EU Referendum: Swiss "model" bites the dust

29/05/2015  

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As neat a demolition of the so-called Swiss "model" as you are going to get comes from Graham Avery over on the Europhile British Influence website.

Switzerland's bumpy ride with the EU began in 1992, when its people voted against the European Economic Area, Avery writes. Unlike other EFTA countries, it followed a "bilateral" path, negotiating a series of agreements with the EU, sector by sector, so that it obtained access to the European market by accepting the corresponding EU rules.

Under these agreements, much of EU law now applies to Switzerland. But unlike the EEA, says Avery (not altogether accurately) "which makes EU rules automatically applicable to Norway, Iceland and Liechtenstein", the Swiss model requires fresh negotiations every time that EU policies change.

This situation, Avery claims, has proved frustrating for Swiss business, which has no certainty of access to the EU. But he is correct in saying that it has irritated the EU - to such an extent that last year the EU (including Britain) resolved to make no more agreements with Switzerland unless it accepts a "new institutional approach". This means that the Swiss model must become more like the EEA.

On top of this, Avery continues:
… came last year's referendum on "mass immigration" in which the Swiss people by a small majority (50.3%) instructed their government to impose quotas on workers from the EU. If that is implemented – as it must be by February 2017 – a crisis is inevitable. It contravenes the bilateral agreement on free movement of workers, and if that falls, the other agreements giving Switzerland access to European markets automatically fall.

Faced with this prospect, opinion in Switzerland is deeply divided. Some argue that the bilateral agreements must be preserved. Others say that the country should move forward and join the EU, or at least the EEA. Others are in favour of pulling back from the EU altogether. Signatures are being collected for a referendum to cancel the earlier referendum.

Meanwhile, the Swiss government is playing for time, with national elections due in October, and no compulsion to act until February 2017. Uncertainty about access to the EU is troubling for Swiss business, which fears an economic slowdown. Most commentators agree that relations with the EU have reached an impasse. "The whole relationship between Switzerland and the EU is now in complete uncertainty", says Professor René Schwok of Geneva University.
In response, it would not be right for me to say that I could write something very similar. I have already written something very similar – in Flexcit, posted well over a year ago.

Essentially, there is no merit in the so-called Swiss "model" as an alternative to UK membership of the EU. It was never really a conscious "model" as such - more of a ramshackle series of arrangements, cobbled together by the Swiss Government after the people rejected membership of the EEA in their 1992 referendum.

And now, with the rejection of the "free movement" provisions, EU-Swiss relations are in crisis, with a deadline for resolution in February 2017. And that timeline puts Switzerland in the frame during the run-up to our own referendum, when the stresses and failings of the model will be high profile.

Yet this failing "bilateral" model is precisely what is being championed by the likes of Daniel Hannan, and formed the basis of all six winning entries for the shambolic IEA "Brexit" competition, judged by the Lord Lawson who understood the concept about as well as he did once the ERM.

This leaves a huge hole in the "eurosceptic" armoury, where many of the campaigners still fail to understand the importance of having a credible exit plan, based on a sound alternative to EU membership.

The Europhiles of British Influence have so far have shown themselves not to be the sharpest knives in the draw, and if they can rip to shreds the Hannan-preferred model already, they will have a field day when the EU insists that Switzerland adopts something closer to the EEA – the very option that the Hannanites have turned their back on.

What we will find though is that, as the EEA option is further strengthened, the options set out in Felxcit will come into their own – which is hardly surprising as so many people have contributed to its development.

That at least is some comfort for, as one corner of the "eurosceptic" argument collapses, there will be a rock of stability that can hold the campaign together. British Influence will not find any easy pickings there. We will eat them alive.



Richard North 29/05/2015 link

Booker: united to keep us in the EU

24/05/2015  

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In this week's column, Booker picks up on CBI president Mike Rake, and this thoroughly disreputable bank, Barclays, the very firm of which Rake is deputy chairman. It is, is facing a record-breaking fine of £1.5 billion for its fiddling of exchange rates, yet Rake feels he is entitled to tell us how we should be governed.

Booker notes that the CBI and the BBC have been shamelessly in cahoots over their support for Britain's membership of the EU ever since the days when they were propagandising together for Britain to join the euro.

Almost daily they told us how, unless we joined the single currency, we were doomed. Foreign firms would pull out of Britain en masse. And of course they are both playing exactly the same game today, as David Cameron launches his campaign to negotiate for Britain a "new relationship" with the EU.

The one thing the Europhiles are absolutely desperate to keep out of the debate is the possibility that, even if we did leave the EU, we could continue trading with the single market just as we do now by remaining within the European Economic Area (as was superbly illustrated by the way Jim Naughtie impatiently tried to stop Owen Paterson making precisely this point yesterday morning).

The only argument we ever hear is that, if we left the EU, our trade with Europe would collapse: much as we shall hear from Mr Cameron when he returns from his "negotiations" with no more than a few little fig-leaves, to persuade us all to vote "yes" for staying in.

One considerable danger, however, is that the dressing-up of these "fig-leaves" will be so intense that a gullible media will fall for it, and present the Cameron deal as if it was something substantial, just like the treaty that he supposedly vetoed.

But the chief reason why this shabbily deceitful argument is being allowed to dominate the debate, says Booker, is the Eurosceptics' inability to unite in explaining that there is only one possible route whereby the EU can be made to give Britain that "new relationship" Mr Cameron talks of.

Certainly, the likes of Rake are making a big thing about us not having a "credible alternative future to EU membership", only to have Ruth Lea pop up with her utterly mad idea that the post-exit UK could rely on WTO rules, by which – she says - many countries, "including China, very successfully conduct much of their trade".

I wouldn't mind so much if this arrogant woman took the time out to keep herself informed but, as we pointed out, China has a substantial number of agreements with the EU, which transcend WTO rules and are vital for the conduct of trade. Not least is the raft of Mutual Recognition Agreements on conformity assessment, without which the flow of goods would be seriously hampered.

Fortunately – for the moment – many of the "inners" seem as ignorant as to the realities of international trade as is Ruth Lea, but if any of them had to wit to call her out, Mike Rake's claim about the absence of a "credible alternative future to EU membership" would certainly stand if all we had to rely on was this woman's dogma.

For us, though, this is a real problem, where our supposed allies are all over the place, doing – as Autonomous Mind asserts, more harm than good. Nevertheless, Booker wants Cameron to do the one thing he says he cannot agree to: by using Article 50 of the treaty to say that we wish to join Norway and others outside the EU, but still in the Single Market.

Booker also asserts that his bluff is finally being called, although that is not always the case. What we are getting is the likes of Prof Mark Taylor, of Warwick University Business School – who was on the Today programme yesterday, just before Owen Paterson. He told us: "We would be worse off outside the EU because we wouldn't have access to the Single Market".

This, bluntly, is an outright lie, but then Taylor probably feels he has to protect his income stream. In 2013, Warwick University took €7,462,052 in EU funding (and a share in a further €54,330,432-worth of projects, amounting to €8,030,622). Thus, in that one year (the latest figures available), their coffers were swollen by over €15 million from the EU.

However, money-grubbing euroids are only part of the problem. With Ruth Lea and many others who regard themselves as the Eurosceptic "aristocracy", strutting their stuff, we stand at risk of remaining firmly shackled to all the superstructure of this failing political project.

As we point out elsewhere, those who are serious about winning this referendum are having to fight on three fronts. We have to deal with the underhanded lies of the pro-EU camp and also the brain-capsizing ineptitude of the Ukip. But there is also the selfish, self-absorbed right-wing think tank "aristocracy" who are neither use nor ornament.

We can only win if the anti-EU movement ups its game and starts doing its homework. But there is also the danger of the campaign being hijacked by Westminster careerist campaigners who get paid either way. Against that, we will have our "credible alternative future to EU membership", but it is pointless doing all that work if it is lost in the noise created by our own side.



Richard North 24/05/2015 link

EU referendum: Guardian peddling lies

14/05/2015  

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The Guardian is peddling lies - transparent and unequivocal. Its narrative is one of disaster for the academic community. Even the possibility that we'll vote to leave the EU would be a disaster for British science. The EU, it says, directly pays for much UK research and innovation, the paper tells us, and if we leave the EU we lose all that money (which we put in, in the first place).

