EU Referendum: a change of tactics?


Although the BSE campaign and its fellow-travellers have been pouring out a non-stop torrent of FUD, the Prime Minister – as effective leader of the "remains" - has not been amongst those prominent in the use of scare tactics.

For him then to come out with a scare story about the Le Touquet Treaty, and its possible discontinuance if we leave the EU, is something of a new development.

As it stands, the treaty can be ended at any time by written notification, the termination taking effect two years after the date of the notification. Thus it is always possible that the French could end the treaty if we leave the EU, perhaps giving notice at the same time we sent our Article 50 notification to Brussels.

However, outside the EU – and in any event – we could repudiate the 1951 Convention on the Treatment of Refugees (and the 1967 Protocol), and also the European Convention on Human Rights.  Freed of such obligations, we would be well-positioned to counter any action taken against the UK. Should the French allow migrant free access to the ports (and Channel Tunnel), we could simply pack them on a return ferry and send them back to France.

This could perhaps lead to an unedifying situation with one or more ferries carrying thousands of refugees shunting between British and French ports, prohibited from discharging at either, until one or other of the parties blinked.

For this to happen would be no more in the interest of the French than the British. It was in the interests of regularising the situation that the French signed the treaty in the first place.

Even without it, there are carrier liability provisions in place which impose heavy fines on ferry companies and Eurotunnel for permitting access to undocumented passengers. So, treaty or not, large numbers of would-be asylum seekers would be denied passage. As a result, you would be seeing camps spring up in Calais, just as they did before the Le Touquet Treaty.

With the treaty in place, the French have a considerable degree of leverage over the British. They have been able to extract, via the Evian Arrangements, many millions in cash from the British taxpayer, to assist the Calais authorities in dealing with the problem.

For various reasons, therefore, it is likely that treaty would remain in place after the UK left the EU – for the very reasons that such treaties are upheld. They are, as White Wednesday points out, beneficial to both parties.

Therefore, that Mr Cameron should choose an issue so transparent a scare story that even Vote Leave could see though it suggests something more profound than just opportunistic propagandising. Either he is losing his grip or he is changing his tactics.

Here, one should note that the comments were made in a prepared speech to the Policy Exchange on prison reform. They were flagged up well in advance, sufficient for newspapers to run overnight headlines on the "scare".

This points to premeditation, supporting a view that we are seeing a deliberate change in the "play". And there are further indications of this being the case in this Guardian piece, where Mr Cameron talks of the value of EU membership in assisting our fight against terrorism.

But if we're seeing a change in pace, that might have considerable implications for the referendum campaign. Rather than play the "deal" card and go for an early (June) referendum, relying on a poll boost from public approval, the Prime Minister might have decided to play the long game (if that had not always been his intention).

The point at issue here is that Mr Cameron could expect a boost of twenty points of more from bringing a deal back from Brussels which the public perceived as "good", contrasted with a smaller but none-the-less significant boost to the leavers in the event of the deal being seen as poor.

Given that we have seen various polls giving the advantage to the leavers, at a point where a change in sentiment might actually mean something, this could be enough to convince Mr Cameron to return to safer territory and argue the broader case for EU membership.

This, necessarily, would require Mr Cameron to put distance between him and the deal to be brokered in Brussels in ten day's time. If this is his "play", then we must expect some downbeat mood music over the next week or so, preparatory to an orchestrated failure of the "summit". This piece from the BBC on Portugal might be an early example.

Most likely, there will be some carefully stage-managed objections, followed by Mr Cameron adopting a "battling for Britain" pose and rejecting the deal – thus buying him time to build on his alternative scenario. He could then come back some time later with a marginally better deal and thus claim victory.

This then puts into perspective the way Mr Cameron is gaming the designation process, brought into high profile by a piece from Asa Bennett in the Telegraph. By keeping the rival leave campaigns in the dark as to when he will start the designation, they are forced to devote their energies to the designation competition, rather than the main campaign.

In particular, Mr Bennett has picked up on the possibility that Mr Cameron could fold the six-week designation process into the 10-week referendum period, leaving only four weeks for the campaign proper.

Interestingly, after Booker had raised this possibility, we were referred to a debate in the Lords when Ukip's Lord Willoughby de Broke gained from FCO minister Baroness Anelay an assurance that this would not happen.

On 18 November last year, she stated that "the referendum period will be a minimum of 10 weeks and in advance of that is the designation period". The Baroness went on to say: "The two cannot be conflated … there is no way of concertinaing it, if I can put it that way".

That contradicts a typically ill-informed piece on the BBC website which states (wrongly) that the Electoral Commission will publish details of the designation process once David Cameron has named the date for the referendum. As we know, there does not have to be any linkage between designation and the referendum date.

The BBC suggests that Mr Cameron could make an announcement as early as Monday 22 February, "if a deal on his draft renegotiation package is agreed by EU leaders the previous weekend". But, as long as the designation is not folded into the referendum period, his deadline for a referendum on 23 June is on 9 March.

Allowing that Baroness Anelay is calling it correctly (although there seems no legal bar to a later date), if by 9 March the designation process has not started, then there cannot be a referendum on 23 June.

However, even if the regulations are laid by this date, that does not mean there will be an early referendum. Mr Cameron could call for early designation and then still leave the referendum until next year. In this context, it should be noted that in the Scottish referendum, the campaigns were designated on 23 April 2014, with the referendum held just under five months later on 18 September.

If Mr Cameron is playing the long game, he could launch the designation period early and then leave the campaign groups on tenterhooks, leaving the announcement of the referendum date to the minimum ten weeks before the poll, perhaps at the need of August 2017, for an October poll.

Significantly, though, the Electoral Commission has already put the main campaigns on notice to prepare preliminary submissions for designation by March, which suggests that there is not going to be a formal announcement any time soon.

That also would make sense, as it is to Mr Cameron's tactical advantage to have the rival leave campaigns fighting each other for as long as possible. And even when that battle is over, there is the exit plan to agree – an issue which the "leave" camps have been evading and which could spark an even bigger battle.

All in all, it seems, we're back in Northern Irish political territory where it is said of the political situation, if you think you know what's going on, you haven't been listening. But that notwithstanding, my money's still on the long game.

Richard North 09/02/2016 link

EU Referendum: learned nothing, knows nothing


The latest encyclical from Vote Leave's Dominic Cummings has hit the inboxes of devotees and others, listing nine "lessons" for campaigners. Soon enough it will be posted on the illegible website, where only a few more people will manage to read it.

In better times, I might have been inclined to give these "lessons" a detailed analysis – just for the intellectual exercise. But such self-indulgence could scarcely add to the single observation that, in seeking to offer us so many "lessons", Mr Cummings is simply demonstrating his failure to learn the single most important lesson of them all.

This comes not from a lesser mortal such as myself, but from the undisputed master, Sun Tzu, whose choice of words we reproduced earlier and evaluated more recently, all to convey the crucial point. No campaign is ever going to succeed unless strategy is developed with reference to the enemy's intentions, and then continually modified to take account of circumstances as they develop.

If there weren't such thing as an enemy – such as our Prime Minister who will take to the field in due course – then Mr Cummings's nine "lessons" might be useful in a Janet and John sort of way. However, the absence of any serious attempt to divine the enemy's intentions renders his attempts at strategising almost completely valueless.

This is evident in his first item of instruction, where he tells us that we must "persuade people that the scare stories about a 'leave' vote are wrong" – a focus on neutralising the FUD that we were looking at three years ago. But since then we've seen Mr Cameron adopt a triangulation strategy which largely renders the fight over FUD irrelevant.

Ideally, Mr Cameron would like us to engage in a stand-up fight with the opposition, preparing the ground for him to waft into the "moderate middle". We will then find him "sharing our pain" and positioning himself to take the moderate view, graciously acknowledging some merit in both side's claims.

For his second "lesson", Mr Cummings then wants us to "build a dense national network of business supporters to explain locally the benefits of a 'leave' vote". This is all very well – but for our experience in this matter. By and large, we find most business people are too busy running their businesses to make reliable campaigners.

Where our instructor skids badly off the track though, is in his third "lesson". Here, he tells us that "we must explain that the choice is not between 'change' versus 'status quo'". Not only does the EU takes more power and money every year, says Cummings, "the official EU plan is now for another Treaty centralising more power in Brussels".

The problem with that stance is that we're kicking at an open door. Mr Cameron probably has no intention of selling us the "status quo". Instead, he too will be attacking it - as he already has done, telling us we need a "new relationship". To resolve that, he will offer us the "British model", neutralising any complaints we might make. 

I suppose, though, that we must concede something to Mr Cummings when he tells us that we must explain how a "leave" vote means we will end the supremacy of EU law and take back vital powers over issues such as tax, regulating our economy, migration and so on. This is our fourth "lesson", and if you and your audience can stand the boredom, be my guest.

Likewise, we can humour Mr Cummings on his sixth "lesson" and explain how the EU is going in the wrong direction, with economies in debt and unemployment rising. There is always room for negative campaigning as a baseline, although the Stokes precept suggests we go lightly on this.

But we will not agree that we should "explain how the money we will save could be better spent on our priorities, like the NHS and fundamental science research", etc., etc, expressed in terms of the "£350 million per week we send to Brussels". Apart from the fact that the figure is misleading (we do not pay that sum), getting into a bun-fight over money is a big no-no.

Nor do I see any value in explaining how a vote to "leave" will help Europe - not just Britain. It's a nice thought, but David Cameron got there first. We'll simply be fighting a battle over who is the nicest of them all. That isn't going to win us any Brownie points.

That brings us to "lesson" eight, where we are supposed to "explain the record of the Establishment" and how they have "consistently misunderstood the process of European integration". "They have", Cummings tells us, "consistently made wrong predictions. They have consistently promised things that have not happened. They cannot be trusted". 

"Whitehall", in Mr Cummings's opinion, "has no answers apart from the same people sitting in meetings and failing every year". He thus instructs us: "We need a new path".

And now to the finalé – lesson number nine. Firstly, though, we must bear in mind Mr Cummings's warnings about people who have "consistently misunderstood the process of European integration", the "establishment" which has consistently "made wrong predictions" and "promised things that have not happened". They "cannot be trusted".

With these warnings in mind, we are prepared for the stroke of absolute genius from Mr Cummings. After we vote to leave, he says in his ninth lesson, "a new government team will negotiate a new UK-EU deal". Yet is this not the Establishment? Is this not the very same Whitehall, about which Mr Cummings has been so uncomplimentary? 

Nevertheless, he believes that their deal should be put to the people in another vote. According to Cummings, we can reassure people: "You can vote leave safely because we must have another vote on the new deal - it is the only sensible path for our democracy".

What he doesn't tell us, of course, is what happens if Whitehall delivers a bum steer. What happens if we are forced to vote against it – after the Article 50 negotiations have been completed. What then, Dominic?

Clearly, our man has learned nothing. Desperate to avoid coming up with a "plan", he does not understand that, if Mr Cameron reveals his bright, shiny new "British model", enough people could vote for it to win the referendum for him.

Therefore, we need to be quick off the mark. As soon as it emerges, we must tell as many people as possible about its disadvantages. But then we must offer an alternative vision. We cannot rely on the men in Whitehall to write it - we have to do this ourselves. And, to go with that, we must reassure people that there is a credible way of delivering our vision - the so-called exit plan.

But these "lessons" are not for Mr Cummings. He's happy to trust the untrustworthy Whitehall to define our new deal. And this is the "genius" we should trust to lead the campaign? 

We trust not in Cummings.

Richard North 04/01/2016 link

EU Referendum: back on the treadmill


The Politico website on Christmas Eve ran a speculative piece on Angela Merkel and François Hollande having suggested "a counter offer of three years to Cameron's initial demand of a four-year ban on social benefits for EU migrants".

The source cited is an anonymous "French official with knowledge of the negotiations", which means that it is unattributed and unverifiable. Its evidential value is nil.

However, that hasn't stopped the legacy media's finest from running the story for the Boxing Day editions, despite the slender provenance of their stories. So far, we've see the Telegraph, the Independent and the Express run with it.

This, in itself, is interesting. Very often, the Christmas period will kill a story as it fails to leap the gap and the lose interest in it. But the fact that they're willing to run a non-story over the break suggests that there is a determination to keep the issue going, and to build on the momentum.

Sadly, this doesn't mean that the media is going to be any more careful in its choice of material, or expend any effort in verifying its sources. And nor can be expect any slowdown in the volume of uncritical re-tweeters, indulging the media coprophagia with homage of their own.

The thing is that, having regard to the strict terms of the treaties, and of recent ECJ judgements, there is almost certainly room to fudge a deal within the framework of existing EU law.

In terms of the ECJ, we have the Dano judgement, in which we were reminded that "free movement was a qualified right and not an unconditional one", and always had been.

Then there is the more recent Alimanovic case. In this, rather interestingly, the court extended (or clarified) the Directive 2004/38 right of a Member State to withhold benefits if the "become an unreasonable burden on the social assistance system".

Specifically, we see the court conceding that, while the grant of a specific benefit to a single applicant could scarcely be described as an "unreasonable burden", the Member State concerned is entitled to consider the accumulation of all the individual claims which would be submitted, in determining whether or not the burden was unreasonable.

This latter case also concluded that Member States were under certain circumstances permitted to refuse non-contributory cash benefits to foreign jobseekers, even though they constituted "social assistance" and were paid to their own nationals. Remarkable, these do not contravene the principle of equal treatment.

While it is often the case that the ECJ is extending the bounds of integration, what we are seeing here is the court gradually unpicking certain elements of free movement which, cumulatively, could give EU lawyers more room than is supposed. They may end up with enough wriggle-room to accommodate some of Mr Cameron's needs without needing treaty change.

By February, therefore, it is possible that the "colleagues" will have cobbled together something superficially convincing, that our Prime Ministers can parade as a concession.

Even with a complete deal on this particular issue though, Mr Cameron hasn't got enough to go to the country and make a convincing case. There are still another three "baskets" to be sorted – not least the "ever closer union" and protection for the non-eurozone.

It may be quite significant, therefore, that we see Reuter's John Lloyd bring up the Armellini article, which he applauds, telling us that a two-tier Europe (and with it Associate Membership) is an idea whose time, many more than Armellini believe, has come. It would be, Lloyd avers, "an enormous political transformation".

