has some ambitions in taking a more role of making interventions that help Downing Street. If that intervention is "helpful", one can only assume the meaning of the word has been redefined.

Richard North 29/11/2013

 EU politics: we await the spectacle

As the immigration issue grips British politics, we are seeing several interesting phenomena, not least the intervention of Romania's Foreign Minister, Titus Corlatean.

He does not expect a "flood" of migrants from his country to come to Britain after 1 January and attacked the way the immigration debate had been conducted in the UK. He has thus called on Mr Cameron to reject "the xenophobic and populistic and once again sometimes racist attitudes which are promoted by some other British politicians".

Meanwhile, Downing Street has said the Government is still looking at what more action could be taken on benefits for immigrants. The Prime Minister's Official Spokesman says: "The Government is taking action. Of course we are looking at what more can be done".

Asked when the Prime Minister's thinking in this area would become clearer, he declined to provide any timescales. The spokesman was also asked what the Government's stance would be if the next steps contravened EU law. He would only say: "The Government acts within the law".

That is going to be the crunch issue. Within the framework of EU law as it stands, the Government has no scope for manoeuvre in tackling its own defined target issue of cutting benefit opportunities for migrants.

Thus, Mr Cameron can either reject EU law, and take the consequences – which would probably give him a short-term poll boost, or he can try a fudge, only to be ripped apart by the commentariat, probably taking a hit in the polls and possibly giving UKIP a boost.

There again, Mr Cameron could perhaps have a secret weapon up his sleeve, ready to unleash on the unsuspecting migrant population, solving for once and for all what has hitherto seemed an intractable problem.

Up to press though, we have had no news of Mr Cameron's consultation with the tooth fairy, but it is going to take something of that nature to pull this particular rabbit out of the hat. We wait in awe for the magic trick, to end all tricks. This is going to have to be pretty spectacular.

Richard North 26/11/2013

 EU Referendum: losing the argument

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The last week or so, I've been getting stuck into writing our "Brexit" submission for the IEA. It is really hard going but, because it is a competition, and I'm determined to put up a good show, it would be unwise of me to reveal too much of our hand just yet.

The emphasis on writing, though, did not stop me picking up on last week's YouGov poll which put sentiment on leaving the EU on a par with staying in, representing the end point in a continuous, year-long decline in support for leaving.

Despite the importance of the news, it has been largely ignored by the legacy media and only now, five days after the event, does the Telegraph get round to publishing an analysis on the poll result – also published on the YouGov website.

Needless to say, Kellner, husband of Baroness Ashton, puts on his own spin, with his piece headlined in the Telegraph: "Britain is learning to put up with Europe". The hard reality of life on the outside is weakening the eurosceptic case, goes the sub-head. Britain doesn't like the European Union, but it's prepared to go along with it.

However, while that top-line spin may be highly debatable, that does not make either the poll or Kellner's more general conclusions wrong. The latest findings, he says, reflect a gradual shift in underlying sentiment (see graph below).

Last year, YouGov conducted twelve surveys in which it asked people whether they would vote to leave or stay in the EU. The gap between the two sides never dropped below ten points; on average, 48 percent said they wanted to leave the EU while 32 percent said they wanted to stay in.

The pattern this year has been different. Leaving aside the blip in opinion around the time of the Prime Minister's January speech, most of the YouGov surveys since February – and all since mid-August – have reported leads of less than ten points. Much of the shift has taken place among Conservative supporters. Most of them still want to leave the EU, but not by such massive margins as a few months ago. 

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Kellner reminds us that, since the beginning of this year, his polling company has regularly asked people about the consequences of leaving the EU. The results have shown no clear trend. Voters have been evenly divided on the economy, jobs and prosperity; few think Britain's influence in the world would increase if we left the EU. There, he avers. nothing in these figures to explain the narrowing of the gap since the summer.

On the other hand, if the hype on immigration is to be taken at face value, we might expect opposition to the EU to be hardening around now, says Kellner.

We have found repeatedly, he says, that a huge source of resentment towards the EU is Britain's inability to keep out immigrants from other member states. The final, transitional, curbs on people settling her from Romania and Bulgaria end in January. This prospect has prompted many news stories and much debate in recent weeks.

The latest YouGov poll for the Sunday Times shows how much Britons dislike this state of affairs, with 70 percent wanting to end the right of EU citizens to come to Britain.

Only 31 percent of respondents accepted the argument put forward by some economists and business leaders that immigration in recent years has been good for Britain's prosperity; 57 percent think our economy, and not just social harmony, has suffered.