Not to be swayed by tiny details such as these, the paper asserts that: "Given our public sector funding difficulties, and the understandably low priority research has in the political arena, we simply cannot afford to lose out on such a successful and empowering pot of EU money".

"Scientists love evidence, and the evidence is clear", the paper then asserts - thereby ignoring the evidence to the contrary. "Bluntly, if the UK were to leave the EU, we would massively and irreversibly damage an enterprise on which our future depends", it claims.

And so the inference goes that, if we leave the EU, the EU research funds dry up. But this is a lie - and totally contrary to the evidence. There is no requirement for a country to be a member of the EU for it to be part of its research programme. For heaven's sake, even Israel is part of the programme.

Those of you who have read Flexcit, will have picked up details on the Seventh Framework Programme and EEA members. It tells you that more than 2,350 Icelandic and Norwegian participants, including many small and medium-sized enterprises (SMEs), were involved. Icelandic researchers contributed to 217 projects, receiving funding of nearly €70 million. The Norwegians took part in more than 1,400 projects, receiving €712 million.

If the UK leaves the EU and rejoins the EEA, it can continue participation in the research programme (currently Horizon 2020) without interruption. Even without EEA membership, it can participate – as does Switzerland. The Guardian is telling lies, indulging in outrageous FUD.

But this calumny goes beyond the Guardian and extends to a campaign website called Scientists for EU, where these propagandists can spread their lies.

This brings me to the broader issue that this piece illustrates. Talking yesterday to a senior politician, he observed that the "out" campaign should already have a rapid rebuttal unit up and running, to deal with this sort of thing. To my mind, it is an indictment of Ukip, which should already be equipped to handle false claims.

Perhaps that's the sort of thing that Carswell's short money could handle, but for the fact that it would doubtless be wasted.

It is this sort of thing, though, that leads me to believe that we will lose the referendum. I don't see that we have any real chance of winning - for many different reasons, but all boiling down to the fact that the "eurosceptic" movement is too fragmented, has no coherent vision and – with particular relevance here - has left preparations too late. The Norway "no" campaign had five years to prepare for their 1994 victory.

I think the best (and only) thing we can achieve is damage limitation - doing what we can to avoid losing too badly. If the gap is narrow, then at least we can claim some legitimacy in continuing the fight.

There should also, in my view, be a secondary objective. We should use the campaign to build a standing, non-party-political organisation on the lines of the Norwegian "no" campaign, better to equip us to fight a "treaty lock" referendum should it come.

That would be our real opportunity to force EU withdrawal. In the interim, though, we need to claw back the anti-EU movement from Ukip, and to organise it on a non-partisan basis, ready and capable to deal with the sort of lies the Guardian is trotting out.

That, maybe, is for the future, but what is so disturbing is that a newspaper can so easily trot out lies, without feeling any need to check the veracity of what it is saying. And if this illustrates how the referendum campaign is going to go, we're in for a long, hard couple of years.



Richard North 14/05/2015 link

EU Referendum: a stronger hand than appears

11/05/2015  

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Boiling Frog
has revamped his site, and added a new post further discussing the possibility of a Wilsonian fudge following the Cameron negotiations.

This is precisely the sort of thinking and analysis that we need if we are going to prevail, as we know well that the odds are stacked against us if Mr Cameron comes back from Brussels bringing what he claims is a successful deal.

And we should be under no illusions that the newly returned Prime Minister is fighting to win, apparently having paved the way somewhat with his EU counterparts. And the insidious propaganda also continues, as from the likes of The Guardian in the piece linked, which cannot resist having a dig at the "Norway option".

Norway is held up as the alternative model [to the EU], it says, "standing outside the single market and its decision-making bodies, but forced to comply with the rules". Never mind that within the EEA, we are in the Single Market. The newspaper goes on to assert: "For one of the world's largest trading nations to go down this route would be bizarre. The UK needs to help set the terms of trade, even when the bargain is tough".

Thus is the straw man erected, a classic example of how the exit scenario is belittled and misrepresented. We are going to get a lot of this, and only by joining forces to present a common theme will we have enough power and reach to overcome the distortions.

Another handicap we're going to have to overcome are some of the "Tory right" MPs, who really do not seem to have their act together.

Enter John Redwood, who has conceded that "a treaty change was not on the cards" – even though it is – but then demands the repatriation of banking regulation, oversight of member states' annual budgets and the need to "regain control of our borders", the latter requiring the treaty that Redwood concedes is not on the cards.

Redwood and his supporters are, quite obviously, spoiling for the fight, but they are hardly focusing on what it takes to win it. There is no principled stand here, no grand vision and no plan - just squabbling over the detail.

That leaves Mr Cameron well-place to outflank the opposition, appointing George Osborne as his lead negotiator, planning on bringing back just enough concessions to make the renegotiations look plausible.

With Jean-Claude Juncker telling Mr Cameron, "I stand ready to work with you to strike a fair deal for the United Kingdom in the EU", the stage is set fair for a theatrical gesture that will easily neutralise Mr Redwood's concerns.

Sooner or later, though, he must declare his hand to the "colleagues", as indeed he is being called upon to do, and then it will be our turn to dissect what will be a thin case, lacking entirely in substance.  

And even then, we may het help from unexpected quarters. "There is a limit to how far we are willing to go — and we're on the UK side. We're not looking for treaty change", says a senior EU official. "But", he continues, "the reforms we back will be for Britain, not a favour to the leader of a party trying manage his rebels. He must be careful, he can't let emotion get the better of him and ask for too much because the continent is fed up".

Another thing we have going for us is that we seem to have a better grasp of Mr Cameron's range of tactics, than even the great Wolfgang Münchau, who labours under the impression that treaty change "can obviously not happen under Mr Cameron's timetable".

It is quite entertaining to discover how such ignorance pervades even the pro-EU camp, with Münchau failing to realise that the "simplified procedure" under Article 48 is an option.

The blind lead the blind on both sides, it seems – which is hardly a surprise to us. As the the usual suspects pontificate, their narrow perspectives and failure to grasp the issues fortify their ignorance, leading them to offer flawed conclusions.

By contrast, we have more and better cards in our hand than might at first appear, and the knowledge and skills to use them wisely.



Richard North 11/05/2015 link

Flexcit: the first edition

28/04/2015  

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The Guardian and others are parading a report from the German think tank Bertelsmann Stiftung which claims that leaving the EU could knock 14 percent, or £215 billion, off the UK economy. The report runs to a mere seven pages, and to describe it as "thin" would be a compliment, with no evidence of any serious working-out.

It is based on three scenarios, the "most favourable" having the UK receiving "a status similar to that of Switzerland or Norway". And even at that point, it falls apart. There is no direct equivalence between these two positions. Anyone who affords them the same status cannot be taken seriously.

But then, Bertelsmann presents the "second most favourable scenario". This is one where there is no trade agreement with the EU, resulting in higher non-tariff barriers as well as to tariffs between the UK and EU. That paves the way for the "least favourable scenario" (which it calls "isolation of the UK"), where we "lose all privileges arising from the EU's 38 existing trade agreements".

Although the think tank concedes that the UK can reach new trade agreements through independent negotiations, it argues that experience has shown this to be a lengthy process. Moreover, it adds, the UK's negotiating power would be less than that of the EU.

What this then does is open up a sordid little squabble between Matthew Elliott, he of Business for Britain, and Peter Wilding of British Influence. Elliott on the one hand argues that the report imagines a world "where every negative and false assumption held by those in favour of remaining in the EU at-all-costs is true, and then gives this absurd doomsday scenario a cost in terms of GDP".

Wilding, on the other hand, asserts that the Bertelsmann report is "another nail in the coffin for the Brexit vandals", claiming: "It is now obvious that leaving would be an act of national self-harm". He goes on to say: "If people want Britain to lose influence in the world, lose jobs at home and lose trade abroad then isolation is the answer".

This sterile spat, though, does nothing more than emphasise the absence of agreed exit plan, leaving the opposition free to invent whatever they want. Elliott, of course, is impotent. Having locked himself into the renegotiation meme, he is unable to offer anything sensible of his own – even if he was capable of producing it.

However, things are about to change. This week sees the completion of the first edition of Flexcit, now running to 411 pages and 20 chapters, including much of the recent work on this blog and Boiling Frog's studies on telecoms. Now we do have a plan.