Thus, while the media is cranking up the treadmill and concentrating on the benefits issue, the wider agenda is still running free, and there "colleagues" have yet to focus on reining it in. But that is where the developments – and the interest – will lie.

Richard North 26/12/2015 link

EU Referendum: the Tusk response


In response to David Cameron's letter to Donald Tusk last month, we now have the formal response to what the European Council President calls "a significant and far-reaching agenda".

From Tusk himself, the purpose of the letter is to let Mr Cameron know where the Council stands "on the issue of a UK in/out referendum" before it is addressed at the December meeting.

Notably, Mr Tusk makes no reference to "demands", which is unsurprising: Mr Cameron does not in his letter refer to them. Despite by now thousands of articles referring these non-existent "demands", what the Prime Minister actually did was write a letter "setting out the areas where I am seeking reforms".

What Mr Tusk does, therefore, is note that, in November, Prime Minister Cameron "set out the four areas where he is seeking reforms to address the concerns of the British people over UK membership of the European Union". Unlike the media, he is thus demonstrating that he is able to read.

Following Cameron's letter, in close cooperation with the Commission, Tusk and his officials "held extensive bilateral consultations at Sherpa level with all Member States". They also discussed Mr Cameron's letter with representatives of the European Parliament.

In the view of Mr Tusk, the issues raised by the British Prime Minister are "difficult". At the same time, he says, "there is a strong will on the part of all sides to find solutions that respond to the British request while benefiting the European Union as a whole". He then looks at what he calls the "four baskets" mentioned by Mr Cameron, and "briefly" sets out his assessment of where the Council stands.

On the "relations between the euro ins and outs", he says, "we could search for an agreement around a set of principles that will ensure the possibility for the euro area to develop further and be efficient while avoiding any kind of discrimination vis-à-vis Member States that are not yet, or, in some cases, will not be part of the euro".

This is a key area of concern for the British government, mentioned not only by Mr Cameron but also by George Osborne. This is very much our "two-tier Europe" writ large. And Tusk says that the Council is "looking into the possibility of a mechanism" that will support the principles of non-discrimination.

What he seems to have in mind may be a consultation process, "allowing Member States that are not in the euro the opportunity to raise concerns, and have them heard, if they feel that these principles are not being followed". This, however, he says, must not be "a veto right".

Whether this will be sufficient for the UK government remains to be seen, as there are no details offered. We don't get past the willingness to "search for an agreement" and the idea of an unspecified "mechanism". This is pretty vague and non-specific stuff.

The next "basket" had Mr Cameron talking about "competitiveness". And – it seems - "everybody agrees on the need to further work on better regulation and on lessening the burdens on business while maintaining high standards". Tusk adds: "The contribution of trade to growth is also very important in this respect, in particular trade agreements with fast growing parts of the world".

That said, again we are offered nothing substantive. In fact, we are offered nothing at all. There is agreement with Mr Cameron's concerns, but stating that is as far as Mr Tusk is prepared to go.

This brings us to the third basket on "sovereignty". Mr Cameron, you will recall, wanted to end Britain's obligation to work towards an "ever closer union" as set out in the Treaty. It was very important, he said, "to make clear that this commitment will no longer apply to the United Kingdom". Furthermore, Mr Cameron wanted this done in "a formal, legally-binding and irreversible way".

Now, there can be little dispute that, for the Council to concede this, a treaty change is needed. After all, Mr Cameron wants the words of the treaty and their essential objectives changed.

But all we actually get from Mr Tusk is a fairly anodyne statement that, "there is wide agreement that the concept of 'ever closer union among the peoples' allows for various paths of integration for different countries". He adds: "Those that want to deepen integration can move ahead, while respecting the wish of those who do not want to deepen any further".

Whatever complexion you might wish to put on this, it is fairly evident that it does not concede the sort of detail that Mr Cameron was expecting to have discussed. Furthermore, while there limited scope for those that want to deepen integration to move ahead, the scope is limited. And it does not allow for the eurozone to move ahead – without the approval of the rest of the Community.

On that basis, respecting the wish of those who do not want to deepen any further is rather moot. In most respects, the advance guard cannot advance.

Additionally, Mr Cameron wanted "to enhance the role of national parliaments, by proposing a new arrangement where groups of national parliaments, acting together, can stop unwanted legislative proposals". He was, though, prepared to discuss the precise threshold of national parliaments required.

Couched in these terms, we are looking at something fairly weak, but it still mounts a challenge to the legislative monopoly of the EU institutions, giving national institutions what amounts to a veto. It also constitutes a major challenge to the European Parliament.

This would also need a "full-on" treaty change, as would Mr Cameron's third "proposal", that the EU's commitments to subsidiarity should be fully implemented, with clear proposals to achieve that.

Yet Tusk's response amounts to the vague statement that: "There is also a largely shared view on the importance of the role of national parliaments within the Union as well as strong emphasis on the principle of subsidiarity". This does not even meet Mr Cameron half way.

That brings us to the "fourth basket", covering "social benefits and the free movement of persons". With no indication that he is being ironic, Tusk describes this as "most delicate", saying it "will require a substantive political debate at our December meeting".

Says Tusk: "While we see good prospects for agreeing on ways to fight abuses and possibly on some reforms related to the export of child benefits, there is presently no consensus on the request that people coming to Britain from the EU must live there and contribute for four years before they qualify for in-work benefits or social housing".

In the view of the Council President: "This is certainly an issue where we need to hear more from the British Prime Minister and an open debate among ourselves before proceeding further".

With that, it is Tusk's assessment that "so far we have made good progress. We need some more time to sort out the precise drafting on all of these issues, including the exact legal form the final deal will take". In his view, "We also have to overcome the substantial political differences that we still have on the issue of social benefits and free movement".

It is now expected that the December European Council should address all the political dilemmas related to this process. Based on a substantive political discussion, Tusk thinks we (the Council) should be able to prepare a concrete proposal to be finally adopted in February.

This actually seems extraordinarily optimistic, given that the Council has yet to concede most of the key issues, or even recognise their importance, beyond conceding that they are "difficult".

Nevertheless, Tusk says he will act as "an honest broker" but all Member States and the institutions "must show readiness for compromise for this process to succeed". Our goal, he says, "is to find solutions that will meet the expectations of the British Prime Minister, while cementing the foundations on which the EU is based".

In his concluding remarks, Tusk tells us that uncertainty about the future (is there uncertainty about the past?) of the UK in the European Union is a destabilising factor. That is why, he says, "we must find a way to answer the British concerns as quickly as possible".

We need to be united and strong, in "our common interest and in the interest of each and every EU Member State", he says, then finishing with the statement: "The UK has played a constructive and important role in the development of the European Union and I am sure that it will continue to do so in the future".

Whether or not that final statement is merely extruded verbal material or something more profound is not really an issue. What matters is that, despite the insistence of the media and others that the UK is not asking for much, the removal of "ever closer union" and the parliamentary vetoes are a big deal for the EU. They amount to fundamental changes in the way the Union is structured, its primary objectives and the way it does business.

Equally, as Mr Osborne made clear, separation of the eurozone and the non-euro states is also a big deal. This is not something that can be resolved with a few bland statements of intent. Like as not, we must anticipate a fundamental restructuring of the Union and the recognition of a two-tier Europe.

On that basis, the chances of a final proposal being adopted in February seem to be so remote as to be at vanishing point. The media and others may wish to obsess about the details relating to in-work benefits and social housing, but these are small beer compared with the other issues.

There is, therefore, much more to this than is being admitted. As always, we are being played. And, as always, the commentariat are walking into this eyes wide shut.

We have the "leavers" squawking about Mr Cameron only asking for "trivial" changes and the delivery of a fudge, confusing fluff and substance and blasting away with their footguns. Farage is totally missing the point while the media remain obsessed with the limited issue of benefits for migrants, with not the least understanding of the bigger picture.

Crucially, none seem to have spotted that the Tusk letter is internally inconsistent. It is understandable that Tusk is making a big deal of the benefits for migrants, thus playing to the gallery, but it isn't clear why he is playing down the other issues when, potentially, they are even more problematical and he admits to them being "difficult".

Looking beyond the theatre, what he is writing doesn't fit with the facts on the ground. And if there is nothing inconsistent with our expectations that Cameron will resolve the many problems with his "British model", what does not compute is the lack of fuss being made about them.

If the Prime Minister is to turn resolving the issues into his great "victory", he and Tusk need to inject a little more drama, and much more conflict. Just a simple little victory over benefits for migrants is not going to turn the tide. My gut feeling, therefore, is that there is more of this drama yet to be rolled out. 

The December Council is obviously going to be a non-event, and everything will now be focused on the meeting in February. My best guess is that the benefits for migrants will be resolved after a highly staged denouement. But that will not be the end of it. It will only pave the way for the greater battles over "ever closer union", the eurozone and the parliamentary veto, each of which will have their place in the sun.

Thus, February will only be one small victory, with greater battles to come and more intense theatre, before we finally see the shape of the "British model" revealed to us all. We still have a long way to go before we get to the end game.

Richard North 08/12/2015 link

Strategy ten: immigration


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Of all the issues that may decide the EU referendum, immigration (or migration) may prove to be the most contentious – and dangerous. Ostensibly helpful to the cause, it also has the potential to do great damage if handled the wrong way. It is truly a two-edged sword.

As such, a strategic view must be taken. It is far too risky to leave the handling of the issue to chance. The approach must be methodical, carefully considered and gauged, at the very least, to do no harm. 

What we certainly do not want are interventions of a sort that Nigel Farage feels impelled to make, and especially not the speech he gave on Monday evening on the Paris attack and Syria. Described by his own party as "the most important intervention from a mainstream British politician on the subject of Syria and the UK's security situation", Mr Farage once again went out of his way to confuse the issues.

Complaining that the "EU's soft-touch approach of open borders and welcoming of all to our shores is now clearly imperilling the safety of our society", he went on to refer to the Common Asylum policy (as a "complete failure") and then finished up asserting that "free movement of people means free movement of guns, terrorists and jihadists".

Here, we see Farage being less than clear about whether he is talking of open internal borders (internal to the EEA and the Schengen area) or external borders. And he deliberately confuses asylum policy with free movement.

The point, of course, is that these two issues are separate. Asylum rests for its legal base on the 1951 Geneva Convention on the treatment of refugees, and the 1967 protocol, bolstered by the European Charter of Fundamental Rights – which in turn rests on the Geneva Convention. Freedom of movement, on the other hand, relies on treaty provisions and applies only to citizens of EU Member States.

Given the separate legal bases and the very significant differences in terms of practicalities, we are dealing with distinct phenomena with separate causes and, ultimately, their own separate solutions to the problems arising.

More specifically, when we dissect Mr Farage's statement in this light, we see that his claim that "free movement of people means free movement of guns, terrorists and jihadists" is manifestly untrue. This is political ambulance-chasing at its very worst.

Despite the Ukip leader's manifest inability to present these issues honestly and with any clarity, however, it is the settled position of Vote Leave Ltd that they should not intervene in this debate. Dominic Cummings takes they view that his group should stand aside and leave it to the likes of Farage and

Such a strategy is mistaken. Asylum policy has a strong international element to it – especially in the Geneva Convention. Take this and the unwillingness of the EU to deal with the root cause of the refugee crisis in Europe- a Convention which is no longer fit for purpose - and the current crisis presents us with the makings of an extremely strong case for leaving the EU.

Free of the encumbrances of the EU, Britain could resume its seat on the key international bodies and, with its new-found independence, could push for revision of the diverse international instruments which define asylum policies. With freedom to determine its own trade partners and in full charge of its aid programme, the British government could also direct policies at better managing migrant flows, easing pressure on the system.

On the issue of freedom of movement, it is likewise essential that we take an active role in what is a matter of crucial importance, which manifests itself as an inherent contradiction at the heart of the campaign.

On the one hand, we need to show voters that we can protect our participation in the Single Market after we leave the EU – in order to neutralise much of the FUD. On the other, we need to reduce immigration from EU Member States, this ostensibly requiring release from freedom of movement obligations. The problem is that we can do one or the other, but not both.

We are confronted, therefore, with a dilemma. We will have to choose between the Single Market and freedom of movement.

In Flexcit, we square the circle by adopting an interim position. This protects our Single Market participation and puts on hold changes to freedom of movement until we are able to broker a longer-term solution. But, pending that solution, we see scope for improving the management of immigration which, over the short- to medium-term, can help stem immigration flows.

This is not an optimum position, but the alternative – pulling out of the EU's freedom of movement provisions – would lose us access to the Single Market. There is no compromise on this. There are no half-measures. The European Commission has made this abundantly clear. Access to the Single Market requires adoption of the four freedoms. This is not negotiable.

In my judgement – shared with very many others – without continued access to the Single Market, we cannot win the referendum. This then leaves us with the difficult pitch that, in order to get a majority in favour of leaving, we will have to compromise. But, as I argue, a "quick and dirty" exit, accepting continued freedom of movement for a while, is better than losing the referendum for lack of compromise.

The trouble is that we can't walk away from this problem - we can't fudge it. We have to confront it, deal with it and then sell the choice to the voting public. If we try to evade it, we fall between two stools and will be unable to offer a coherent position. Our campaign will lack credibility.

But that's exactly what is happening. Vote Leave Ltd is evading the entire issue, and Farage's Ukip is pushing for the end of freedom of movement while ignoring the consequences. Instead, it is inventing fantasy scenarios that somehow magic away the ill effects.

Then there is Today, it has its press event going through recent Survation polling. An early release to the Express has 76 percent of respondents wanting to restrict entry to highly-skilled workers from other EU Member States, with an "Australian-style points system" used to manage entry.

On top of that, over half of the respondents wanted annual net migration from the rest of the EU limited to a maximum of 10,000 a year – something which, of course, is unaffected by EU membership.

Never mind the Australian system is not actually a points system. The points simply gets you onto the waiting list. In reality it is an annual quota system, which is managed by applying a series of bureaucratic hurdles. These are what regulate the numbers. Whether the British economy would benefit from such a blunt management tool is a question that is never answered.

The more substantive point, though, is whether has thought through what it is trying to achieve by highlighting this scenario. If it supports ending freedom of movement, it too must confront the consequences. The fantasy island solution is not good enough. It must have some real answers.