However, when YouGov asked people what should be done about immigration from the EU, something curious happened. Says Kellner, we gave people three options – support continued free movement because there is nothing wrong with it; put up with it because we need to obey EU laws even though we don't like it; restrict the right of EU citizens to settle in Britain, even if this means breaking EU laws.

By far the biggest group, 42 percent, wanted Britian to break EU laws and change the rules; 22 percent were happy with the present system, while 20 percent thought we should put up with them even though we don't like them. So, while the present system was disliked by three-to-one, voters were evenly divided (42 percent each) on whether Britain should defy the EU or not.

Kellner thinks these findings provide a clue to the gradual shift in attitudes to EU membership. It has nothing to do, he asserts, with positive enthusiasm for the EU. This remains in short supply.

Today, he says, the question that the referendum debate implicitly poses is, not "do we love the EU? " but "should we put up with it?" He suspects the public mood has shifted not because the positive case for British membership has gained in appeal, but because, as the prospect grows of a referendum in the not-to-distant future, the dangers of departure loom larger in people's minds.

That would be the status quo effect kicking in, and it's a bit early for that. Nevertheless. Kellner says it's not that more people than before think departure would, say, be bad for jobs, but that this issue influences voters more than it did when a referendum was a more distant prospect. The prose of economic calculation is beginning to count for more than the poetry of sovereign pride.

As a result, the man asserts that more of us think we must put up with the EU, despite its faults, rather than take the risks of leaving the club. Indeed, this is roughly the signal that Cameron and William Hague have been sending, as they make clearer than they have in the past that they want Britain to stay in the EU.

Kellner then at least has sufficient humility to qualify his findings with the phrase, "if this analysis is right, then both sides have clear challenges".

Opponents of the EU need to persuade people that (for example) the Confederation of British Industry is wrong, and that leaving the EU would actually be good for jobs and investment. Supporters of the EU need to persuade voters that there is a positive case for the benefits of membership, not merely a negative case for grudging acceptance that it is the less dangerous of two unattractive options.

The man is surely right when he says that "both sides have clear challenges", but his analysis is perhaps not as complete as it could be. Returning to the immigration issue, clearly a lot of people agree with the UKIP diagnosis – which the party mistakes for support – but they do not agree with its solutions, such that they are. Tactically, I think Farage has got it wrong – badly wrong. People share common cause with UKIP about the effects of mass migration, but it is not the vote-winner he thinks it is.

As to the anti-EU sentiment, it may be that the result is a statistical blip, but it does follow the trend and accords with other polls. And that means UKIP is losing the argument. If anything, there is an inverse correlation between the support for UKIP and support for leaving the EU. With the modest increase in support for UKIP, we have seen a decline in the enthusiasm for leaving the EU.

Now, Kellner might interpret the slippage as meaning that more of us think we must put up with the EU, despite its faults. But there are plenty of other interpretations. Not least, as UKIP has reinvented itself as an all-purpose political party, it is gradually vacated the field when it comes to arguing the case for leaving the EU.

Moreover, it has consistently refused to offer a credible (or any) exit plan and it has been way behind the curve on the Article 50 debate. It press effort is abysmal, and it is not making any serious attempt to counter the FUD generated by the other side.

Contrary to Kellner's assertions, therefore, we could simply be seeing a reflection of the inadequacy of UKIP as a campaigning force. Having usurped the position as representing the anti-EU movement, it has actually walked away from the battle and is now losing the argument.


Richard North 18/11/2013

 Brexit: Bruges Group – Part III

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Although Mary Ellen Synon's views on the timing of Cameron's referendum were highly illuminating, very recently the prime minister was forced to concede that we would be looking for a "substantial re-writing" of the treaties before a referendum would be called.

That changes the calculus, making a treaty convention a requirement and adding years to the referendum timetable. Thus did I open my talk to the Bruges Group with an explanation of why a 2017 referendum is no longer a realistic proposition.

After next year' s euro-elections, the first task of the MEPs will be to approve a new Commission and it will not be until the end of the year that they will be in a position to organise a convention. Thus, we don't see that starting until, most likely, the spring of 2015 – the start almost coinciding with the start of the UK general election campaign.

From there, we cannot expect an IGC starting until early 2017 and not complete until the end of the year, with the signing the following year. Only then can the ratification process start and, under the UK "referendum lock" provisions under the European Union Act of 2011. And that will be a "yes-no" referendum.