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As before, the publication is online can be freely downloaded from the link in the preceding paragraph, or from the menu at the top – where it will remain accessible.

The plan itself has stabilised on six stages, opening with the "Norway option" and other facets, in what might be called the "EEA-plus" option. Stage two deals with immigration and asylum, three addresses the need to create a genuine European Single Market, four looks at new policies for an independent UK, five sets out the global trading policy and stage six pursues ideas for domestic reform.

This is far more advanced than anything so far on the table and, contrary to the naysayers, is intended to deliver an economically neutral withdrawal. It will not add cost, but nor in the short-term, will there be any significant savings. In the longer term, the potential benefits are huge, but the initial reason for leaving is not economic. We leave because we want no part of a political union with the rest of the EU Member States.

With the first edition now complete (barring corrections), we are having what amounts to a launch at a private seminar in London on Wednesday. We'll build on it from there, rolling it out to a wider circle before we will commit to a public launch – the timing of which will depend on whether we are to get a referendum in 2017.

In the interim, I'll be working with the Robert Oulds of the Bruges Group to get Flexcit published as a book, and we'll keep you appraised of progress. But never let it be said now that there isn't a comprehensive exit plan. There is.



Richard North 28/04/2015 link

Media: lacking the intellectual architecture

26/04/2015  

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In my previous post, I pointed out that journalists lacked the intellectual architecture to understand the EU, and thus report it properly. Right on cue, in the Daily Telegraph, we get a graphic example of this from Sarah Knapton, science editor, and Richard Orange.

They offer a bizarre story which claims that British organic farmers "are being forced to treat their livestock with homeopathic remedies under new European Commission rules branded 'scientifically illiterate' by vets", with the journalist duo telling us that: "The directive states that: 'it is a general requirement…for production of all organic livestock that (herbal) and homeopathic products… shall be used in preference to chemically-synthesised allopathic veterinary treatment or antibiotics'".

This is classic "Red Tape Folly" stuff, the like of which Booker and I used to be writing for the Telegraph and the Mail more twenty years ago – with the added proviso that we used to check the facts before committing ourselves to print.

Knapton and Orange, however, have got themselves into a little bit of difficulty with this story: the "directive" doesn't actually exist. They tell us that it came into force on 1 January 2015, but it didn't. It really does not exist. There reference to it is a complete invention.

As it stands, the production of organic food – including the treatment of livestock – is controlled by Council Regulation (EC) No 834/2007 of 28 June 2007, on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91.

This is pointed out on the Commission website, and even then the regulation does not state what the article claims it to say. What it does say is this:
[D]isease shall be treated immediately to avoid suffering to the animal; chemically synthesised allopathic veterinary medicinal products including antibiotics may be used where necessary and under strict conditions, when the use of phytotherapeutic, homeopathic and other products is inappropriate.
This, of course, is very far from requiring homeopathy. In fact, it permits the use of conventional therapy, something which many local rules do not.

To get anywhere near the quote used by the Telegraph, you have to go to the 1991 Regulations (repeated in the 1999 supplement). In the 1991 Regulation, 5.4, we see:
The use of veterinary medicinal products in organic farming shall comply with the following principles:

(a) Phytotherapeutic (e.g. plant extracts (excluding antibiotics), essences, etc.), homeopathic products (e.g. plant, animal or mineral substances) and trace elements and products listed in Part C, section 3 of Annex II, shall be used in preference to chemically-synthesised allopathic veterinary medicinal products or antibiotics, provided that their therapeutic effect is effective for the species of animal, and the condition for which the treatment is intended;

(b) If the use of the above products should not prove, or is unlikely to be, effective in combating illness or injury, and treatment is essential to avoid suffering or distress to the animal, chemically-synthesised allopathic veterinary medicinal products or antibiotics may be used under the responsibility of a veterinarian …
Once again, this does not force farmers to use homeopathic medicines. Merely, it lists (in Annex II) the products that should be used provided that their therapeutic effect is effective, and then goes on to say that, if they do not prove, or are unlikely to be, effective in combating illness or injury, conventional medicines may be used.

Only by taking the first part, out of context, can it be argued that there is any compulsion to use homeopathic medicines. And, if that was not bad enough, the 1991 regulations are no longer in force, having been replaced by the 2007 version.

With these Regulations, the 1999 supplement falls, to be replaced with Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Council Regulation (EC) No 834/2007 on organic production and labelling of organic products with regard to organic production, labelling and control. The relevant part is Article 24 on "Veterinary treatment", which states:
1. Where despite preventive measures to ensure animal health as laid down in Article 14(1)(e)(i) of Regulation (EC) No 834/ 2007 animals become sick or injured they shall be treated immediately, if necessary in isolation and in suitable housing.

2. Phytotherapeutic, homoepathic products, trace elements and products listed in Annex V, part 3 and in Annex VI, part 1.1. shall be used in preference to chemically-synthesized allopathic veterinary treatment or antibiotics, provided that their therapeutic effect is effective for the species of animal, and the condition for which the treatment is intended.

3. If the use of measures referred to in paragraph 1 and 2 is not effective in combating illness or injury, and if treatment is essential to avoid suffering or distress of the animal, chemically synthesised allopathic veterinary medicinal products or antibiotics may be used under the responsibility of a veterinarian.
Seen in the context of national rules which often prohibit conventional treatment, the (intended) effect of this regulation is to permit treatment using normal veterinary medicines. Far from requiring homeopathic treatment, it actually provides the farmer with the legal justification for reverting to more effective treatment.

Of further interest here, on 24 March last year, the Commission issued COM(2014) 180 final, with Appendices, proposing a new regulation on organic production. Here, the relevant passage says:
disease shall be treated immediately to avoid suffering to the animal; chemically synthesised allopathic veterinary medicinal products including antibiotics may be used where necessary, under strict conditions and under the responsibility of a veterinarian, when the use of phytotherapeutic, homeopathic and other products is inappropriate.
While the progress of this is stalled, it does demonstrate that, not only does the EU not require organic farmers to use homeopathic treatment, it has no intention of so doing.

The question thus arises as to why two Telegraph journalists have got it so spectacularly wrong. A clue may lie in the Mail on Sunday which last week did a story about the application of the EU organic aquaculture regulations to Norway, a story run the previous day in Dagbladet and in the Norwegian edition of The Local.

The Norwegian story itself is flawed. Apart from the fact that Norway has conformed with EU standards since the 1991 Regulations, the paper is turning a permissory provision into a mandatory requirement. All the regulations do is allow specified homeopathic treatments to be tried, prior to conventional treatment.

This narrative in no way supports the Telegraph story, although it has been copied out by The Express and now in The Sun as well, in classic examples of media coprophagia.

The real explanation for the Telegraph's fiction most likely lies in the very simple premise is that it met the journalists' expectations of what an EU story should look like. It reinforced their prejudices and kept them within their comfort zone. In effect, they believed it because they wanted to, and then sold it to their gullible readers.

And therein lies the ultimate irony. Not a few readers have swallowed the story whole, without the slightest trace of scepticism. Thus says "paulw": "Just another example of the lunatic prescriptive dictates written for and imposed upon the people of the UK by the unelected Brussels mafia. The only way to have all the laws written by the people of this country and for the people of this country is to elect the people's party Ukip".

They believe what they want to believe, but when it comes to trying to understand how the world really works, they're out to lunch.



Richard North 26/04/2015 link

EU exit: a comfortable place to be

21/04/2015  

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For Eurosceptics, we are told, things look grim. To turn City and wider public opinion around, they will have to paint a much more attractive vision of what life outside the EU will look like and convince people that the road from here to there is a lot less terrifying than it appears at present.

Actually, we have been doing this for some time - except that newspapers such as the Telegraph aren't listening, and they wouldn't understand what they were told, even if they did pay attention. For instance, on the issue of the "Norway Option" and the loss of influence the UK would supposedly suffer, journalists generally are not even past first base. Most have totally bought into the "fax democracy" meme, or versions of it, without beginning to get to grips with the complexity of the issues.

As an indication of how far behind they are, we've been looking at this whole issue of influence over the formulation of new regulation, and what things will look like when we withdraw from the EU. And they look a lot less terrifying than appear to the ignorati

What is fascinating about this is the way the regulatory environment has changed from where it was when the EEC was first launched. The changes are huge, and work greatly to our advantage – in ways that the average journalist could not even begin to imagine.