And there is our big issue. Large elements of the leave campaign are sharing a collective delusion that they can be all things to all people. They can't, and before very much longer they need to produce a grown-up strategy that deals with the real world.

If they are going to tell us that they can close down with freedom of movement, they must tell us how they are doing to deal with the loss of access to the Single Market, and the effect it will have on our economy. If they want to maintain market access, they are going to have to tell us how they propose to limit immigration.

If they do neither, and carry on with their dismal pretences, they will drag as all down.

Richard North 18/11/2015 link

Strategy ten: working for the other side


Yesterday, we touched very briefly on the effect of campaigning without strategic direction. In the absence of such direction, we might just as well be working for the other side, I wrote, promising to explore this further in today's post.

In keeping with the idea of maintaining a topical hook, we can explore this through the events of yesterday, when David Cameron made another speech, this one at the Royal Institute of International Affairs (Chatham House) in London, to coincide with a letter sent to the President of the European Council, Donald Tusk.

With that, however, we have had the bulk of the media rushing down the path of ignorance, boldly proclaiming that Mr Cameron had issued "demands" on EU reform. Particularly egregious examples include the Telegraph which proclaimed that David Cameron was setting out his "demands" to Europe. The Express confidently reported that the "bid to reform Britain's membership of the European Union appears to have run aground within just hours of the Prime Minister setting out his demands".

The only very slight problem with both these assertions was that Mr Cameron quite explicitly had not made any demands. His letter to Tusk stated that its purpose was "not to describe the precise means, or detailed legal proposals, for bringing the reforms we seek into effect".

That, wrote Mr Cameron, "is a matter for the negotiation, not least as there may, in each case, be different ways of achieving the same result". All he had done was to set out "the four main areas" where the United Kingdom was seeking reform. He then hoped that the letter could "provide a clear basis for reaching an agreement that would, of course, need to be legally-binding and irreversible - and where necessary have force in the Treaties".

What came out of the Chatham House speech, though, was something very much more enlightening. Very early into the address, Mr Cameron told us there were "two sorts of members of the European Union" - eurozone and non-eurozone members.

What was quite evidently a core concern, though, was a eurozone on the brink of change. This would have "profound implications for both types of members". To protect us, we need, said Mr Cameron, "a British model of membership that works for Britain and for any other non-Euro members". And just so there could be no doubt as to its importance, the Prime Minister gave us a clue: This is "a matter of cardinal importance for the United Kingdom", he said.

And there, writ large, is associate membership – rebranded to take on what may become its definitive title: the "British model".  Thus, over just a few days, from Mr Cameron's visit to Iceland, where he went out of his way to attack the "Norway Model", to Mr Osborne's speech in Berlin on safeguarding non-eurozone members, to Monday's CBI speech and then the Chatham House speech,  the pieces are falling into place.

As we see it, having established the extremes at both edges of the argument, and with George Osborne setting the scene for him, "Mr Reasonable" has created space for the centre ground and is now occupying it, with a message tuned to the "moderate middle" who will decide the outcome of the referendum. 

On this, it really doesn't matter what "leavers" think. Even less important are the views of the committed "pro-Europeans". They are not going to change their minds in the referendum. The only people who matter to David Cameron are those in that "moderate middle" - people with no strong convictions who could vote either way. 

Furthermore, we do not seem to be alone in this view. The Independent, gives us the headline, "David Cameron's strategy to keep UK in Europe is to present himself as 'the man in the middle'", positioning himself "between the fervently pro and fervently anti-EU brigades".

In campaigning terms, this gives us our marching orders. If our three-point grand strategy, set out yesterday, is anywhere near correct, then our intelligence has identified the target. Phase one of the strategy is in place. It is now urgently necessary to attack this "British model", and come up with a better – and credible – alternative. This is where the bulk of our resources should be focused.

What then of the two main leaver groups? Sadly, Vote Leave Ltd fell into the same trap as the media, treating the Prime Minister's basis for discussion as "demands". Then, failing to understand Mr Cameron's "play", they dismissed these supposed demands as "trivial".

Even when associated membership was drawn to their attention, Dominic Cummings was dismissive. It  wasn't the whole issue now, he declared. Only later, after prodding (see below), did he acknowledge that, having warned of "associate membership" (it having appeared once on the Vote Leave website), it was "hiding in plain sight in DC speech - 'a British model'". The belated admission, however, has not triggered any action.

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As for the other big group, Richard Tice of was getting himself bogged down in a pointless spat with Will Straw over trade and the EU - pushing the WTO as an exit option. His organisation, meanwhile, has completely missed the point. It has condemned Mr Cameron's actions as "meaningless gestures presented as meaningful reform".

Unable to see the links and the underlying agenda, Arron Banks has dismissed Cameron's speech as "loaded with bombastic rhetoric, underpinned by the usual Cameron pomp". This, he asserts, "will not be enough to paper over the crevices of a conspicuously unambitious reform agenda".

Banks, with his tenuous grasp of the issues, believes that, when Mr Cameron finally secures all his "reforms", the public "will be armed with the facts that no level of imaginative re-packaging will be able to compete with". He proclaims: "This is the beginning of the end".

All this actually illustrates is a complete failure of intelligence. hasn't even arrived at the starting post. On the other hand, Vote Leave Ltd, may have arrived - in that it grudgingly acknowledges the that associate membership is on the agenda. But it is not addressing this issue. Thus, with no discernible strategy, the two "noisemakers" are making every mistake in the book.

What these two groups are doing, therefore, is soaking up resources that could be better employed on fighting the real battle. And, with their totally inadequate intelligence gathering and analytical capabilities, they are failing to inform the media, leaving them to spread disinformation and ignorance.

As for Farage, we struggle to find anything from him worth recording. He is reported here, dismissing Mr Cameron proposals as lacking any targets for substantial renegotiation of membership. Farage also complains that Mr Cameron has tried "to portray a new 'third way' relationship with Brussels that is simply not on offer". Like, he has a way to go before he gets near the starting post.

Yet, the tiny Bruges Group has been able to put the story together - and with only a fraction of the resource available to the other groups. But the noise level is so high that it will get relatively little media coverage. Before this referendum, the Group was a media favourite. Now its voice is drowned by the "noisemakers".

Like it or not, "leave" groups are in competition for media attention, for funds and much else. Inadequate groups do not work in isolation. When they fail to perform, they detract from the campaign as a whole. Effectively, they are to this referendum what bed blockers are to the NHS. They can be a more potent drag on our capabilities than the pro-EU campaign. And in that sense, they are not on our side at all. 

Nevertheless, they are a factor on the ground, and have to be worked into any strategy. How we deal with them is something I will look at shortly.

Richard North 11/11/2015 link

EU Referendum: ten days of strategy


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If had listened to The Boiling Frog when he warned about the lack of wisdom in using Guy Fawkes night as a jokey backdrop to suggesting we blow up the Berlaymont, it might have avoided this adverse headline in the Mail.

An individual can get away with remarks about blowing things up but, in the cut and thrust of a vicious campaign, the same response from an organisation holding lead designation could elicit a damaging reaction. To that effect, a campaigning group needs to be very careful what it says, so TBF was warning Banks of what he might expect.

Yet, no sooner had that been done then the website was back in trouble with an ill-judged intervention on Remembrance Sunday. Never mind the fact that the dead of two world wars is used as the primary justification for European political integration – succinctly noted by Pete. Once again this was a misstep by, another to be remarked upon by TBF.

What was might also note of the Twitter account is that it is so devoid of content that the administrators are reduced to tweeting material from Ruth Lea – member of the advisory board for Business for Britain – a competitor for lead designation status. Also tweeted was the storm in a thimble over the CBI, one set up by the "odious" Cummings – another initiative by the competition.

It cannot say very much for an organisation which has ambitions to get lead designation from the Electoral Commission, that it has to filch stuff from its competitor. But when a campaign almost completely lacks strategy, this is what tends to happen.

Nevertheless, that lack is unsurprising: founder, Arron Banks, gives no indication of even understanding what the term means. And, for want of a strategy, on 18 November - with the aid of his US guru Gery Gunster - he is to unveil the results of a massive opinion poll on the referendum, commissioned at great expense by

As one might expect, respondents have been asked, inter alia, to identify issues most likely to influence their vote, and it comes as no surprise to find that immigration tops the list. But the fact that the survey is telling us something we already knew is not the only reason it is an exercise in applied futility.

The main reason why Mr Banks is wasting his money and our time is because of that well known dynamic in referendums, where the electorate does not necessarily answer the question on the ballot paper. With most likely two years to go, it would be a brave man who can predict what question the electorate will actually be asking. But more to the point, even if we knew (and we can guess), voters have yet to engage: they can't at this moment offer reliable (or any) indications as to how they will vote.

Looking back at the 1975 referendum, we know that in August of the year before, 50 percent expressed a preference for leaving the EEC, against 32 percent who would vote to stay in, a "huge" lead of 18 points. At around the same time, Gallup confirmed these proportions, with a poll coming out at 47-30 percent in favour of leaving, giving a lead of 17 percent.

As we well know, nearly a year later, 67.2 percent voted to stay in, while those voting to leave had fallen to 32.8 percent – a lead of over 34 percent in favour of staying in, representing a swing of over fifty percent.

What made the difference was that, by then, prime minister Harold Wilson had delivered the results of his "renegotiations". And although it is well known that these were a fudge, they were sufficient to carry the day. Now history is about to repeat itself, with Mr Cameron preparing his own personal fudge, probably in the form of an associate membership, or "two-speed Europe ", as Guy Verhofstadt would have it (screen grab pictured).

Most likely, it is how this is presented, its timing, how it is perceived, and how the "leave" campaign responds – and their success in communicating their views – that will determine the outcome of the referendum. Nothing of that, at this stage, is amenable to opinion polling, except in the most general of terms.

But, if Arron Banks is leading a train-wreck campaign, the "competition" – Vote Leave Ltd – is performing little better. Running the campaigning end of that business enterprise is Dominic Cummings – a man who has been out of the picture for over ten years and whose grasp of matters EU was never more than slender.

Currently, he is attempting to revisit past glories when, in 1999, Business for Sterling had a hand in persuading the CBI to drop the euro campaign. But although, this was as much to do with the efforts of Brigadier Anthony Cowgill (see page 40), Cummings claims the sole credit.

While attempting to re-fight old battles keeps Cummings in his comfort zone, it is of little relevance to the current debate. The CBI may have been a major player in the euro campaign, but it has much less impact now. It will probably not feature at all in the final stages of the campaign.

For the rest, what passes for Cummings's general strategy seems to be based on his findings from focus groups conducted in 2014, which I reported on at the time. Some of my observations on the comment thread seem remarkably prescient.

Crucially, of Cummings's so-called strategy, it is quite obviously drafted without reference to the capabilities and intentions of the enemy. In fact, so slender is his grasp of David Cameron's intentions that he clearly does not understand the play. As a result, he is seriously under-estimating the prime minister's strategy, and failing to appreciate the danger it represents.

Never more, however, has the game been clearer, bolstered by Philip Hammond on Sunday's Marr show, when it became evident that he understood that the British public could not be "fobbed off with a set of cosmetic alterations to the way the EU works".

Said Hammond, there would have to be "substantive legally-binding change" if the British public were to vote for it in the referendum, adding: "This is about fundamental change in the direction of travel of the European Union".

From this it is evident that the slender lists being listed in many newspapers – and assumed to be the substance of the UK government's demands, are going to be totality of what Cameron expects from the EU. There must be something more if Mr Cameron is to convince the public that there has been a serious renegotiation and a meaningful outcome.

As to what this will be, if we didn't already have a good idea, another clue came in Merkel's speech last week at the same event at which Osborne spoke. 

Acknowledged as giving her backing to some British demands, Merkel declared that: "The Europe of today is no longer a one-speed Europe". This is a major concession, representing a public admission that the EU must abandon its pretence that it is a single, homogeneous entity. It paves the way for associate membership, and the makings of Mr Cameron's "victory", especially if it is presented as his idea. 

If and Vote Leave Ltd were on the ball, they would be devoting all their energies to undermining Mr Cameron's "play" - and so unattractive is associate membership that, with the combined effort, it would be relatively easy to beat. But with the "noisemakers" out of the picture, we are going to be hard put to beat this play.

However, that does not mean we can't win. We most certainly can. Simply, in the absence of any support, we are going to have to fight that bit harder. And, difficult though this will be, it is not impossible. We do not need formal groups in order to fight, and if we fight effectively, we can win.

Thus, for the next ten days, in conjunction with Leave HQ, we are going to dedicate this blog to a series of linked posts, bringing together all our thinking on the strategy, to help focus efforts on the real fight. We will also offer some campaigning advice. The first post will be tomorrow, when we will revisit the nature of strategy, and why it is so important.

Richard North 09/11/2015 link

EU Referendum: a paucity of power


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One extraordinary thing about the current debate on the EU referendum is not so much its extent as its limited scope: the same issues, the same FUD and the same fog of ignorance.

It is that, probably more than anything, seems to be running out of steam, as the parties avoid the core issues. The remainers avoid telling us what continued EU membership looks like, while the "high-noise" leavers are unable to describe a post-exit Britain.

But nothing adds more to the air of unreality than the pretence by ministers that they are seeking real objectives, when they are chasing shadows – ideas with no substance at all.

Into this comes the quest by the Prime Minister and Chancellor for an "emergency brake", supposedly to safeguard the economic interests of non-euro countries, something to which George Osborne referrred in his Berlin speech.

But even the Financial Times seems to be having trouble with the terminology, which makes this quest even less substantial. Says this newspaper, David Cameron and George Osborne want a "protocol" that enables the EU single market to coexist more easily with an integrated eurozone.

The point about a "protocol", however, is that this is a formal addendum to a treaty, and thus has the same status, requiring the same procedures to bring it into being – unanimous agreement by all 28 Member States and then ratification.

As such, there is not the slightest hope in the known universe of getting such an agreement through the system, which means that the whole idea is a complete non-starter.

Recognising the futility of this quest, we now see a different option being touted, which goes by the name of the Ioannina mechanism, which has been used to delay a decision if a country feels that its vital interests are threatened but cannot muster a blocking minority under qualified majority voting.

It was first proposed at a Council meeting in Ioannina, a Greek city north of Athens, in 1994, when foreign ministers from the then 15-member union were called to discuss how voting rules should change if Norway joined the EU.