The good news is that a treaty referendum will be easier to win, especially as the "colleagues" will be running the show and will insist on piling in new integration measures. And if that is in 2018, an "in-out" could follow soon after, but my best guess is that we're looking at some time after the 2020 general election.

At the best, therefore, we have eight of more years to prepare for the fight and, it was with this in mind that I devoted the next part of my talk to jam, ignorance and other things, in a lead up to taking the "Norway Option" and Article 50.

The "jam" story, of course, is the "Clippy" McKenna saga, the lady who found herself unable to label her apple-based jam as "jam" because the sugar content was too low. The crucial point was that "Clippy" had been caught by the Jam and Similar Products Regulations 2003, which implemented Council Directive 2001/113 EC.

It was that which allowed Vince Cable to bring an amendment of the Regulations into the ambit of his "Red Tape Challenge", promising to cut the "EU nonsense", while the media turned up the outrage over "barmy" EU regulations.

However, the Directive and the UK Regulations were actually implementing Codex alimentarius standard STAN 79-1981, which we would have implemented whether we were in or out of the EU. But the really interesting thing was that neither Vince Cable, George Eustice, the minister piloting the amendments, MPs nor the entire media corps showed any awareness of this additional layer of global governance.

Most technical food standards are now set not by the EU but by Codex Alimentarius, under the aegis of the Food & Agriculture Organisation (FAO), part of the United Nations, based in Rome.

The trouble is that this top layer of government is virtually invisible. It hides in plain sight, obscure, dispersed and largely unknown. We met it when we were working on the "Norway Option" film, interviewing Bjorn Knudtsen, the chairman of the Codex Fish and Fisheries Product Committee.

With fisheries being a vital economic interest to Norway, it has ensured is plays an active role in the formulation of the rules covering the marketing of fish and fisheries products worldwide, not just in the EU/EEA area.

The way the system works is that there are dozens of international "standards setting" organisations which produce "soft law" (so called "diqules") which are handed down to member states such as China and the United States and, in our case, Regional Integration Organisations (RIOs) such as the EU.

If the international organisations are the "manufacturers", the EU becomes the "wholesaler and distributor", packaging and processing the laws for "retail" distribution to the Member States.

The point at issue, though, is that in the setting or "manufacture" of standards, Norway gets a greater say than the UK which, as part of the EU, gets one twenty-eighth of the EU vote, which acts on a "common position" agreed by consensus.

Thus, in our interview with Bjorn Knudtsen, as far as he was concerned, when it came to formulating food standards, Codex is the "top table". So, when David Cameron tells us we must be in the EU on order to stay at the top table, he is wrong.

But there is not one "top table". There are many, and they are not in Brussels. For instance, there is the FAO in Rome, UNECE in Geneva, the OECD in Paris, ICAO in Montreal, the BIS in Basel and the UNFCCC in Bonn.

Norway is, in fact, a supreme player at these "top tables", exercising huge influence on a global stage, equal with the EU. Thus, we don't need to be in the EU to enjoy such influence. On the contrary, leaving the EU would, for us, represent a massive restoration of influence, putting us on an equal footing with the EU.

Everything we have been told by David Cameron and others about the need to stay in the EU is the opposite of the truth. Getting out of the EU would improve our position immeasurably.

The question, therefore, is not whether we should leave but how, and the answer is Article 50 of the Lisbon Treaty. And here, we really need to get past the opposition to its use.

We need to recognise that the Article does not create the right of a Member State to leave. It simply recognises the Vienna Convention right, setting a negotiating framework and obliging the remaining Member States to negotiate. And the treaty break can occur at any time an agreement is reached, but the default position is automatic exit after two years, in the absence of an agreement.

However, to unravel decades of integration, it is most likely that negotiations would take a lot longer than two years, so the best idea is to use EFTA/EEA membership as a halfway house. That protects the Single Market, it offers stability and predictability and it reduces the impact of FUD, countering the status quo effect, making a referendum more winnable.

But, by then distancing ourselves from the EU, the "double coffin lid" of global government is revealed. With that, we have to go back to Churchill's 1948 vision of a hierarchical structure of global governance. As constituted, the ramshackle system that has emerged lacks visibility, accountability and any element of democracy. 

Fixing that is a very necessary part of creating a post-EU settlement and we need to open up a debate on where we are going in our post-EU world. Therein lies our ultimate freedom from the European Union.


Richard North 11/11/2013