At the heart of the changes is the United Nations Economic Commission, Europe (UNECE). It has been making the weather, developing a new "International Model" of regulation, working through its WP.6 Working Party on Regulatory Cooperation and Standardisation Policies. And this is having a startling impact.

WP.6 calls itself "a forum for dialogue among regulators and policy makers", where a wide range of issues is discussed, including technical regulations, standardisation, conformity assessment, metrology, market surveillance and risk management. 

It makes recommendations that promote regulatory policies to protect the health and safety of consumers and workers, and preserve our natural environment, without creating unnecessary barriers to trade and investment. And while their recommendations are non-binding, they are widely implemented in UNECE member states and beyond. 

But WP.6 has also done pioneering work on international legislation. Initially in relation to the telecoms industry, it has developed a new way of making regulation, based on this "International Model". It in turn relies on the WTO Agreement on Technical Barriers to Trade (TBT), and creates a framework for the practical implementation of technical harmonisation at a global level.

In so doing, it also draws from existing schemes for good regulatory practice (GRP), which is a development in its own right. Catalogued by the WTO, GRP sets out the formal mechanisms for implementing the Agreement on TBT. The organisations involved in constructing it include APEC, ASEAN, OECD, UNECE and the World Bank.

But tied into this, the WP.6 "International Model" provides a set of voluntary principles and procedures for application to sectors such as telecoms, for countries that wish to harmonise their technical regulations.

It is acknowledged that some international technical regulations exist, but they tend to be cumbersome and burdened with details. They have proven to be difficult to prepare and, as a consequence, can be difficult to amend once in place. Furthermore, detailed agreements between a large number of regulatory authorities are frequently difficult to obtain, and such regulations tend not to achieve full consensus.

Under the aegis of UNECE, therefore, interested countries are brought together to discuss and agree a regulatory framework comprising what are called "common regulatory objectives" (CROs).

These CROs are at the heart of the new system. They are easier to compile and it is easier to find consensus when agreement is sought. But, to give them teeth, they are linked to international standardising bodies, which provide a forum for all interested parties (including regulatory authorities), and have established a degree of trust at the international level.

On a procedural level, where there is a need for regulatory convergence, the "Model" does not start with existing national technical regulations. Instead, the parties work from basic principles, discussing and agreeing on which safety, environmental or other legitimate requirements should be met by a technical regulation.

The "agreed and concrete legitimate concerns" then become the common regulatory objective, following which countries agree on the existing international standards that could provide for technical implementation or, where necessary, the elaboration of new international standards. The degree to which there is reliance on international standards can be seen by the CRO on GSM.

Whenever a new or revised technical regulation is being prepared, regulators follow the principles found in the WTO/TBT Agreement. In this, the regulations have to be based on the relevant international standards.

As an example, a wide range of telecom standards have now been agreed, covering personal computers (PCs); PC peripherals, legacy Public Switched Telephone Network (PSTN) terminals; Bluetooth, Wireless Local Area Network (WLAN); Global Standard for Mobile Telecommunication (GSM); and International Mobile Telecommunications.

Further sectoral initiatives have been concluded on earth-moving machinery, equipment for explosive environments and pipeline safety. And there will be many more.

To an extent, though, there is nothing new about this system – it reverts to the original harmonising process used by the European Union, where directives were issued which set out the regulatory objectives, leaving the details of implementation to the Member States.

In this context, the process has moved up from the sub-regional EU to global level, co-ordinated by UNECE and other regional and world bodies. This is the new reality, where the EU is simply a bit player on a larger stage – but one on what all the players are equal, with the UK having the same power as all the other players.

The beauty is that this is achieved without even a hint of QMV, allowing the UK to sit at the top table and decide on the regulation which will continue to define the Single Market. Gradually, the EU is being eased out of the process of originating such legislation, making the outside world a very comfortable place to be.

In a million years time, there might be journalists capable of understanding this, but we would be unwise to rely on them. We're going to have to spread the news ourselves.



Richard North 21/04/2015 link

Ukip manifesto: a new standard for gold standards

16/04/2015  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



Richard North 16/04/2015 link

Flexcit: the final frontier

14/04/2015  

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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



Richard North 14/04/2015 link

Fishing policy: dog whistles don't cut it

10/04/2015  

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It says something of his lack of attention to detail that Farage should have gone to Grimsby to launch his party's fishing policy, with his claim recorded by the BBC that, "When Britain leaves the European Union, Grimsby will once again be a great fishing port".

The inference, borne out by the party's new poster (on its website), is that the EU's Common Fisheries Policy (CFP) has been responsible for the demise of the fishing industry in Grimsby.

The reality, though, is completely at odds with this. The port was not a victim of the CFP. In the 1960s, it was home to the distant water fleet, with over 600 trawlers registered. What did for them were the Cod Wars, when Iceland extended its economic zone to 200 miles, excluding British vessels from their traditional fishing grounds.

Since then, however, Grimsby has reinvented itself as a major processing centre for imported fish, mainly – and ironically – from Iceland, but also from Norway and the Faroes, not least with the assistance of grants from European Fisheries Fund.

Norway is no model for Grimsby. The greatest threat to its trade is not the EU, but cheap air cargo. This permits frozen whole fish to be shipped out to low-cost centres in China for processing, and then air-freighted back to Europe and elsewhere. The situation is such that two thirds of seafood traded internationally is shipped by air.

That apart, Mr Farage is quick to extol the virtues of Iceland and Norway which, he tells us, are not in the EU. But, typically of the man, he is light on detail when it comes to a replacement fisheries policy. All we get from the man is that, "a system similar to that operating in Norway could revitalise Britain's fishing industry". UKIP's policy on fishing, he says, includes preserving UK territorial waters within the "12-mile limit" around the coast for British fishermen, and creating a 200-mile Exclusive Economic Zone under UK control.

As it stands, of course, we do retain our 12-mile limit. We also have our 200-mile EEZ, but bringing it back "under UK control" does not a policy make. We need to know precisely what controls would be applied, and how, before we are close to being able to judge whether the Ukip fishing policy is worth having.

For that, Ukip could have done no better than go to Owen Paterson's Green Paper which, interestingly, is precisely what the government's own review of EU competences did (see reference on page 75) – much to the chagrin of the House of Lords Select Committee.

Interestingly, when we came to look at Norway's fishing policy, it is not one which we thought particularly attractive, nor – for a variety of complex reasons – one which is applicable to the UK. Not least, it relies on the TAC system which is at the heart of the CFP, and which has caused so much damage to British fisheries.

Rather than continue this system, we went for aspects of the Icelandic policy, which seemed to us better developed. We also took lessons from the Faeroes, from the management of the Falklands squid fishery, and some of the ideas on governance from the eastern seaboard of the United States.

The resultant policy document – outlining the main issues for consultation - ran to 33 pages and one might have thought that Ukip, with its access to the wealth thrown at it by the EU, might run to something of similar or greater length by way of a policy document. Instead, all we get is thirteen "bullet points", which are fine as dog-whistle aspirations but, even in their totality, do not a policy make.

For instance, we are told that Ukip will end "quotas which cause unnecessary discards – and the new 'discard ban' which will distort the market and harm the environment". We are also told that there will be, "'land what you catch' and self-management with regional control". But there is no clue as to what systems the party would chose to control fishing effort, and how they would be enforced.

Yet, in British waters at least, the equitable (and effective) control of fishing effort has to be at the heart of any fisheries management policy. That Ukip does not even refer to this issue says a great deal. Their authors clearly do not have the first understanding of the subject, or any idea of what it takes to construct a coherent policy. 

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Furthermore, Ukip are not even in the real world when they claim they will stop foreign vessels claiming "historic rights" to fish our inshore waters. Noticeably, they refer to inshore waters, but the doctrine of "acquired rights" suggests that, even after we leave the EU, we will not be able fully to exclude EU member state fishing vessels from any of our waters.

As we write in Flexcit, some of these rights pre-date the CFP and some stretch back as far as the Middle Ages. Consolidated under the current CFP regime, they would have to be honoured, unless some could be waived (or bought out) as part of the Art 50 negotiation process. Without that, there could be no question of excluding foreign vessels, unless in strict accordance with international (and domestic) law.