At the meeting, ministers agreed that if EU members wished to oppose a measure but could not muster enough support to block it, they could ask the bloc's council of member states to do "all within its power, within a reasonable space of time, to reach a satisfactory solution" that would be acceptable to a qualified majority.

This "mechanism", though, has the status only of a political declaration which, as the UN points out is not legally binding. This is so far from the idea of Mr Cameron's full-on treaty change that it is a travesty.

All of this makes the posturing of Messrs Cameron and Osborne totally valueless. Nothing therefore better demonstrates the paucity of power in this land. Our ministers are not in control – all that is left is pretence.

Richard North 05/11/2015 link

EU Referendum: when "no" means "yes"


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Daniel Hannan is the "brilliant" analyst who was convinced, not so long ago, that Greece would drop out of the euro. This man was also quite happy to run with the idea of an early referendum and, in May 2015 was welcoming the idea of "associate membership". His complaint was that Mr Cameron wasn't asking for it.

Now, he joins the ranks of other geniuses like Tim Montgomerie in being convinced that "no serious analyst" thinks Mr Cameron's recent list of negotiation demands "amount to anything".

Hannan believes that David Cameron is deliberately lowering expectations "so that even the paltriest change can be sold as an unexpected triumph". For this, he relies on the "unintentional leak" from Andrew Lansley, who predicted "a bogus row with France after the February summit".

It remains to be seen, says Hannan, whether there will be a sham fight, but this "ludicrous downplaying of expectations" is already taking place. He then guesses that the "meagre expectations" will be exceeded by going ahead with fiscal and political integration, with non-participating countries afforded a different status which "they might even try to get away with calling it associate membership".

What the "brilliant" Hannan doesn't seem to have realised, however, is that Cameron's "four key demands" fit neatly with the building of a launch platform which will take us towards this "associate membership". In that context, far from failing to "amount to anything", they are a vital piece of evidence in establishing a direction of travel.

Thus, Hannan ends up making the mistake of thinking that associate membership is not on the table. However, if it was, he suggests that "most Eurosceptics would settle for such an option". This would amount to "a broad European market, covering EFTA states and Turkey as well as EU members, within which the Eurozone countries could establish a political as well as a monetary union".

But then, tucked into this cosy little script is the "money quote". Given that Hannan's idea of "associate membership" becomes available (or some unspecified variation of it), he then argues, "Brexit will become unnecessary". Hence, one assumes that if Mr Cameron does offer it at the eleventh hour, Hannan and the rest of the soft Tory "eurosceptics" (including the "Vote Elliott£ group) will support the "remain" option.

It seems hardly a coincidence, therefore, that James Kirkup should be writing in similar terms. He thinks Mr Cameron may be voting to end "Britain's 'current' EU membership". When a majority of voters agrees with him, "he will start negotiations not on exit but on a 'new' membership deal, which would be put to the people, eventually".

That new deal might look quite familiar, writes Kirkup. It will be "free trade in exchange for free movement of EU nationals, access to EU capital markets in exchange for EU financial regulation, and permanent exclusion from ever-closer union and the euro".

This is effectively the substance of Mr Cameron's "four demands". In Kirkup's scenario, though, we'd cease to be a "member" of the EU and become a "partner" or some such. Tellingly, he doesn't use the words "associate membership", but that's what he means.

On that basis, Kirkup sees the coming referendum as a choice not between in and out, but as between "in" and "half-in". We see this as the makings of a fudge that will blur the battle lines and confuse the voters, matching Hannan's equivocation.

Adding further to this confusion is Simon Jenkins writing in the Guardian. He decides that, when seen from Britain, "the EU has become a sham" (illustrated top). Thus, he declares, "Some version of a new single market must be found", adding that no such search will even begin if Britain votes to stay in the EU. "Only a vote to leave offers negotiators the leverage they now so clearly lack".

Nevertheless, anyone who thinks Jenkins has become a leaver should think again. The man would not have us leaving absolutely. Rather, he wants a "new relationship between the nations of Europe and their supranational governors".

What then Jenkins would have the government do is go to Brussels and then negotiate a new treaty "that meets, to some degree, Cameron's original negotiating demands". There then comes another referendum – to agree this new treaty. And by this means, a British vote to leave become "the precondition for a new Europe" - or which we are part.

If we now gather together these disparate threads, it is not clarity that emerges, but glorious obscurity. The water is being muddied. What was once a simple matter of "in" or "out", "remain" or "leave" now becomes a turgid mess of options.

The scene is being set for the "white knight" to emerge. Mr Cameron can leap into the breach and offer clarity, in the form of his version of associate membership. This he will promise in the forthcoming treaty process – after which we get our second referendum on the new treaty.

The confusion, meanwhile, is deliberate. As long as there is no clarity, there will be no clear choice for the voters and the siren voices of the status quo will reassert themselves. Cameron comes shining through the mist, a beacon of light and sanity, in a dark and turbulent world. Mixing metaphors outrageously, he attracts swing voters like moths to a flame and wins the game. 

That is how this dirty battle is being fought, and this is how we could end up losing – not in straight fight but out-thought, out-manoeuvred and betrayed.

Richard North 16/10/2015 link

EU Referendum: agreement on a plan


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The extraordinarily simplistic article in the Independent on Sunday on leaving the EU doesn't really matter. It's in a newspaper that's dying on its feet, has very little credibility and speaks mainly to its own kind – fanatical Europhiles wedded to the cause.

In typical style of its kind of propaganda, it raises the FUD – telling us that "Fears grow that European Union will impose tough conditions on UK after 'Brexit'" – total hyperbole, then adding the formulaic and completely unsubstantiated assertion that: "The threat will fuel further tensions within the Conservative Party, which is divided on the EU".

This is such empty invention that it scarce deserves a reply, but it is interesting to observe the techniques used. Having raised the scare, the paper then brings on the straw men in legions, claiming:
Eurosceptics have argued that the UK would still enjoy favourable trading terms with the EU even if it left, often citing Norway, which is not a member but is still the fifth biggest exporter to the bloc. Lord Lawson, the new head of a Conservative Brexit campaign, said last week Britain could "negotiate a free trade deal with the rest of Europe", entailing "a more amicable and realistic relationship".
But this is more than just straw men – it is bias by omission. With just short of 30,000 downloads behind it and a short version in preparation, Flexcit is by any measure a significant contributor to the debate, offering a structured and complete demolition to the Independent fluff.

Not least, Flexcit sets out a six-stage exit plan, with multiple fall-back positions, sufficient to protect UK interests against any known contingency. It easily answers the "fears" that the likes of the Independent raise.

But the paper ignores Flexcit, as do most Europhile organs, inventing any number of excuses for doing so, when challenged. But they all amount to the same thing. They dare not acknowledge it because it so comprehensively demolishes their superficial and facile arguments.

But they are considerably assisted in their task by being able to rely on the indifference of a diminishing tranche the eurosceptic community, who either have their own axes to grind, or labour under the mistaken impression that an exit plan isn't necessary. Some even argue that any single plan is so divisive that we must do without one.

On the other hand, it was the brilliant Second Cummings who argued (behind the scenes) that that Flexcit, with its six-stage structure, was too complex for the tender flowers of Westminster, prompting this response and the observation that:
If you want to qualify to the highest level in music, through the examination board of the Royal Schools of Music, there are EIGHT stages. Yet, to undo 40 years of economic and political integration, some people think SIX stages are excessive.
Amusingly, I noted on my Twitter feed today the post illustrated below, promoting the "14 easy steps" needed to become a runner. And there I thought it was about putting one foot in front of another, quicker than normal. 

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But as long as the eurosceptic aristocracy are determined to ignore Flexcit, that gives the europhiles a free pass to do the same thing. In this case, the IoS relies on the fatuous Lawson – who really should know better having stitched up the IEA Brexit competition – who is bleating that Britain could "negotiate a free trade deal with the rest of Europe".

If this doddering fool stopped to think for one moment, he would know that it could take years to come to an agreement – far more time than is politically acceptable – opening the way for the Independent in a separate piece to claim that this would be "a long and tortuous process that would take many years and create long-term uncertainty".

When, years down the line, we still have spokesman for the "leave" campaign being caught out on the basics, it is time for all of us to ask whether we can afford to have these people representing us, or whether they should be put out to grass. Clearly, Lawson has learned nothing at all from judging the IEA competition.

However, while we can afford to ignore the Independent - for the time being – its input gives us an inkling of how the Europhiles are going to play it. Picking on the lack of an agreed exit plan is easy meat for them, and they will continue to exploit this lack of agreement for as long as it gives results.

For over ten years, I and others have been arguing that the anti-EU movement must get behind an exit plan and, after all these years, we are not much further forward in gaining broad-spectrum agreement.

Flexcit, of course, remains on the table, as does the offer of looking at any amendments that might be submitted – the work already having accommodated the thinking and arguments of many readers (with a corrected and improves version out shortly).

Most of the detractors, however, far from seeking to make the work better, seem not even to have read it, while the Elliott faction went into competition, with an error-strewn, incoherent door stopper that has all but disappeared with trace, unread even by the friends of Elliott.

The only thing different between now and ten years ago is that we currently have a plan in place. But until enough people put their weight behind it, and force its adoption, the way will be open for the likes of the Independent to pretend we are without one, and make mischief for us.

There is no use waiting for the great and the good to get off their pedestals on this. We the people have to take our own decisions and make the running – unless, of course, you are content to have the mighty Lawson blather on your behalf.

Richard North 04/10/2015 link

EU Referendum: sleepwalking to Brexit


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One has to permit a wry smile at the sight of the Times editorial, which tells us that the "robust renegotiation of Britain's relationship with Europe" that David Cameron promised "has gone quiet". Says the newspaper, in response to this: "Confidence that it will ever happen is fading fast".

The temptation to yelp, "No sh*t Sherlock" is almost overpowering, as the paper is telling us something we have been reporting for many months. But all the august Thunderer can manage is the view that Britain's efforts to renegotiate its relationship with the EU "are beginning to look increasingly feeble".

As anticipated, the renegotiation is regarded as important but secondary to the refugee crisis and the continuing saga of Greece and the euro. Whenever Britain's renegotiation appears on the agenda of a Council meeting, the story is the same. "The British do not seem to know what they want, or if they do they are not saying". His counterparts in every member state are expecting detailed wish-lists, but there is no sign of them.

With that much lodged, however, the paper doesn't seem to have much idea of what is going on.

By coincidence, yesterday I was looking at one of the earlier articles featuring Nigel Lawson, this one in the Guardian, in September 2011.This referred to the possibility of a new treaty, an event which, said the paper, "would present a golden opportunity for Britain".

The necessary treaty changes would have to be approved by all (then) 27 members of the EU. The prime minister had told the Tory 1922 committee before the summer recess that he would use the treaty negotiations to repatriate powers in three key areas – legal rights, criminal justice and social and employment legislation.

That was the original plan but, as we know, Merkel blocked the negotiations, leaving Mr Cameron to consider using the "simplified procedure" provisions of Article 48. But, without this ploy ever having been acknowledged, it was abandoned, leaving the Prime Minister with nowhere to go.

This left only one option, the possibility of the delayed treaty being reactivated, and the idea of "associate membership" being adopted as Mr Cameron's "big idea". Multiple signs now point to this becoming a reality.

But this is something that the Times has not picked up. It seems to have no real idea of what is going on. It does admit, however, that the renegotiation team at No 10 "has floated the idea of deferred EU treaty changes to be presented to voters as IOUs".

And although there is every indication that this idea will fly, the paper thinks it has "gained little traction in Brussels", where negotiators are said to have been told "the only concessions that could be post-dated in this way would be opt-outs rather than full treaty changes".

That leaves the paper with little understanding of the way things are developing, ending up with the peroration that "Britain needs a real renegotiation based on a coherent vision of what the country needs, not what Europe is willing to grant".

This is such total wishful thinking that it betrays a complete departure from reality for the editorial writer, who then concludes that, "If Mr Cameron is not ready to present one next week at his party conference, there can be little confidence that it exists".

But, of course, it doesn't exist – it can't exist, and there will be nothing specific that Mr Cameron can offer at the conference, where there is no mention of the EU on the official agenda.

It is only recently though that the Sunday Telegraph was confidently predicting that the Prime Minister would come under immense pressure from backbenchers "to show a more ambitious menu of proposed reforms than has so far been disclosed", preparatory to an early referendum.

The only point of interest, though, will be the precise nature of the "fudge" that Mr Cameron will have to perpetrate, whence we will see the meeting of the European Council on 15 October, for the next non-event on the path to associate membership.

Ironically, the Times talks of a well-organised "out" campaign masterminded by Dominic Cummings, but the only thing that seems to be organised is the rush to fritter away resources in anticipation of an early referendum that simply isn't going to happen.

Nevertheless, the Times collecting together the strands of its profound ignorance, believes we are "sleepwalking to Brexit". An equally (if not more tenable) scenario, though., is that Mr Cameron is letting the "leave" campaigners wear themselves out, preparatory to making his move in late 2017.

This timescale is beyond the capability of any British national newspaper to comprehend, so all we're going to see is the parade of the ignorati, as they struggle (and fail) to understand what is going on.

Meanwhile, in response to the well-organised "out" campaign masterminded by Dominic Cummings, and its coup in appointing Lord Lawson as Conservatives for Britain president, Arron Banks dismissed the group as "run by the Westminster bubble". "It would be better", he said, "if the Eurosceptic Tories just 'shut-up' as they are going to alienate the vast majority of people who will look at this campaign as a Tory stitch-up".

Sticking in the knife, he then added: "If the Tories keep using has-beens like Lord Lawson and the other Eurosceptic rabble then that will turn off supporters". For Mr Cameron, things seem to be going swimmingly.

Richard North 02/10/2015 link

EU Referendum: conceding the ground


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Conservatives for Britain
now has as its president Lord Lawson - he of IEA Brexit competition fame - which, he tells us, "is helping to establish a professional campaign to leave the EU". "We will", he says, "be working with business leaders, academics and all political parties to call for the UK to leave unless there is real reform" (see above - click to enlarge).

As to the nature of the "reform" he would accept, his priorities would be fourfold: the end of the automatic supremacy of EU law over UK law; the ability for the UK to negotiate its own free trade deals with fast-growing countries such as India and China; the ability to control immigration from other EU countries to the UK; and the explicit renunciation by the EU of its absolute commitment to "ever-closer union".

These, of course, are issues which are fundamental to the European Union, and there is not the slightest chance that the "colleagues" would even sit down at a table to discuss them. This would not be reform, but annihilation: an EU that accepted these "reforms" would no longer be the European Union as we know it. This is "barking cat" territory.

With that, one has to ask what the point is of demanding something which is unachievable, and then calling to leave because your wishes are not granted? Although the analogy is not perfect, this is like joining a tennis club and demanding that it digs up its courts and turns them over to rugby pitches.

Logically, the only tenable stance is to walk away from the idea of reform altogether. This is not going to happen – not on the terms stated. Thus, the way is open for a purity of line. We leave because the structure and objectives of the EU are incompatible with our own requirements, and cannot be reconciled.

Instead, though, we are left with this ghastly Tory fudge, where we are stuck in the same old groove, presenting "reform" as the default option and the prospect of leaving as second-best, entered into reluctantly because Mr Cameron has failed in his negotiations.

This is an intellectually untenable position, and no basis on which to found a campaign. Furthermore, it leaves it open the option of an eleventh-hour resolution, whence Mr Cameron comes hot-foot back from Brussels with a new deal, which the likes of Lord Lawson grudgingly accept. Anything will be better than the prospect of an "accidental Brexit".

Therefore, we have at the head of that group a man who is not committed, as a matter of principle, to leaving the EU. Leaving, to him, is an option and he is open to persuasion on staying in, given the right terms.

His concern is that "we stay in an unreformed EU", thence "handing over ever more control of our economy and our borders to political bureaucrats whom we cannot vote out and who have made clear that they do not care what we think".

Therefore, if you are concerned about the prospect of staying in an "unreformed EU", Lord Lawson wants us to join with him helping to build the campaign to leave.

But how can one work with a man (or an organisation) which thus concedes the core point (on the unacceptability of the EU) before the battle even starts? Clearly, there is no room for anyone who considers that we should leave on a matter of principle.

Richard North 01/10/2015 link

EU Referendum: a question of questions


Say the words of the song: "Should I stay or should I go? … If I go, there will be trouble; And if I stay it will be double; So come on and let me know".

And now the answer, according to the Electoral Commission should not be "yes" or "no". Instead, on the basis of research conducted for it, the Commission has decided that the answer should be "remain" or "leave".

In the view of the Commission, the government's current proposal: "Should the United Kingdom remain a member of the European Union?", gives the "perception of bias" and is "not balanced".

As an alternative, it is recommended that voters should be asked whether they wish to "remain a member of the European Union" or "leave the European Union", with the ballot paper to look something like the specimen below. 

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This was flagged up some time ago by The Boiling Frog, with the Electoral Commission having already expressed its reservations about a straight "yes-no" response.

In theory, the difference with worth eight or nine points to us "leavers", for which there is much rejoicing, even if Mr Cameron was suspiciously quick to agree to the change. But not all is necessarily what it seems.

There is quite obviously a difference between perceptions expressed to polling companies before the campaign gets underway, and responses after a period of intensive campaigning. After all, the whole purpose of a campaign is to promote the "brand" and imbue it with positive associations.

Arguably, an effective campaign would narrow the "yes" advantage, making the new options less attractive, especially as neither lend themselves to punchy slogans. The "leave" campaign will never convey as much force as the simple "no" proposition.

Interestingly, Coventry University's Matt Qvortrup tells the Guardian he welcomes the change – but only because it avoids a protracted debate over the question.

He believes it actually doesn't make a difference. "If you try to use leading language in a referendum question, you are actually far more likely to get a no vote, because the public is immediately suspicious", he says – citing Charles de Gaulle's constitutional referendum in 1969, as well as in Quebec in 1980 when the question was also massaged.

The most crucial decider, Qvortrup thinks, is a unified campaign. "People respond to that, campaigns where one side is not working together do not succeed, when there is a camp within a camp".

And that, with the launch of Farage's personalised campaign, seems as far away as ever. The Ukip leader is determined to position immigration as the lead issue, wholly attributable to the EU, displaying his usual inability to master detail and ignoring the refugee convention dimension.

He dismisses campaigning on an "intellectual battle" over who governs Britain, insists that immigration is "utterly central" to British voters' concerns about the EU.

However, the lack of unity and Farage's approximation of a loose cannon, is almost certainly less of a problem than the failure to develop a coherent strategy amongst the "leavers".

The crucial point here that the initiative in this campaign remains with Mr Cameron, who has yet to reveal his hand. He seems remarkably relaxed about backing off from key commitments, apparently scrapping demands for full British exclusion from EU employment laws, and he also reported as willing to make concessions on purdah and even rules on referendum spending.

This suggests a man that has abandoned his original "renegotiations" strategies and is relying on something entirely different. We are increasingly taking the view that Cameron is preparing to gamble all on "rebranding" the UK relationship with the EU, along the lines of the expected associate membership.

We are convinced that the stage-managing of this ploy, at a late stage in the campaign, will drive the government's strategy, making an apparently powerful case for continued membership of the EU.

In detail, though, this will be very weak, but it will need a spirited and well-prepared counter-attack to negate the apparent advantage. That should be dominating our strategic thinking for, unless we can neutralise Mr Cameron's "play", we will not get the opportunity to roll out our own strategy.

Against this, the precise nature of the question is small beer. In strategic terms, this fight is winnable if we come well-prepared. 

Richard North 02/09/2015 link

EU Referendum: "yes" confidence "dangerously misplaced"


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James Morris in the Times thinks the confidence of the "in" side is "dangerously misplaced". This is a man who, it appears, hasn't realised that the EU referendum is a "yes-no" contest, and he wants us to take him seriously?

But James Morris is a partner for Greenberg Quinlan Rosner Research and worked for Labour before the election, so he evidently has prestige – and thus can write knowingly in the legacy media for us to genuflect and imbibe his greater wisdom.

His case is that the key swing vote is disproportionately female and it is going to be particularly hard for either side to reach this group as they are less likely than men to care one way or another. While one in five men says Europe is one of their top priority issues for government, among women the number is less than one in ten.

The big deal, though, is that the "yes" side doesn't have a slam-dunk winning argument for being in the EU. The idea that working with other countries strengthens Britain's hand in the world is a winner for the middle class and the young, but older voters and working-class voters tend to think that the country would do better if it was less engaged with the world.

Immigration regularly polls as the top issue facing the country and, says Morris, voters know that the only way to regain direct control of the flow is to withdraw from the EU. The argument that immigration benefits the economy is simply not believed - in a poll Morris's company conducted last year, cutting immigration ranked as the best way to boost the economy, ahead of cutting taxes, investing in infrastructure or improving education.

At the heart of the problem, we are told, is the immense distance between the EU and the electorate. To that effect, the prestigious James Tilley of the prestigious Jesus College, Oxford is called in aid.

This prestigious man argues that, when a European country gets frustrated with its "rulers" (we have rulers?) it can kick them out at election time; but when they become frustrated with Europe there is no one to kick but the institution itself. For countries that benefit from EU funds, there are tangible reasons to be forgiving; but for countries such as Britain that see Brussels as a cost, that psychological buffer is not there.

So, Morris concludes, we are left with a referendum where the "no" campaign has a strong populist card to play; while the "yes" side has a highly contingent argument to make about the economy.

The man's worry is that, if Greece settles down, the eurozone returns to solid growth and the trade benefits become obvious, they stand in good stead. But if the EU becomes a byword for economic chaos, patronising élites and unfettered immigration, then whatever renegotiation Mr Cameron manages to deliver in Brussels is unlikely to be enough.

And that is the sort of analysis you get if you go for "prestige" rather than intelligence. But what Morris doesn't compute is that, by the time the genocidal mouth-breathers in Ukip have finished toxifying immigration, no sane person will want to go near the "no" side. 

Concern over immigration there may be, but the situation is far more nuanced than is indicated by simple polls. Those who feel uneasy about the government incompetence (and worse) do not necessarily share the Ukip view of the action needed. Unless the "no" campaign can recover the ground and rehabilitate the issue, immigration could prove to be a millstone round its neck.

On the other hand, there is a good chance that the EU will keep the lid on Greece long enough to fudge the economic statistics for the referendum (nothing new there), so the "Greek card" is more likely to work in favour of the "yes" campaign.

However, if the "no" campaign can invert the status quo and show that staying in the EU through to another treaty is likely to increase tensions between the UK and the EU, and show that leaving the EU is the best way to work with other countries - globally as well as at a European level - then we could be in with a chance.

Strangely, therefore, while the pundits are trying to define the battlefield, the crucial issues are not those which feature highly in their rankings. But what is encompassed by our membership of the EU is the historical mistake made by prime ministers in the '60s and '70s in electing for to join a supranational treaty organisation instead of opting for intergovernmental cooperation.

That issue is as alive and relevant today as it was fifty years ago, making this referendum an opportunity to correct that historic mistake - one which transcends what may well be transient issues. Thus, as we saw yesterday, we need to be asking the right questions and listening the answers. 

Failing that, you can work for Greenberg Quinlan Rosner Research and hide behind the Times paywall, offering one-dimensional analyses.

Richard North 10/08/2015 link

EU Referendum: Germans speak with forked tongues


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The Independent has been telling us that chief executives of Germany’s major companies operating in the United Kingdom have issued a "please stay" appeal on the EU.

Around 2,500 German companies, mainly working in industries such as energy, manufacturing, transport and finance, employ 500,000 people in the UK. They include leading businesses in their fields with global brands such as Basf, BMW, BOC, DHL, Npower, ThyssenKrupp and VW.

And now the organisation representing German industry in Britain, German Industry UK (GIUK) has asked its leading members how they viewed the outcome of the referendum, permitting Dr Bernd Atenstaedt, Chairman and CEO of GIUK, to say: "we ... believe it is in the UK's best interest to stay in the EU for the benefit of our employees and ultimately, the general public".

Crucially, though, if Britain left the EU, these "leading international companies" believe "a new set of bilateral trade agreements would need to be negotiated". They then say that "the added cost of this legally expensive and time-consuming process, would affect both the number of multi-national companies currently operating the UK and those with plans to move to Britain".

This, for many of us, is typical of the flow of FUD from organisations which either do not know – or wilfully disregard – the difference between membership of the EU and participation in the Single Market.

But what is especially interesting in this particular article is the reference to the "legally expensive and time-consuming" negotiations for a "new set of bilateral trade agreements".

Specifically, this is the second time we have seen references to the time taken to negotiate the UK exit, the first being in late June when the Financial Times had the consultancy Global Counsel tell us that it could take ten years to leave the EU.

Certainly, the time taken to secure trade agreements is a problem, and we could be seeing a new attack line in the making. Sooner of later, one might expect the Europhiles to notice that it can take ten or more years to negotiate a trade deal with the EU, while the initial time allowed under Article 50 is two years.

To square this circle, we are going to have to be pretty creative but, since we managed to conclude our final entry negotiations in less than two years, the strategy adopted then might offer us a few lessons on how to break from the EU.

However, in complaining about the need to negotiate a new set of bilateral trade agreements, these businesses who boast "global brands" are being more than a little disingenuous, if not outright dishonest.

The point to make, of course, is that global brands need global markets. To thrive, they would rather replace the network of restrictive and incomplete bilateral deals with sector-specific global deals negotiated on a multilateral basis, giving them access to the global supply network.

Thus, while Volkswagen and BMW (two of the GIUK members) might be keen on the EU having a trade deal with UK, you might expect them to be even keener on there being wider international deals, in which we can all participate. They are, after all, global companies operating at a global level.

And here there are interesting developments that cut across the narrow rhetoric of this German organisation, looking to organisation at a truly global level.

Almost entirely unreported, and then only in obscure technical journals, we get glimpses of from the EU's own CARS21 report which, together with Commission documents tell us of progress towards making UNECE WP.29 standards truly global.

The most effective instrument for international regulatory harmonisation, we are told is the UNECE 1958 Agreement, "provided it is modernised to accommodate the needs of emerging economies and to the extent that it enables the mutual recognition of international whole vehicle type approvals (IWVTA) starting with the category of passenger cars".

But what is fascinating is the way these global agreements are being used to anchor regional free trade agreements or Economic Partnership Agreements (EPAs) as they are being called, when they are dealing with so-called "new issues" such as regulatory cooperation that go beyond the WTO and are defined as "WTO-plus" issues.

Thus we see embedded in the Japan-EU agreement currently being negotiated, the adoption of WP.29 UNECE Regulations. And through this, we are seeing an entirely new structure to trade agreements. We are seeing global sectoral agreements stitched together to form a "bundle", with local variations to suit the specific needs of the parties.

It is highly significant that one of the parties in this case is the EU. We have the old-style customs union, which has never been replicated, seeking new-style agreements with Asian economies which are not disposed to relying on traditional formats.

These complex, hybrid arrangements seem to be the future, not least because they embody the flexibility which enables individual nation states to customise their agreements yet conclude negotiations relatively quickly. In this case, negotiations were launched on 25 March 2013 and are expected to conclude in 2015.

If the Germans (or indeed the EU in general) want trade relations with the UK, therefore, they might be better looking to these hybrids. They are able to build on the work of global bodies, yielding productive and flexible agreements. Yet they are also amenable to constant upgrading and amendments, without great dramas.

So different are these arrangements, though, that they remain almost totally under the radar of the legacy media, unreported and generally ignored. Yet, in them lie the germs of a new relationship between the UK and the EU. Instead of chasing after traditional deals, we need to take advantage of new structures and new ideas, adapting them to the needs of modern commerce, freed from the drag of a post-Versailles Europe.

We have opportunities here that are as yet unrealised, but which could revolutionise the EU debate, and break us out of the dreary, FUD-laden rhetoric. There are different ways of approaching problems that have never really been satisfactorily solved, and they are there to use.

Richard North 10/07/2015 link

EU Referendum: widening the research base


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I've been doing a bit of thinking. Instead of always reacting to the Europhile arguments, we should be taking the initiative and breaking open their claims with some in-depth studies of our own. But we can only do this is we can get past the basics and start focusing on these instead of rehearsing ancient arguments.

With some powerful minds in play - and with Owen Paterson beginning take control of the agenda - I am at last a little hopeful that we can see an end to some of the internal squabbling, and the next few weeks could be pivotal. If some semblance of unity is possible, it will be these people, with the ExCom (as we much now call it), who will make it possible.