Confirming that it simply doesn't "do" policy, though, Ukip has just sent to its members a 28-page pamphlet, funded by the EU and written by MEP Ray Finch. Despite the expense, this is just another rehash of the evils of the CFP. The closest we get to policy is the view that, "Outside the EU, the UK can run its own fisheries with a sensible conservation strategy which will avoid the Tragedy of the Commons in our waters at least and thus ensure that there is enough fish for future generations".

With more than a little prescience, therefore, we see the new Ukip poster boy, Tony Rutherford, uncertain as to where he is going to place his vote. Asked who he will be voting for in May, Rutherford paused, before replying: "I don't know. I've got MPs from all angles fighting for the industry", he said. "It's a very awkward question for myself because they're all doing so much for us. It isn't just Ukip that realises it's serious, everyone does. It's just Ukip that seems to do the shouting about it".

Sadly, "shouting" is all they are doing. Yet the BBC seems to think that this reference represents a fisheries policy, while it actually devotes more space to a discussion on Farage's Arthur Daley overcoat. This is the other face of the problem. The media is hopeless when it comes to analysing Ukip's policy failures. It's left to Greenpeace to do a number, with its own website pointing out Ukip's lack of engagement on fishing issues in the European Parliament.

That, in fact, is the real story. Mr Farage has been an MEP since 1999 – some fifteen years. He has had all the time he needs to come up with a fishing policy. Yet all he can manage, at the height of an election campaign, is a short introduction to the Ukip pamphlet that is about as policy-free as it can get, and 13 dog-whistle bullet points.

And that's one of the reasons why Ukip is tanking in the polls.



Richard North 10/04/2015 link

Blair: Europe - "a very good reason to vote Labour"

08/04/2015  

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Legacy media reporting of Blair's speech yesterday is all over the place, but then over 3,000 words is a little bit difficult to summarise, so this is hardly surprising. Sound bites are more the media's style.

Unfortunately, however, Tony Blair's speech at the Xcel Centre in Newton Aycliffe has some substance, and some good clues on how the coming fight over the EU might be played out - so we need to look at it in a little more detail. 

For starters, the former prime minister offers a commentary that, turned around, we could use to our own advantage. He tells us:
Elections should never simply be about an exchange of rhetoric, the laying out of policy positions or the cacophony of the campaign. They should also be an investigation and a decision about our ambitions as a nation, who we are and where we're going.

For me Europe is an important litmus test. I believe passionately that leaving Europe would leave Britain diminished in the world, do significant damage to our economy and, less obviously but just as important to our future, would go against the very qualities that mark us out still as a great global nation.

It would be a momentous decision.
By way of illustration, we could just as easily say that leaving "Europe" would enhance Britain position in the world, strengthen our economy and highlight the very qualities that mark us out still as a great global nation. I guess it's how you tell 'em. And, on this, Blair is telling us that, should the Conservatives be re-elected on May 7th, they are committed to holding a referendum to decide whether Britain remains in the European Union. Referring to the Scottish referendum, Blair raises the spectre of nationalism - "a powerful sentiment". Let that genie out of the bottle, he says, "and it is a Herculean task to put it back. Reason alone struggles".

That in itself sounds terribly profound, but perhaps someone should tell Blair that nationalism has never been healthier, and never more has the nation state prospered. In 1945, 51 states were members of the United Nations. Membership rose to 152 in 1979 and to 194 today.

But in Blair's distorted mind, the EU referendum carries the same risk of resurgent nationalism. For that reason, he says, should the Conservatives win, the prime minister will be spending more energy, will have more sleepless nights about it, be more focused on it than literally any other single issue.

Mr Cameron, Blair asserts, knows the vastness of the decision. He knows the penalty of failure. He knows exit will define his legacy. And, following the Scottish referendum, he knows the perilous fragility of public support for the sensible choice.

It is this passage which the Telegraph makes out that Blair is saying that the "public can't be trusted to make 'sensible choice' on EU".

Myself, I don't see it. "Trust" is not a word Blair used anywhere in his script. He is warning about the attraction of nationalism and the fragile support for the EU. And he is right to be worried – given the paucity of his case.

Nevertheless, Blair believes the referendum will be "a huge distraction" for the country – and for Cameron. It will take precedence over the NHS, education, law and order, the lot, even though he doesn't really believe we should leave the EU.

The referendum was a concession to Party, a manoeuvre to access some of the UKIP vote and a sop to the "rampant anti-Europe feeling" of parts of the media, Blair asserts. This issue, touching as it does the country's future is too important to be traded like this, he says, then continuing:
It is greatly to Ed Miliband's credit that he resolutely refused to make that trade. He faced down calls to follow the Tory concession from parts of the media and many inside our Party. In doing so, he showed real leadership. He showed that he would put the interests of the country first. He showed that on this, as on other issues, he is his own man, with his own convictions and determined to follow them even when they go against the tide. I respect that.
This the man, though, who joined with President Bush in invading Iraq to depose Saddam Hussein and then "forgot" to prepare plans for administering the peace. This is the same Tony Blair who – like so many Europhiles – doesn't understand the distinction between membership of the EU and participation in the Single Market.

Over half our trade is with "Europe", he says. There are millions of UK jobs dependent on access to the European markets. Not joining the euro was one thing. Leaving Europe altogether is quite another thing. He goes on to say:
There is, in my view, also a complete under-estimation of the short term pain of negotiating exit. There would be a raft of different Treaties, association agreements and partnerships to be dis-entangled and re-negotiated. There would be significant business uncertainty in the run-up to a vote but should the vote go the way of exit, then there would be the most intense period of business anxiety, reconsideration of options and instability since the war.
Then, digging himself in deeper, he says:
The Tory campaign talks of chaos should Labour win. Think of the chaos produced by the possibility never mind the reality of Britain quitting Europe. Jobs that are secure suddenly insecure; investment decisions postponed or cancelled; a pall of unpredictability hanging over the British economy. And for what? To satisfy the insistent Euro-phobia of a group who will never be satisfied.
And there, writ large, is not the prospect of chaos but the need for "Flexcit". We must have a credible exit plan on the table, one which takes account of the uncertainties and will ensure that there is no chaos. We need to put charlatans like Blair back in their boxes, neutralising the FUD and regaining the initiative.

But Blair does raise points which have to be taken seriously. He says:
There is a beguiling notion that upon Britain voting to leave, the rest of Europe would be in an amenable and friendly frame of mind in the consequent negotiation. They would have, it is said, a shared interest, in making it as amicable as possible.

Excuse me, but get real. As a result of our decision every other European Leader would be faced with big choices about the terms of Britain's relationship with Europe now as an outsider. This they would regard as a wholly unnecessary diversion from the critical domestic challenge of recovering their own economies. They will believe that Britain wants to have the benefits of the single market without the responsibilities. They will be determined to prevent that. Norway and Switzerland both are obliged, as the price of their access to Europe's market, to accede to a series of European rules even though they cannot influence their drafting. The rest of Europe will be vigorous in ensuring Britain gets no special treatment. This will be a horrible process. Don't be in any doubt about that.
Here we go again with the "no influence" meme but, that aside, Blair has a point. The EU is not going to roll over and give the UK a free pass – and we're only a third of the way into the speech.

And again, we're in no-man's land, as Blair rubbishes the very idea of a referendum – the man who offered us a referendum on the European Constitution – only to have his successor resile. But he does allow that: "We should have a referendum if we seriously believe that getting out of Europe is a national priority if our terms aren't met". If we don't, he adds, "then it is a completely unacceptable gamble with our future".

At this point, as one so often does with Blair speeches, one loses the will to live, so we bounce over the homilies about Britain's role as a "global player". We saw what happened in Iraq when Mr Blair staked his claim for that role. We need no lessons from him.

Blair claims that this current "alliance" with Europe was sought half a century ago by the then leaders of our country because "they knew that without it, Britain could not maintain its influence and its power. And of course it involves ceding or pooling some sovereignty. But it does so in order to gain sovereign power over decisions that in the reality of 21st Century geo-politics we will only exercise in concert with others".

Yet that is a gross misreading of history, again about which we need no lessons from Blair. He wants us to believe that globalisation is "blurring national boundaries and forcing integration on the world" – when, in fact, globalisation is bringing a renaissance to the very idea of a nation. The power is draining away from sub-regional cul-de-sacs such as the EU, and back towards the nation states.

But Blair, locked into his "little Europe" paradigm, wants to play with "reform". The movement for change in Europe would benefit hugely from British input and leadership. Nationalist forces in Europe – see the National Front in France – are surging everywhere, he says.

One recalls, though, the end of his tenure as British prime minister, when he had lost faith in the idea of influencing the EU. And it was very obvious at the time. Mr Blair might have a short memory – we don't.

For those who believe we can do just as well out of the EU, if not better, Blair turns the argument to Ukip, and asks whether they represent the standard bearers of an open-minded culturally tolerant Britain. "Are creativity, innovation and curiosity about what we can learn from the world their hallmarks?"

That's a clever argument: if you want to leave the EU, look who represents the "out" case, he is saying. "We know what this movement to wrench us out of Europe is based on", says Blair. "You can see it on display when Mr Farage swiftly moves the debate to immigrants".

So, if we're to take anything home from the Blair speech, it's that we need a credible exit plan, that Ukip is not a good representative for the "out" case – and there is very little else we can learn from Mr Blair.

But then Mr Blair thinks that Labour and its Leader took a "brave decision" when they decided not to yield to pressure for a referendum, but instead chose to "make the principled and intelligent case for Britain in Europe".

I've yet to hear this "principled and intelligent case" for staying in the EU – mostly, what we get is FUD, to which Mr Blair is no stranger. He wants Labour to win on the 7 May and, for Labour, under Ed's leadership, to be the Government of our country on the next day.

Should that unlikely event happen, the government of our country will be as it was the day before – in the hands of the EU and the European Commission. But if Mr Cameron wins, we at least get a referendum. That, for what it's worth, is a brave decision, and that's why I won't be taking up Mr Blair's invitation to vote Labour.



Richard North 08/04/2015 link

EU exit: weak arguments – weak opposition

07/04/2015  

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Now up on the the CER website, the Independent is running a story based on a report from the Centre for European Reform.

This tells us that a British exit from the European Union would hurt the poorest regions of the country hardest because they are more dependent on manufacturing exports – all based on the premise that UK manufactured goods would be hit by EU tariffs unless a free trade deal is agreed.

According to CER, the regions with the most to lose economically are the West Midlands and the North-east, but also hard hit would be Northern Ireland, followed by the East Midlands and West Midlands. The least affected area would be London, where the financial hit from tariffs would represent just 0.11 percent of output.

In the North-east alone, the cost is £197 million on export tariffs, mostly in the car manufacturing sector, equating to 0.43 percent of the region's output.

Such a scenario, of course, could easily be avoided by the simple expedient of adopting the "Norway Option", thereby protecting the UK's participation in the Single Market. However, the so-called "WTO Option" is precisely what is on offer from the likes of Ruth Lea, Global Britain and Ukip.

Thus we see in the North-east's Chronicle, a lamentable effort by Ukip's Jonathan Arnott, who can only assert that the idea of leaving the EU costing us trade is "nonsense", asserting that, "like Switzerland and Iceland we could develop our global trade links and create jobs".

If that is the best Ukip has to offer, keeping its spokesmen well away from any referendum campaign becomes an urgent necessity. If they can't deal with the easy issues, such as how to avoid the imposition of tariffs following our exit, then we are better off without their "help".

At this stage, the anti-EU "movement" should have its arguments in place, and not be struggling to find answers to the simplest of CER propaganda. The "tariff" meme should be dead and buried, so much so that the Europhiles don't even dare raise it.

Instead, we get CER's John Springford burbling that: "Many eurosceptics claim that it would be easy to sign a free trade agreement with the EU, to stop tariffs being applied to British goods".

"In fact", he says, "the EU would have the upper hand in trade negotiations. The EU buys 45 percent of Britain's exports, while the UK only buys seven percent of the EU's, so the EU would be able to dictate terms".

Then we get the old saws: "Any free trade agreement would require Britain to accept the free movement of workers and most of the EU's rules – just as Switzerland must. Politically, this would be worse than EU membership, since Britain would not be able to limit immigration and would have even less control over EU regulations".

There's only one thing worse than such weak arguments, and that's a weaker opposition that can't deal with them.



Richard North 07/04/2015 link

Immigration: a series of marginal gains

04/04/2015  

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With almost a triumphal flourish in yesterday's debate, we saw Nigel Farage declare that, "There's nothing we can do" about immigration, as long as we remain in the EU.

Yet, while seductively attractive to the weak-minded, the dishonesty of this position has been rehearsed at length on this blog, and in more detail in Flexcit. But not only are there a plenty of things that can be done, in or out of the EU, the implied solution – leaving the EU – is not even a remedy.

The game Farage is playing, of course, is to use immigration as a stick with which to beat the EU, thereby - ostensibly – strengthening the case for leaving. But he is careful to not to reveal that the bulk of immigration comes from outside the EU.

Nor would leaving the EU, per se, stop the flow of incomers from the other 27 member states. Licit movement would simply be replaced by irregular migration, which would be fiendishly difficult to stop.

Why this matters so much to genuine EU "outers", though, is that the almost irrational emphasis on immigration leads Farage and his acolytes to reject the best chance for a "quick and dirty" exit, adopting the "Norway Option". This, with its participation in the EEA Agreement, requires freedom of movement, which is seen as no advance on full EU membership.

In fact, there are significant differences between EU and EEA membership. While freedom of movement in the former requires admission of all comers from EU member states, the EEA freedom is actually limited to free movement of workers. There are no rights for dependents, families or non-economically active persons.

This, incidentally, makes the EEA Agreement far more desirable than the so-called Swiss Option – often touted as an alternative. Under the 1999 Agreement free movement of people, the text of which provides for rights of residence "for persons not pursuing an economic activity" and for "members of the family, irrespective of their nationality" (Articles 6 & 7).

The exclusion of dependents would, in itself, reduce much of the burden on public services, perhaps attenuating the primary school crisis about which we are invited to be concerned.

That aside, though, what also came over from the debate - and Mr Farage's triumphalism – was the inability of the other leaders to offer a coherent immigration policy, and their reluctance thus to engage. This has Stephen Glover noting the refusal of the political class to address the question that most troubles ordinary people.

That, in itself, demonstrates a lack of competence and vision within the said "political class" for, as we have remarked, there is plenty that can be done to check immigration – in or out of the European Union.

More specifically, as we have noted many times, rather than expect instant results from any one action – and nothing from something as unrealistic as "controlling our borders" – we need to address in their totality the "push-pull" factors that drive migration. 

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In this, we can employ a philosophy to which we were directed by Boiling Frog, one which was employed by Team GB Olympic Cycling Team as their "secret weapon" in scooping up seven out of ten medals in the contest.

As explained by British Cycling's performance director Dave Brailsford, underpinning their success was the philosophy of "marginal gains". This came from the idea that "if you broke down everything you could think of that goes into riding a bike, and then improved it by one percent, you will get a significant increase when you put them all together".

You do a series of tiny things which, in themselves deliver only marginal gains and, by themselves, do not achieve very much. But, if they are clumped together, they make a big difference.

In terms of pull factors, we have posited that enforcing HMO standards, removing "beds in sheds", taking illegal foreign-registered cars off the road, insisting that the minimum wage is paid, as well as limiting benefits, will give us a series of "marginal gains" which, collectively, will alter the balance of advantage for would-be migrants, between staying at home, coming the UK, or going elsewhere.

All that is needed is the political will and that, more than anything, is probably what is missing, opening the way for the demagogic Mr Farage to peddle his empty mantras.

The tragedy of this is that, in the vacuum of thinking that afflicts our established Westminster politicians, Mr Farage is intent on throwing the baby out with the bathwater. Instead of seeking to control immigration – which, with the "marginal gains" philosophy, is eminently possible – he is seeking to "control our borders" – which is not. No country which admits 32 million legal visitors each year can ever aspire to that state of affairs.

But if in "marginal gains" our "Team GB" has given us a name for something which hangs together as a credible policy, we could at least embrace it. In any event, we need to walk away from the quick-fix that Farage has on offer, and which, if we allow it, will lose us an "in-out" referendum.



Richard North 04/04/2015 link

EU exit: why do they have to lie?

03/04/2015  

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A lie, as I am wont to say, is not simply a matter of telling an untruth but, when it comes to Oliver Kamm, a Times leader writer and columnist, he doesn't even bother to disguise his lies.