But our own group, the Referendum Planning Group (RPG) will also have had an important part to play. Niall Warry, of The Harrogate Agenda, Edward Spalton of the CIB, Robert Oulds of the Bruges Group, and Anthony Scholefield, with his Futurus think tank, have all been putting in a massive amount of unpaid work, all directed at making an effective campaign happen.

That said, we will continue to see creative tensions, and it is the constant flow and exchange of ideas on this blog which gives me so much encouragement and inspiration. That's even (or especially) when I'm dealing with my own "black dog", or in throat-ripping mode with the sheer frustration of trying to overcome the obstacles and push the agenda forward.

But what brings all this to a head is a piece in yesterday's Financial Times, one picked over on twitter, as it is another of those FUD pieces on the car industry, this one headed: "German carmakers raise fears over Brexit".

The article itself has carmakers worried about disruption of supply chains, and then lets Matthias Wissmann, president of the VDA, the German carmakers' association, tell us that:
Britain would no longer be part of the single market. And questions of regulation would have to be negotiated, as we do now with Switzerland, between the UK and the EU. This could lead to difficulties on both sides.
This is entirely typical of the genre but, if the Eurosceptic community were united behind a determination to continue participation in the single market after we leave the EU, then this sort of claim, by now, would have withered on the vine. Instead, in the face of so many Eurosceptic factions which actually want us out of the single market, we are left with the weary task of shouting from the margins that we can maintain the single market, and none of the manufacturers' concerns would materialise.

Furthermore, when it comes to regulatory issues, we know full well that the bulk of vehicle regulation is now coming from UNECE, and the WP.29 agreements, to which both the EU and the UK are contracting parties. There is little chance under any circumstances, therefore, that we will lose regulatory convergence, so there would be few "questions of regulation" which would arise.

Given the Flexcit scenario, therefore, the effects on the car industry if Britain left the EU would be neutral – and that applies to continental car-makers as well.

However, over term, we have seen endless propaganda from the pro-EU press, such as in the Guardian and the Financial Times, with a thoroughly dishonest report commissioned by the SMMT arguing that "Europe is fundamental to the current and future success of the UK automotive industry".

When I was researching for this piece, though, I started to get a glimmer of a different vision which, far from supporting this claim, actually completely contradicts it. The UK car industry could very well be much better off outside the EU. Leaving would not be neutral but actively beneficial.

Nevertheless, the essence of this argument is complex. As it stands, the volume market in Europe is vastly over-supplied and competition is high, while car owners, taking advantage of improved manufacturing standards, are keeping their cars longer. As a result, there is enormous price pressure and, while production is expanding, overall profitability is poor.

For the industry, there are different ways of addressing this, but one way is to take advantage of the EU's single market (which for tariff purposes also includes Turkey) and move production to low-cost plants in eastern or central Europe of to Turkey. This is a trend which is expected to continue. It is even happening with high end production.

On the other hand, a way Britain can improve national revenue is to re-shore component manufacture, as we see from the Telegraph which tells us that only about a third of the parts that go into cars made in Britain are sourced here. By comparison, we are told, the figure in Germany is about 60 percent.

The German situation is presented as if this was a good thing, and efforts are being made to grow the UK supply chain. But one gets a clue from this report from the European Centre for International Political Economy (ECIPE) that it is not such a good idea.

ECIPE sees that lack of globalisation as a bad thing, partially explained by EU tariffs on car components and manufacturing equipment. Tariffs, it says, have more prohibitive effects on car supply chains due to the low margins and the vast number of technologies and components that are involved.

Given the variety of components and the vast number in each car (up to 30,000), it is unlikely that components are best sourced from one country or even one region. Tariffs put EU manufacturers "in a disadvantaged position".

Rather than protecting EU components and machinery manufacturers - since the R&D efficiency in the EU on average is lower, and better technologies are available from subcontractors abroad – we end up paying more for less-advanced components.

By leaving the EU, we are able to widen our sourcing and take advantage of the global supply chain. The net result is that we are able to make better, cheaper cars, improving our competitive position. And there is good evidence that, by transferring work to global suppliers, competitiveness improves. It also improves access to emerging markets - if we buy components from emerging markets, they tend to be more inclined to buy our cars. 

What we lose in low-value component production, therefore, we gain in increased sales of finished vehicles and improved profitability. It is the need to improve profitability which is the greatest challenge and, if the UK industry can do that, we stand a better chance of keeping indigenous production. If plants are profitable, there is less temptation to move them to low-cost production centres.

Absolutely to nail this case would vastly strengthen the "no" campaign, but instead of doing this type of ground-breaking research, we and others are constantly having to devote our energies on revisiting the same issues, and going back to fight the same battles, all because there is no agreement on the basics.

Essentially, therefore, there is an urgent need to settle the basics, so that we can widen our own research base, and start doing real damage to the opposition. But if we keep getting dragged back to rehearse the same old arguments, instead of moving on, this ain't going to happen.

As for the scaremongering on the car industry, the evidence indicates that we are more like to lose our industry than keep it, if we stay in the EU.

Richard North 04/07/2015 link

EU Referendum: old politics to the fore


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Having taken no end of hassle from multiple sources for not being a "team player" – or words to that effect – in the anti-EU movement, it must by now occur to even the most ardent proponents of unity that Euroscepticism, and therefore the "no" campaign, has something of a problem.

It was only a couple of days ago that Lord Tebbit was commenting on this essential problem and now, from the other side, we have Lord Hannay making similar observations. But this follows on from my earlier piece on 2 June – exactly a month ago – when I wrote of the shambles in the anti-EU movement which, if anything, is further now from a unified stance than it has ever been.

Even yesterday, I heard reports of plans for a coup within the parliamentary Conservative Party to wrest control of the agenda from the recently formed Exploratory Committee, while it is an open secret that there are major differences between various factions in Westminster. With Farage mocking the lack of unity, there is not the slightest possibility of there being agreement.

If it wasn't for the fact that the putative "yes" campaign was almost as divided, and certainly its equal in incompetence, our multiple bidders to lead the "no" campaign would be in even more serious trouble than they are now.

The great difficulty for us, though, is that why a "yes" campaign can maintain a level of incompetence and still win, we can't. Already behind in the polls, and fighting against our own government and the representatives of the biggest trading bloc in the world, the default position of the "no" campaign is that we lose.

Putting this in a different way, in order to win the referendum, we are going to have to run an inspired campaign. And since Euroscepticism – with the possible exception of the anti-euro campaign – has a record of unmitigated failure, what went before becomes an unreliable guide as to how we should fight the coming campaign.

In short, if there is to be any chance of winning, we must try something different. And while that has inherent risks, innovation is less risky then following the tried and test route. In that direction lies certain failure.

However, there is another element here, which I am increasingly beginning to perceive as a crucial issue and one which over the next few weeks may dominate arguments on the planning process and the shape of the campaign. This is the mistaken belief that the referendum can be fought on the same lines as a general election.

Understandably, political pundits are homing on the similarities, and relying on their experience of campaigning to suggest ways of fighting the referendum, but they are being caught out by failing to realise that there are crucial and irreconcilable differences.

The interesting thing here is that it wasn't always this way, but a facet of campaigning that emerged with Blair's "New Labour" revolution. Up until then (although we can argue about the timing), we were dealing with conviction politics, where political parties held certain fixed principles.

In this political environment, the job of campaigners was simply to sell the party message. But, as Labour was perceived increasingly to be unelectable, it ditched its principles (as in Clause 4) and reinvented itself. Focus-group driven, the strategy became to find out what messages the electorate (and in particular the "swing voters") wanted to hear, and to give them precisely those.

This was possible because party leaders were in control and could define their manifestos. They were able to dictate what should be laid in front of the public and what should be hidden from sight.

If this can be described as "new", conviction-free politics, later to be adopted by David Cameron who has long since abandoned traditional Conservatism, it may still prove the winner for general elections. But it is not going to work for referendums – at least, not this referendum. This one has to be fought on "old politics" lines.

The essential difference in this "old politics" model is defined by the inability to change the message to suit the audience. We were putting to the public the question of whether we should withdraw from a supranational, treaty-based organisation called the European Union. Attendant on that, there are certain fixed events and consequences which cannot be changed.

The first of these fixed points is that the initial period of an Article 50 negotiation is set by treaty for a period of two years, a period which can be extended but only with some difficulty in a process that is uncertain and carries considerable hazards.

Planners, therefore, need to work on the basis of concluding negotiations within a two-year period. Yet, we learned yesterday, for instance, that Mercosur and the EU appear set to reach a formal agreement on tariffs and are close to concluding talks on a trade deal which have been ongoing since 1999 – 16 years so far to cover less ground than the Article 50 negotiations will be expected to agree on.

To agree at all, therefore, is going to take some inventive concessions if there is to be an acceptable outcome. There is no room for messing here. The reality of the treaty provisions cannot be altered. The message is unchangeable – to get through the process, we are going to have to accept a sub-optimal deal. There simply isn't time to negotiate an ideal solution.

Another unchangeable message is that, in order to win a referendum, we are going to have to preserve our participation in the Single Market. And, in order to achieve that, we will have to concede freedom of movement.

These two issues alone will have to define the way we fight the campaign, and there is no scope whatsoever for taking the easy way out and offering voters something more palatable. Old-fashioned skills will have to be re-learnt – the art selling political realities as they are, and not how you would like them to be.

Neither is this the extent of the differences. In a general election, a party can win office with a vote, in percentage terms, in the mid- to high-thirties. To win a referendum, we need more that fifty percent of those who vote, preferably on a high turnout. And to win convincingly, we need to be in the seventies.

Then, in general elections, we see the bulk of the campaigning energy focused on swing voters in marginal seats. In this fight, we have to carry the nation with us. Every vote counts, no matter where it comes from. That alone demands a different strategy. 

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Most of all, though, the campaign is about confronting inconvenient truths, and providing convincing answers to them. Lord Hannay avers that we haven't "heard a cheep from the Eurosceptics about how they would propose to support British agriculture or Britain's poorer regions or how Britain's scientific research would fare in the absence of the substantial net benefits our universities get from the EU's research programme".

Like the rest of his ilk (and much of the Eurosceptic community), he ignores Flexcit. This Hannay has to do in order to assert that: "Perhaps those questions are just too difficult to answer, or perhaps the Eurosceptics cannot agree on the answers to give".

He's actually right on the second part, and he's also right when he says: "But answers there would have to be if we withdrew". The strategy of the diverse Eurosceptic groups at the moment, in the absence of answers, is to ignore the problem and/or to deny the consequences of their choices - like, for most of their choices, we see repeats of the scenes above, as trade grinds to a halt. Or they seek weak, anodyne non-solutions around which the movement could coalesce, in the hope that the difficult questions will not be raised.

The trouble is that Hannay is right. Answers will have to be given, and if we don't raise them, the opposition will. There is no possibility of a fudge, and no opportunity to alter the political realities to produce more palatable messages. We either grasp the nettle, or give up now and stop wasting our time.

This is "old politics". Then as now, they don't compromise, and they don't take prisoners.

Richard North 03/07/2015 link

EU Referendum: FUD-proofing required


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In an obscure journal, we get another example of the steady drip-drip-drip of FUD coming from the pro-EU scare industry. This time it is Peter Gowers, CEO of the Travelodge hotel chain, who warns that the "hospitality industry must wake up to the potential dangers posed by Britain voting to leave the European Union".

Gowers is, of course, worried about freedom of movement within the EU, which might be seriously circumscribed if we withdraw. It would massively affect the £126bn tourism industry, adversely affecting nine percent of the UK economy.

If we adopted Flexcit, or a variation thereof, there would be absolutely no problem. The visa-free movement of people from the EEA area would continue, with tourism unaffected by our withdrawal. 

On the other hand, if we were to allow the WTO option to go ahead, or any settlement which excluded free movement provisions, we would be looking at very substantial damage to an industry which, as the UK's third largest employer, give jobs to 3.1 million people (2013), accounting for 9.6 percent of total employment.

As it stands, anyone who works directly in the tourist industry, or is closely related to someone who does, might have good cause to fear a "no" vote in the referendum, potentially driving six million or more (including relatives and dependents) into the "yes" camp. Those are votes we can ill-afford to lose.

A coherent "no" campaign, therefore, needs to have a serious, and well-thought-out response to claims that the tourism industry would be put at risk. After all, a case could be made that the UK stands to lose far more through job losses and other economic damage that it stands to save through stopping EU subscriptions.

But, the moment we seek to assure voters that freedom of movement will be maintained, up pops the vexed question of immigration. Somehow, we need a system which can distinguish between genuine visitors, and unwanted immigrants. That, in turn, requires a serious and sophisticated policy response, to achieve something which no current government has so far been able to achieve - real reductions in immigration. 

Here, even walking away from the EU's rules on free movement is not necessarily an answer. While it can be argued that it is a necessary condition for us regaining control of immigration policy (as respects the EU), no one but the wildest of optimists would argue that it was, in itself, was sufficient.

On the other hand, there is a credible alternative argument to be made. Firstly, we could accept the specific freedom of movement provisions of the EEA agreement, shorn of the horizontal agreements which have been added later, that give rights to dependants. Then, we could instigate administrative reforms to the Borders Agency, and implement a raft of measures to reduce "push" and "pull" factors.

By this means, we could achieve an effect comparable to that which could be gained by removing freedom of movement agreement, thereby retaining preferential access to the Single Market.

This, however, is not a certain outcome, but if we are to address the FUD – not unreasonable in the case of tourism – then we have to have some answers. That means a properly argued exit plan, with the authoritative backing of any official "no" campaign.

Those who would argue otherwise need to tell us how they would protect us form the FUD. How is the "no" campaign to counter accusations that hundreds of thousands of jobs are at risk, and millions of pounds, if we pull out of the EU? 

Among the things we need to know is how, if freedom of movement is removed, we would deal with the epidemic of "overstayers" who traditionally comprise a significant component of illegal immigration.It is all very well "closing the borders" to immigrants from the EU, but if there is then visa-free entry from the continent – and a substantial "black" economy - the only result will be a massive surge in illegal immigration from the 32 million who visit our country each year.

In any credible "no" campaign, such issues can't be ignored, and answers can't be delivered "on the hoof". And nor have they been satisfactorily addressed by other sources. If we revert to "free movement of workers", which the original EEA agreement encompassed, then there will be no provision for free movement of people and we will have to revert to reciprocal visa arrangements.

That will, of course, will create no end of stresses, as the EU has made it crystal clear that it is in no mood to make any concessions on the fundamentals. We are not going to get cosy little deals, as between New Zealand and Australia. If we want reciprocity, we are going to have to buy into the whole freedom of movement package. We cannot assume there will be any compromises or half measures. To do so provides the illusion of a solution which is simply not there to be had.

The issues we have to confront, therefore, necessarily make for a complex, difficult and uncertain future. But seeking simple mantras and easy answers isn't the way forward. Complex issues are complex, by definition. We can only go so far in offering simple solutions before we lose touch with reality.

Therein lies the rub. The purpose of a political campaign is to communicate a message. But to complain that the message is complex and difficult, and thus to call for a change of message, is to defeat the object of the exercise. That is like a PR firm being engaged to sell soap and deciding instead to sell bananas because it is easier.

So yes, we have a problem. In the coming campaign, single market access and freedom of movement will be inextricably linked. Any solution will be extremely difficult to present in a clear, decisive way that will satisfy all comers. But there are solutions to be had, and with some inventiveness, we can find a way of selling them.

On the other hand, ignoring the problem, or selling bananas instead of soap, is not going to solve anything. We know what the problem is. We need to deal with it.

Richard North 02/07/2015 link

EU Referendum: an open letter to Dominic Cummings


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Dear Dominic

You have been prominent in the media recently, slated as a key figure in the development of an effective "no" campaign, and your role in the newly-formed "Exploratory Committee" has been well advertised.

As such, you are in a position to have a significant impact on the shape of the "no" campaign, to which effect it is extremely helpful and generous of you to air your initial views on your own blog on aspects of the campaign. In particular, you pose two questions – firstly as to whether there might be not one but two referendums, and then you ask whether it is necessary for the "no" campaign to produce an exit plan.

Since you have aired these issues in public, in the interests of openness and fair debate, I will answer your points on this blogpost. Because of the complexity (and importance) of the issues, it may take me a couple of days to complete this one post, especially as I intend to take into account any relevant comments of my readership – which is also entitled to express a view.

When the piece is complete, I will also send you an e-mail with a link, and if you wish, I can also send you a copy in any other format, should you want to circulate it further. It would help then to have a considered response, published out in the open, but I will not hold you to that. You are undoubtedly very busy.

However, I will state that, in my view, there are no more important a questions in relation to the forthcoming "no" campaign than, firstly, whether we should have an exit plan, and then, secondly, the nature of that plan (and, indeed whether there should be one or several plans).

Upon the outcome of this issue will depend my attitude to the campaign lead, and my degree of involvement in the campaign. I am sure many of my 10,000-plus readers will also be taking a keen interest in the outcome, and none of us will want to expend much energy on a campaign if it is doomed to failure from the outset.

With that in mind, I will address first the issue of whether the "no" campaign should have and exit plan, to which effect, if I understand you correctly, you are veering towards the view that we should not have one. To quote you on the matter, you wrote:
There is much to be gained by swerving the whole issue. No10 is dusting off its lines from the Scottish referendum. Perhaps they can be neutralised.

Different people have different ideas about the best way to leave. For example, some people suggest we should leave the EU but simply remain in the Single Market while we negotiate a new deal. Others have different ideas. Global rules set by the World Trade Organisation provide some guarantees against European countries discriminating against British trade. But none of this is the real point. We are not a Government. We can't negotiate anything. A NO vote as a simple matter of law does not mean that we leave the EU tomorrow. A NO vote really means that a new government team must negotiate a new deal with the EU and they will have to give us a vote on it. If you want the EU to keep all the power it has and keep taking more power as it has for decades, and you're happy paying billions to the EU every year instead of putting it into the NHS – then vote YES. If you want to say "stop", vote NO and you will get another chance to vote on the new deal. If the country votes YES, we've lost our chance to change anything. We may not get another vote for decades, after we've had to bail out euro countries and had another few decades of the EU's useless and inhumane immigration policy. If the country votes NO, we can force politicians to get us a better deal.
The key points which I take from this (which I assume is the expression of your opinion) is that we – i.e., the "no" campaign - is not a government and can't negotiate anything. Therefore we can't dictate terms, which are basically up to government. Instead, therefore, you propose an alternative, essentially arguing for a fear-based (i.e., negative) strategy, of scaring people into voting "no", essentially because, if they do not, they'll not get another chance in decades.

I trust that I have properly and accurately conveyed the thrust of your argument – if I have not, please do get back to me and I'll make the necessary adjustments. But, on the assumption that I am correctly conveying the flavour of your stance, if at this point I say: "with the greatest of respect ... ", you will know exactly what that means.

Some long time ago – in March 2011, to be precise - I wrote a piece about what I called the Stokes precept. It was named after the Conservative MP Richard Stokes, who contributed to a debate in the Commons on 15 October 1940 (at the height of the London Blitz) on war aims. These at the time (and were to continue to be) an extremely contentious issue, whence Mr Stokes argued that that you cannot campaign solely on a negative. You have to give people something positive to aim for. 

Arguably, it was the failure of Churchill to offer a positive vision for his war aims (resolutely refusing to discuss them, or permit a formal statement) that lost him the 1945 general election. And here you are suggesting that we fight on a negative basis, a strategy that, in my view, will ensure we lose.

What in fact I am arguing for is three things, what I've been calling a three-legged stool. I put this up on the blog and any effort spent in reading it would be well rewarded. It goes through the argument in detail, for an exit plan and other components of what should form the "intellectual case" needed to underpin our campaign.

Specifically, I argue, we must have our negative case (as you have set out - although it needs much more). We then need a "positive" vision - a picture of what a post-exit Britain might look like - effectively conforming with the Stokes precept.  But then, as I have written God knows how often - and in detail in Flexcit, which you really need to read - no plan will be successful if drafted without reference to the capabilities and intentions of the enemy.

In this context, again and again we see - in practice and in terms of declared intent - that the pro-EU side intends to rely mainly on fear. More specifically, it is using FUD - fear, uncertainty and doubt - powerful tools which act in favour of the status quo.

Therefore, in addition to our negative pitch, and our positive vision, we need a FUD neutraliser. When the enemy argues that leaving the EU is a terribly dangerous venture, we have to counter by illustrating that leaving the EU is a perfectly practicable proposition, entirely reasonable and safe. That is the purpose of an exit plan. It is not to second-guess the government. It's primary purpose is to demonstrate to the wavering voter that leaving the EU is possible and safe.

Elsewhere, I have painted a picture of people on the bank of a river, looking at an island in the middle, in which is situated a utopian village. To motivate them to go there, I argue, you must make the case that to stay where they are is not optimal (or even very bad) and that the island is a perfect destination. But you are not going to convince people to make the crossing if the waters are crocodile-infested and those who attempt to swim across face certain death. You must provide a sturdy boat, and a seasoned crew.

Thus do we complete our three-legged stool. We have our case for saying "no" – why we need to get out. We paint a rosy vision of what it would like to be out, and then we reassure people that it is safe to cross over into the promised land.

Putting this another way, this is basic motivational theory. I won't give you a specific link because there are hundreds which say much the same things. In essence, in order to get people to change (in this case, vote "no" in a referendum when they are inclined to vote the other way), you first have to establish the need. People need to be convinced of the need to change.

Secondly, you must identify the reward – the reason why the risk is worth it. Then, thirdly, you must remove the barriers to realisation. In this coming referendum, the most important barrier is fear (or FUD, if you like). That's what makes an exit plan essential. And I really do mean essential – not an optional extra, but a core part of the "no" campaign's intellectual trinity. Without it, I would argue, a campaign is unlikely to succeed. 

Before leaving the matter there, however, I must return again to your idea that the detail of an exit plan is best left to government, because we, the "no" campaign, are not in a position to execute such a plan. What, in effect, you are saying is that the development of an exit plan should be left to those in the position to execute it.

You might care to pause to consider this argument for, if it was valid, it would negate much of the rationale for the think-tank industry that inhabits (some might say infests) London. Part of the necessary process of advocacy - often adopted by think-tanks - is not only to propose a course of action, but suggest to government the means by which it should be achieved. 

It is by no means unusual for government then to borrow ideas from those think-tanks (or other bodies), in order to execute their policies. One might even observe that the whole idea of the European Union came from outside agencies, as indeed did the methodology for making it happen.

An important part of making an idea happen, therefore, is to suggest (sometimes in some detail) how it might happen. This is another good reason why a exit plan should be produced independently by the "no" campaign, with the added advantage that in the event of success and the Government is forced to negotiate our exit, the plan can be used as the yardstick against which its performance can be measured. If it delivers a less advantageous deal than we suggest is possible, we have reason to ask why.

Finally, to conclude this part of my letter on this issue of whether we need an exit plan, I must refer once more to the activities and intentions of our enemies. In this context, one sees Sir Mike Rake, in his persona as President of the CBI openly taunt the "no" campaign on its failure to coalesce around a credible exit plan. Thus, he said at the May speech to the CBI annual dinner:
No-one has yet set out a credible alternative future to EU membership. The current alternatives are not realistic options – little or no influence and the obligation to comply with EU principles whilst still paying most of the costs.
Sir Mike is not the first or only person to make this point. In November last year, we saw Juergen Maier, chief executive of Siemens UK, note that, "It is perturbing that those who claim that Britain would be better off out have not put forward a detailed alternative for what 'out' means".

In the wake of Sir Mike's speech, we saw this theme picked up by a leader in the Observer and, by reference to the Business for New Europe (BNE) site, we can see this developing into a major attack point for the "yes" campaign, which will increasingly be used against us.

On this basis, and much more, its is overwhelmingly evident that the "no" campaign cannot go into this fight without a comprehensive, clearly thought-out exit plan. There is no gentle way of putting this: to argue against having such a plan is simply not a credible position.

Before moving on to address the question of whether there should be a unified exit plan, I now turn to your comments on a second referendum. In the first instance, you pose the question of whether the Government will suggest a second referendum, in the event that we succeed with a "no" vote. That raises some intriguing possibilities.

You suggest that offering a second vote would give the government the opportunity to reverse a loss in the first, so that "yes" would mean victory yet "no" would not necessarily mean defeat. European governments, you remind us, have held second votes repeatedly over the past quarter century.

On this basis, you posit a scenario where the government says: "If the public votes 'no', we will have to negotiate an exit deal with the EU and we believe that it is only right that the public has a vote on the final deal". If it did offer this option, you assert that it would be likely that Labour would do the same. You even argue that Labour might suggest this, and that the Government would feel obliged to agree.

Secondly, you ask whether the "no" side should demand a second referendum in the hope of forcing the parties to commit to one. At this juncture, I might myself suggest that, when you get round to reading Flexcit, you will note that we entertain the possibility of a referendum on the outcome of Article 50 negotiations. There is a reference to one on page 3, in the summary we so helpfully provide for people who haven't the time to read the whole document. There is another on page 123, and another on 393.

For sure, we don't make a big thing of it, not least because I have mixed feelings about the utility of a "yes-no" referendum. A "yes" vote would at least give democratic legitimacy to the agreement, but a "no" vote would present us with some problems. There does not appear to be a facility within Article 50 for the departing state to reach a provisional agreement and come back for more talks if it can't get it ratified. The outcome would mean dropping out of the treaties without a replacement agreement. This, as we will see shortly, would be disastrous. 

On the other hand – as we have observed earlier in this letter – a referendum on the Article 50 agreement would serve to keep the Government honest. If, for instance, it sought to broker a dishonest deal which meant rejoining the EU disguised as something else – which is quite possible – then a new "no" campaign could pull the plug, and warn the nation to reject the deal. 

As to whether the "no" campaign might argue for a second vote, which is a scenario you discuss, I tend towards the view that we should do so. And if for no other reason, it sets the tone for a new, independent nation. If the Government took us into the EEC (and then the EU) without a vote, it can at least commit to a fully democratic process when taking us out of the EU.

You yourself argue that, "as a matter of democratic accountability, given the enormous importance of so many issues that would be decided in an Article 50 renegotiation – a far, far bigger deal than a normal election – it seems right to give people a vote on it". I tend to agree.

However, you also argue that it makes a "no" vote seem much less risky. "If you vote 'yes', you won't get another vote for another 40 years – if ever. You should vote 'no' to Cameron's rubbish deal", you suggest. "If you vote 'no', you will force a new Government to negotiate a new deal and give you a new vote. A 'no' vote is much safer than a 'yes' vote".

With this last argument, I am not sure I agree. It seems rather too convoluted and confusing – and thus easily demolished. The question is whether the initial "no" vote is safe on its own merits. And that depends largely on whether there "no" campaign can deliver a credible exit plan. We have gone full circle.

I now turn to another of the crucial matters that you raise, the question of whether we need a unified exit plan, as opposed to the argument over whether we should have one at all. "Creating an exit plan that makes sense and which all reasonable people could unite around", you observe, "seems an almost insuperable task". You add, quite rightly, that: "Eurosceptic groups have been divided for years about many of the basic policy and political questions".

To address the key point, though, and to answer the question of whether we need a unified exit plan, the response has to be, most emphatically in the negative. Unlike the advocates for European political integration, we do not need to be tied to a single, monolithic plan. We can embrace and rejoice in plurality and diversity.

Whether we need a "unified plan", therefore, it the wrong question. To get to the right question, we need to go back to Sir Mike Rake, who asserted that "no-one has yet set out a credible alternative future to EU membership" – or (unspoken) a means by which we could safely arrive at that future destination.

The operative word, therefore, is not "unified", but "credible". If the "no" campaign is to offer or endorse one or any number of exit plans, they must meet one test, that of credibility.

What we cannot afford is official recognition of any plans which do not meet the credibility test. Even if the "no" campaign also endorses a plan which is credible, the enemy will attack the weakest link. It will adopt divide and conquer tactics, and afford most prominence to the weakest plan.

In your blogpost, you kindly refer to our plan, Flexcit, although you tell us that you need to study it more. You also state that, "Global rules set by the World Trade Organisation provide some guarantees against European countries discriminating against British trade", which is a tangential reference to a plan given a number of titles and descriptions, but which is generically known as the "WTO option" - or sometimes the MFN-based approach.