Writing in his paper on why future UK prosperity depends on remaining in the EU, he refers to the Norway "model". He then tells us that Norway is "a prosperous nation that is outside the EU but has access to the single market by being part of the European Economic Area" and that it "implements almost all EU regulations and laws while having no say at all in forming them".

Deconstructing the last part of that claim, not by any account can it be said that Norway implements "almost all EU regulations and laws". With the acquis standing at about 21,000 legislative acts in force, and the Single Market comprising around 6,000, the assertion made is simply not true. That, from someone who should know better, makes it a lie.

Coming then to the next part, there can be no justification for saying that Norway has no say at all in forming the Single Market rules. Even if one accepts that Norway's role is limited to consultation at the early stages (and it is far more), it cannot be rightly said that Norway has "no say at all" in forming the Single Market rules. That too is a lie.

Mr Kamm also asserts that "there's no cost-free way of gaining access to the internal market". Norway, he says, "has to pay for it. It makes a big budgetary contribution to the EU, almost half a billion euros annually, with no rebate".

Here, though, the lies become more devious. For sure, as part of the EEA package, there is provision for a range of financial contributions, but these include "Norway Grants", made by Norway to eastern enlargement countries to help with their post-Communist economic rehabilitation.

In the period 2009-14, these grants amounted to €804 million, supporting 61 programmes in 13 countries in Europe including the member countries that joined in 2004 and 2007. But this money is not remitted to the EU and is not part of the EU budget. It is administered separately, under the aegis of the Norwegian Ministry of Foreign Affairs.

Norway also provides 95 percent of the funding to the EEA Grants. The two together amounted to €1.8bn over the period, of which €1.71bn was paid by Norway. As with the Norway grants, the EEA grants are not part of the EU budget. They are administered by the independent Financial Mechanism Committee.

These payments are part of the EEA agreement but they are not specifically payments for access to the Single Market. They are effectively part of Norway's strategy for co-operation with the EU.

That, however, is not the full extent of relations. As of 2014, Norway participated in twelve EU programmes, including Horizon 2020, Erasmus +, the Consumer Programme and the Copernicus programme. It also has a bilateral arrangement for participation in interregional programmes under the EU's Regional Policy.

Additionally, it takes part in the activities of 27 EU agencies. These include the Education, Audiovisual and Culture Executive Agency (EACEA), the European Agency for the Management of Operational Cooperation at the External Borders (FRONTEX), the European Agency for Safety and Health at Work (EU-OSHA), the European Chemicals Agency (ECHA), the European Defence Agency (EDA), the Executive Agency for Health and Consumers (EAHC), the Research Executive Agency (REA) and the European Police College (CEPOL).

As to the budget for these activities, over the 2007-2013 multi-annual period, total EU spending was around €70 billion, of which the estimated EFTA contribution was in the order of €1.7 billion – averaging approximately €250 million a year. Norway carried 95.77 percent of that cost (€1.63bn).

This cash, therefore, is for services rendered and, even then, the funding was not one-way. Around €1.01bn was returned from EU funds, making the seven-year net contribution in the order of €620m - or about €90 million a year.

In the Seventh Framework (research) Programme, for instance, Icelandic and Norwegian participants, including many small and medium-sized enterprises (SMEs), were involved. Icelandic researchers were contributed to 217 projects, receiving funding of nearly €70 million. Norwegian researchers contributed to more than 1,400 projects, receiving €712 million. Both Iceland and Norway signed up to the successor programme, Horizon 2020.

As to the specific EFTA contributions paid for the functioning of the Single Market, these come out of the EFTA budget, to which Norway pays its contribution. There is no direct payment to the EU.

Currently the annual (2014) budget is 22,360,000 Swiss Francs (about £16 million), of which 55 percent is borne by Norway. This includes categories defined as EEA related activities, EFTA/EU statistical cooperation and EU/EFTA cooperation programmes. That, strictly, is the cost of Single Market Access which, on a pro-rata basis, would cost the UK less than £100 million per annum.

However, if the total gross amount were taken for Norway's annual payments were taken, that would amount to about £500 million in real money. Should the UK leave the EU and rejoin the EEA, the pro-rata payment would amount to about £6 billion a year gross – just under a third of current gross payments – or about £4 billion net. If it is done on a GDP ratio, the UK's economy is five times the size of Norway's, we would pay £2.5 billion gross. Net, that might work out at as little as £1.8bn.

By any reasonable measure, that is a bargain. Even with the lies, the case stands up for the Norway Option as an interim solution for leaving the EU.



Richard North 03/04/2015 link

EU exit: the Norway/UNECE Option

31/03/2015  

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Following on from the latest Open Europe propaganda, we saw over the weekend in a repeat dose from their "senior political analyst", Christopher Howarth.

At least, in this instance, Howarth descended from his Olympian heights and attempted to argue his case in the comments, but thereby only managed to illustrate the thinness of their analysis. But Open Europe's problem, as we have earlier pointed out, is that they are in reality "little England" with no real idea of the way the world works.

Take for instance, the issue of packing cargo transport units (CTUs – or containers to you and I). Improved, common methodology is very much a practical requirement and, therefore, grist to the mill for international standards-setters, who have been on the case.

In this case, there have been three international organisations on the case, the IMO, the ILO and UNECE, working on a joint code of practice, the latest edition of which was finalised last year.

Alongside this, and entirely predictably, the EU has been producing its own road transport guidelines, which owe a great deal to the IMO/ILO/UNECE code, with all of them relying on specific EN standards, which are common to both texts.

We thus have a classic example of the international community getting together to solve a common problem, which – as the European Commission reminds us - is of some significance. Up to a quarter of truck accidents are linked to poorly secured loads.

However, the crucial rationale for the involvement of international bodies is that, without common rules, national authorities will make their own rules, making it hard for international transporters to know the minimum requirements for journeys covering several countries.

Some people argue for mutual recognition of standards, but pressure comes for common standards if accidents can be pinned on lower standards, especially if one country is seen to be gaining a commercial advantage from working to more relaxed codes. Domestic truck drivers are quick to complain (and rightly so) if foreign truck drivers are working to different standards.

And then, with a plethora of standards, enforcement becomes near-impossible, as vehicle inspectors are required to have a working familiarity with many different codes.

In this context, we are not dealing with mad regulators, creating rules for the sake of it. The rules save lives, reduce "red tape" and facilitate international trade. They are a hard-won asset and a properly constructed body of international law is something to be valued – not, as some would aver, to be removed as quickly as possible.

Therefore, few sensible people with dispute the need for international rules. And very often it makes no sense to have one set of rules for external trade and other for domestic application. Inevitably, there is a natural progression towards regulatory convergence over a wide range of non-contentious issues.

No one, for instance, is going to man the barricades because of an international requirement for all stop lights on vehicles to be red, or for battery sizes to be standardised, so that the same battery type will fit your camera, whether bought in London, New York or Tokyo.

What actually matters, therefore, is not the fact that rules but be agreed, but the way they are agreed – and the nature of the organisations that produce the rule. In short, this is the age-old battle, to which Booker and I referred, as between supranationalism and intergovernmentalism.

In the former, espoused by the EU, individual member states can be over-ruled under majority voting – thus over-riding the sovereignty of the members. In the latter, progress can only be made through consensus, and any one member state can opt out of provisions they do not accept.

The difference is more than adequately summed up in the short history of the 56-member United Nations Economic Commission Europe (UNECE), tells us of the early days of the Commission and the rules set by its first Executive Secretary, Gunnar Myrdal – previously Swedish Minister of Trade:
Very rapidly, Myrdal set out a method and two rules to ensure that the work of the subsidiary organs of the Commission would be practical and acceptable to all parties. First, the method was that "big and general problems, which are set forth in [the] terms of reference [of the subsidiary organs], are tackled in their technical aspects, by dividing these wider problems into their composite parts, so clearly stated and defined that government experts can usefully and effectively discuss them between themselves and seek agreement on practical solutions".

Second, his two rules were that "no meeting is better than a bad one" and that as a rule issues should not be brought to a vote in the working organs of the Commission. "This practice is founded upon recognition of the fact that no economic problem, indeed no important problem whatsoever, concerning sovereign governments can be solved by a majority decision in an intergovernmental organization, but only by agreements between as many governments as are willing to consent".
It is this latter founding rule that defines the essence of an intergovernmental organisation, and is the very antithesis of the regime set up by Jean Monnet, in establishing what has become the EU.