There are other options, and most (including the WTO option) are described and analysed in depth in Flexcit, and you would find their study rewarding. The sections convey essential knowledge, without which you will struggle to understand the arguments being put forward.

Although we assert that Flexcit should be adopted officially by the "no" campaign as a stand-alone plan, we are also quite relaxed about other plans being adopted. Our only proviso, on which our support for the official campaign is conditional, is that they should be credible. 

However, what is happening at the moment is that a bid is being made to have the "WTO option" adopted as the official credo of the "no" campaign. We also learn that Flexcit, for reasons which have not yet been openly declared, should be discarded. Furthermore, it is my understanding that you are involved in the process of selection, albeit that an official "no" campaign has yet to be selected (and can only be by the Electoral Commission).

But, if there is to be a contest of ideas, it is healthy that it should be out in the open, not least so that justice is seen to be done. There has been far too much hole-in-the-corner stuff, some of which has been a disgrace to the good name of Euroscepticism. Your facilitation of an open debate is thus doubly to be welcomed.

Now, against that background, I will aver that, in whatever name or guise it might appear, the "WTO option", as a plan, entirely lacks credibility. We (for I am not alone in this) would go so far as to suggest that the ideas being advocated by a number of prominent groups are dangerously flawed, to the extent that, if adopted by an official "no" campaign, they could be instrumental in losing us the referendum. Their destructive potential cannot be overstated.

To be absolutely clear on what is being discussed, though, we will reiterate our understanding that the "WTO option" is one where the UK leaves the EU without having negotiated any trade agreements with the EU, either within the framework of Article 50 negotiations, or on the margins. Instead, it relies entirely on the multilateral WTO agreements covering trade-related matters.

As to this option, I've already trashed it on this blog, I've taken it apart in Flexcit and I've held seminars and workshops explaining why it's a non-starter. But like the resignation of a Ukip leader, just when you think it's gone, up it comes again.

As you review the living dead on your blog, I note that you assert that: "Global rules set by the World Trade Organisation provide some guarantees against European countries discriminating against British trade", and we also note from another source the claim that: "Were the UK to leave [the EU], it would continue to have access to the EU's markets, as World Trade Organization rules prevent the EU from imposing unfair, punitive tariffs on UK exports".

Looking briefly at your comment, where you assert that the WTO provide some guarantees against European countries discriminating against British trade, one has to take note of the "some" qualifier as regards protection against discrimination. The point here, that you need to take firmly on board, is that the WTO rules only afford very limited protection against discrimination, and then only in respect of tariffs.

But, as the WTO site itself says, "by their very nature RTAs (Regional Trade Agreements – as is the EU) are discriminatory", and, under WTO rules, an amount of discrimination against third countries (and that would include the UK) is permitted. The WTO observes:
Modern RTAs, and not exclusively those linking the most developed economies, tend to go far beyond tariff-cutting exercises. They provide for increasingly complex regulations governing intra-trade (e.g. with respect to standards, safeguard provisions, customs administration, etc.) and they often also provide for a preferential regulatory framework for mutual services trade. The most sophisticated RTAs go beyond traditional trade policy mechanisms, to include regional rules on investment, competition, environment and labour.
The crunch issue here is the "preferential regulatory framework". Unless goods seeking entrance to the EU Single Market (i.e., British exports) conform to the regulations which comprise the framework, they are not permitted entry. Thus, the assertion that, if the UK left the EU, "it would continue to have access to the EU’s markets …", is simply not true. And - to spell it out - if it is not true, it is false.

With or without tariff issues being resolved – which are actually irrelevant to the access issue - the claim is false. Tariffs do not prevent access to a market. They simply impose a tax on entry. The actual barrier is regulatory conformity – what is known generally as a non-tariff barrier (NTB) or, sometimes, as technical barrier to trade (TBT).

Nevertheless, it is generally recognised that, in order to access the Single Market, goods must comply with EU rules. Conformity is the way of overcoming the NTB. But what advocates of the WTO option have not realised is that there is more to it than that – much more. Potential exporters not only have to ensure their goods conform, they must provide evidence of their so doing. This requires putting the goods through a recognised system of what is known as "conformity assessment".

We are at this point entering serious "nerd" territory. If your eyes are beginning to glaze over, all I can say is welcome to my world. It has taken me years of mind-numbing, tedious study to understand this amount of detail, and either your know it, or you don't. If you don't, you are going to make serious mistakes. And that is just what the "WTO option" advocates have done. Bear with me and you'll see why their mistakes are not so much serious as catastrophic.

And, for all that, the fundamentals are quite simple. The point about the Single Market is that border checks have been eliminated. The common rules are monitored by relevant national authorities and there is mutual recognition of standards. Thus, if you so desire, you can load a truck with grommets in Glasgow and ship them all the way to Alexandroupoli on the Turkish border, with just the occasional document check.

But the moment we leave the EU, this stops. Your grommet manufacturer may still comply with exactly the same standards, but the testing houses and the regulatory agencies are no longer recognised. The consignment has no valid paperwork. And, without it, it must be subject to border checks, visual inspection and physical testing.

What that means in practice is that the customs inspector detains your shipment and takes samples to send to an approved testing house (one for the inspector, one for the office pool, one for the stevedores and one for the lab is often the case). Your container inspection is typically about £700 and detention costs about £80 a day for the ten days or so it will take to get your results back. Add the testing fee and you're paying an extra £2,000 to deliver a container into the EU.

Apart from the costs, the delays are highly damaging. Many European industries are highly integrated, relying on components shipped from multiple countries right across Europe, working to a "just in time" regime. If even a small number of consignments are delayed, the whole system starts to snarl up.

Then, as European ports start having to deal with the unexpected burden of thousands of inspections, and a backlog of testing as a huge range of products sit at the ports awaiting results, the system will grind to a halt. It won't just slow down. It will stop. Trucks waiting to cross the Channel at Dover will be backed up the motorway all the way to London.

For animal products exported to the EU, the situation is even worse – if that is possible. Products from third countries (which is now the UK) are permitted entry only through designated border inspection posts (BIPs). Only at these can they be inspected and, if necessary, detained for testing. But, for trade between the UK and EU member states, there are no designated BIPs. Until one (or more) has been nominated and equipped trade in these products stops dead - say goodbye to a £12 billion export trade.

If the way out of the country becomes blocked, very quickly the return route gets blocked and incoming trade from the EU starts suffering. In the UK, goods from the EU are no longer delivered. Trade slows. Manufacturers which depend on imported components start struggling and then have to close. And while the naysayers talk about losing three million jobs if we leave the EU, we are looking at twice that and more – seven or eight million jobs are at stake.

At this point, you might say, how can this happen? The "WTO option" advocates will tell you that countries such as China, the United States and Australia all trade with the EU without formal trade agreements, and therefore operate under WTO rules. They don't have these problem – so why would the UK? The answer, however, is tragically simple. These countries don't rely solely on WTO rules.

What our "WTO option" advocates have done is make a very basic but fatal mistake. They're obsessed with tariffs and haven't begun to focus on non-tariff barriers. Thus, by and large, they are only looking at trade agreements dealing with tariffs - a sub-set of international agreements which are registered with the WTO. But there are many different types of agreement and many which involve trade, either directly or indirectly, which are not registered with the WTO. These, for our "WTO option" advocates, remain under the radar. To them, they are invisible.

Yet one of the most important types of trade agreement is the Mutual Recognition Agreement (MRA) on conformity assessment. This gets round the problem of border checks, as the EU will then recognise the paperwork on product testing and conformity certification. Throw in agreement on Customs cooperation – to ensure that official paperwork and systems mesh – and you are on your way to trouble-free border crossings.

China has a Mutual Recognition Agreement, signed in May 2014, the United States has one on conformity assessment which runs to 81 pages, agreed in 1999. Even Australia has one. All of these are outside the remit of the WTO but they are nonetheless trade agreements, and vital ones at that. But look then what the think-tank Global Britain - another "WTO option" advocate - is doing. "As an example", it writes, "Australia has no trade agreement with the EU ... ". It then goes on to cite an EU web page, which actually tells us:
The EU and Australia conduct their trade and economic relations under the EU-Australia Partnership Framework of October 2008. This aims, apart from cooperation on the multilateral trade system and trade in services and investment issues, to facilitate trade in industrial products between the EU and Australia by reducing technical barriers, including conformity assessment procedures.
What is the EU-Australia Partnership Framework, if not (inter alia) a trade agreement? The details are set out here, and we also see that it sets the framework for the all-important MRA on conformity assessment. One MRA is here, running to 110 pages, with an amendment here running to a further 20 pages.

There are, in fact, 82 agreements between the EU and Australia, of which 18 are bilateral. There are 65 between the EU and China, of which 13 are bilateral. Between the EU and the United States, there are 135, of which 55 are bilateral. As regards trading agreements, not only is Global Britain incorrect in its assertions, its authors apparently don't even read their own reports.

Such is the importance of agreements such as the MRAs that the UK would have no option but to seek deal with the EU, for which there is a facility within Article 50. But, the moment it sought such deals, it would no longer be relying on exclusively on WTO rules. It would be seeking bilateral agreements along the lines of the so-called "Swiss option".

One can say, unequivocally, that the UK could not survive as a trading nation by relying on the "WTO option". It would be an unmitigated disaster, and no responsible government would allow it. If, on the other hand, the official "no" campaign adopts it, the "yes" side will be counting its blessings.

Initially, we will be looking at a slow burn. In what is an arcane field, pro-EU analysts are almost as ignorant as our own. And there is always a possibility that mutual ignorance would cancel out pro- and anti-EU campaigns. But, with this ticking time bomb at the heart of the "no" campaign, it would be unwise to assume that real trade experts will not brief the opposition on the implications of the "WTO option". If that happens, we can expect the FUD to be lethal. The chances of the "no" side winning would quickly recede to nil, especially if the demolition took place in the last weeks of the campaign.

But now, a further question arises, as to why a number of prominent bodies (and one in particular) got it so wrong, and are so keen to reject Flexcit, even though it apparently delivers the answers – or so we would aver.

To reach an answer on why, almost simultaneously, most of London-based think-tankers have suddenly taken the "WTO option" to their hearts, one has to recall the shambolic IEA Brexit competition last year when €100,000 was wasted on a trivial piece of work, when all six finalists just happened to support the so-called "Swiss option", or variations thereof. 

But, with the case for the Swiss option in tatters and with the criticisms mounting, out it all goes as the think-tankers turn on a sixpence and go chasing after their latest hystérie du jour. That's €100,000 for a master plan that has had a shelf life of 14 months before being unceremoniously dumped.

The point that has to be made, therefore, is that the London claque is in the grip of a disease, identified back in 1896 by Gustave Le Bon in his book The Crowd. The disease is one of prestige, of which he writes:
The special characteristic of prestige is to prevent us seeing things as they are and to entirely paralyse our judgement. Crowds always, and individuals as a rule, stand in need of ready-made opinions on all subjects. The popularity of these opinions is independent of the measure of truth or error they contain, and is solely regulated by their prestige.
When you come to consider the arguments above, you need to be sure that you are making an objective assessment, and are not clouded by this disease which leads so many people astray. I touched on this in a recent post and conclude with the observation that there is far too much at stake to allow this to have its usual effect.

There is much more to write, and some of the points you raise on your blogpost I have not addressed. But this is neither the time or place: there are some other pressing matters I must attend to. Thus, I trust what I have written so far is helpful and I look forward to a continued dialogue. Before I finally do leave this, my own blogpost, though, I will quote your own words back at you:
To those who say these discussions should happen only in private, I strongly disagree. Much about a campaign has to remain secret but these big questions are necessarily part of public debate. A decade has been largely wasted. These big things must be confronted now in parallel to establishing a professional campaigning organisation and public discussion raises the probability of the NO campaign getting things right.
I could not agree more with those sentiments, and commend you wholeheartedly for expressing them. And I will add one sentiment of my own. I voted in the 1975 referendum and, having gone out and bought a copy of the Treaty of Rome – then to read the words "ever closer union" – voted "no". This time round, I will be fighting as well as voting, and with a determination to win. For those who do not share my commitment, I have a few words of advice.

Don't get in my way.

Yours truly,


Richard North 25/06/2015 link

EU Referendum: a partisan assessment


000a Reuters-013 rating.jpg

The "Big Three" global credit rating agencies – the US based Standard & Poor's (S&P), Moody's, and Fitch Ratings - have come under intense scrutiny in the wake of the global financial crisis, writes the Council on Foreign Relations.

Meant to provide investors with reliable information on the riskiness of various kinds of debt, these agencies have instead been accused of exacerbating the financial crisis and defrauding investors by offering overly favourable evaluations of insolvent financial institutions and approving extremely risky mortgage-related securities.

For this and other reasons, these agencies have come under the increasing grip of EU regulation, with additional regulation newly implemented and further scrutiny on the cards, as the rules bite.

It may, therefore, not be entirely a coincidence that Standard & Poor's has lowered the outlook for Britain's triple-A rating to negative from stable, saying that it risked a downgrade because of David Cameron's decision to hold an EU referendum.

The vote, says the agency, "represents a risk to growth prospects for the UK's financial services and export sectors, as well as the wider economy". And if Britain looked likely to leave the EU, it could cut Britain's rating by more than one notch, while sterling risked losing its status as a global reserve currency.

As well as hurting Britain's economy, leaving the EU would damage Britain's ability to finance its large stock of public debt and its current account deficit, S&P said. "The UK government's decision to hold a referendum … indicates that economic policy-making could be at risk of being more exposed to party politics than we had previously anticipated", the agency added.

From any dispassionate view, however, this is an unduly pessimistic assessment. With the referendum unlikely to be held for another two years, and probably at least three years before the UK would be near quitting – just supposing the "no" campaign succeeded – there is plenty of time to take the economic temperature, on the basis or real evidence.

This move, therefore, has the hallmark of a politically-motivated intervention and, with the power the EU holds over the credit rating agencies, it doesn't take much to guess why. The craven servant is bowing to its master.

And so the FUD goes on and on. There is no relief in hand, and much more to come. But that is all it is: fear, uncertainty and doubt. The purveyors of fear have no reasoned case, so they turn to the only thing they have. But that weakness shows how strong we really are.

Richard North 13/06/2015 link

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