Here, there is also another crucial difference. A key feature of the EU is that the Commission holds the monopoly of proposal, so that only it can propose new laws. And since the only way a law can be removed is by proposing one to abolish it, by this means the Commission retains absolute control over the acquis.

The difference with UNECE is that any member state can propose a new standard (often called "UN Regulations"), and the organisation has a particular tool called the Common Regulatory Objective (CRO), where members can define their needs and convert them into international standards.

Then, through the mechanisms of the WTO Agreement on Technical Barriers to Trade, these can be adopted globally – and in particular by the EU, which is a signatory to the agreement. UNECE thus has the capability and the mechanisms for defining Single Market standards.

Now pulling together more details, readers will recall our earlier piece on the "European village", in which we recounted that when Delors on 17 January 1989 spoke to the European Parliament about the EEA, he referred to the "European village", in which the European Community was but one "house", with another being EFTA.

Delors then was proposing equal partnership in the "European village", with common decision-making in the formulation of the Single Market rule book. And, although, exactly a year later, he was to rescind that offer, the process has actually lived on through UNECE.

In much of my earlier writing about this organisation, though, I have been focused on the car industry and the UNECE-hosted World Forum on the Harmonisation of Vehicle Regulations, known by its short title of WP.29. But just as interesting is Working Party on Regulatory Cooperation and Standardisation Policies, known as WP.6.

This is described as a forum for dialogue among regulators and policy makers, where they discuss a wide range of issues, including technical regulations, standardisation, conformity assessment, metrology, market surveillance and risk management.

The Working Party, through its terms of reference, "makes recommendations that promote regulatory policies to protect the health and safety of consumers and workers, and preserve our natural environment, without creating unnecessary barriers to trade and investment". There is more detail in this brochure.

In common with much international quasi-legislation, none of this has binding effect, but that doesn't stop many of the recommendations becoming regulation through the EU and directly through national legislatures, or from being adopted as guidelines or codes of practice, which can also be given mandatory force.

The work on the container code of practice, with which we opened this piece, however, is handled by one of its many transport committees, the scope of which is vast – so much so that it is truly amazing that the organisation remains so obscure.

This is especially more so as UNECE is a champion of the nation state, remarking in its history document that, despite wild claims from operators in the financial markets, a few multinational companies, and the occasional visionary that the nation state is dead or redundant, a remarkable feature of the new age of globalisation is its resilience.

Indeed, it says, looking at its growth over the last sixty years or so the nation state has prospered: the membership of the United Nations in 1945 was 51 states, rising to 152 in 1979, the year when globalisation was on the point of acceleration, and to 192 today.

Thus, when we look to the future, and the prospect of withdrawing from the EU via the "Norway Option", we then have to think about the next step. That is replacing the EEA with a genuine Single Market, in which there is common decision-making in the "European village", as between the EU and all other nations.

Rather than seeking to re-invent the wheel, as so many have tried to do, we can look to an organisation which is already in place, one which has a sixty-year history of managing intergovernmental forums and has considerable experience in developing the process of globalisation - UNECE. That defines our "European village". 

In its own words, the competence of this organisation, the engrained habits of cooperation, the treatment of all participants on an equal footing, and the demonstration that respect for diversity is compatible with economic and social progress, all add up to a civilised message and inspire confidence in the capacity of [UN]ECE to continue to provide good service to the governments and the people of the region.

With that, we end up with a hybrid exit model, which starts off with the "Norway Option" to get us out of the EU and morphs into a UNECE-administered Single Market, hosting the common decision-making process and replacing the EEA. This becomes the "Norway/UNECE Option" - or EFTA/UNECE if you prefer.  What's there not to like?



Richard North 31/03/2015 link

EU exit: an absence of thinking

27/03/2015  

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The minimal coverage given to Owen Paterson's Heritage speech tells its own story, but even our venal media should have made something of his responses to questions. As it is, only Huff Post picks them up, having Paterson say that "we would lose an 'out' referendum" because his "optimistic vision" has not been explained. "And 'out' is frightening", he added, "it's unknown and people will hang onto nurse".

Paterson's view is that, "we have to go the whole hog, get back to the trade arrangement, but we need time to explain there is a positive destination". He thinks we have "the most spectacular future outside the political and judicial arrangements [of the EU], embracing the trade, commercial and economic aspects", he said. "But at the moment that has not been explained".

"There is a protest party", Ukip, that has done no absolutely no work on the detail [of how to leave]", Paterson told the Americans, "and they are being attacked, quite rightly, for that because their image is backward looking and negative".

As a result, those like him agitating for the United Kingdom to leave the EU needed more time to persuade voters it was a good idea.

There, writ large, is precisely the predicament we're in, on which we elaborated recently, on the back of the YouGov poll that put the "inners" ten points ahead for the second month running.

By coincidence, yesterday we saw the publication of the British Social Attitudes Survey, which very much confirms the YouGov findings. It has 57 percent wanting to continue with EU membership, with only 35 percent wanting to withdraw.

As with YouGov, when a more nuanced question is asked, offering different options, the position changes. Those who want to leave the EU drop to 24 percent, while those who would like to see an attempt made to reduce its powers stands at 38 percent. Only 18 percent want to leave things as they are, ten percent want the EU to have more powers, and four percent want a single (European) government.

The Social Attitudes Survey thus sees most people as being "eurosceptic", defined as wanting to leave the EU, or seeing it with reduced powers. But therein lies the fatal confusion – the "reformers" are not "outers" and it cannot be assumed that they will vote to leave the EU in any referendum.

Here, Paterson's point has particular force. The "eurosceptics" are split between leavers and reformers, and – of the former – there are irreconcilable splits between different groups and sub-sets, and no clarity of vision from the main players.

If there has been any change, it is that these splits are being recognised, although there are no indications that different factions are prepared to debate the issues – or even explore the issues dispassionately.

Thus we have the likes of Ruth Lea arguing for the "WTO option" without troubling to explain why she has suddenly deserted the Swiss Option. And we also have Roger Helmer who tells us that UKIP cannot accept any deal, even an interim deal, that doesn't give us control of our borders.

This is the man who is confident that the UK could negotiate a free trade agreement with the EU but, like so many of his ilk, he simply doesn't do detail.

Presumably Mr Helmer expects the UK to work within the provisions of Article 50, so one assumes that he would be content to wait the ten or more years that it would take the negotiations to reach an agreement. And, all the while we would remain in the EU, paying the contributions, fully committed to freedom of movement – just because Mr Helmer doesn't like interim solutions.

On the other hand, if we went for the "Norway option" they hate so much – or "model" if you must – we could be out in two years, ready to negotiate a longer-term solution, which would include dealing with the vexed question of freedom of movement.

Meanwhile, the FUD flows and the lies proliferate. They are easy to rebut - although far too difficult for the aristocracy.

And that is perhaps the underlying problem. The eurosceptic "aristocracy" have long ceased thinking. And they are, of course, far too grand to debate issues with mere mortals - or get down in the weeds, where the real fighting is going on. Thus, their arguments are fixed in aspic, going nowhere and inspiring no one.

Along with Ukip, they are set to lose us the referendum – if we let them.



Richard North 27/03/2015 link

EU exit: joining the "European village"

26/03/2015  

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Flagged up at the weekend by the Sunday Telegraph, Owen Paterson has now delivered his speech to Heritage, at the Thatcher Center in Washington. The full text is here.

As with the Europe speech, on which it is loosely based, this has hidden depths, but readers will particularly appreciate this passage:
In short, and this is critical for Americans to understand, it is not so much that Britain should leave the EU, as that the EU is leaving us. It is critical to understand that the economic Single Market and the political EU are not one and the same thing. The Single Market is a formal fact under an arrangement called the European Economic Area (EEA). It is an agreement between EU member states and three of the four members of the European Free Trade Association (EFTA) -- Norway, Iceland, and Lichtenstein minus Switzerland.

By switching our membership to the EEA, Britain can pursue participation in the Single Market without being strapped in the EU’s political and judicial straightjacket. And if we joined EFTA, often described as the "Norway Option", it would become the fourth largest trade bloc in the world.

Confusing membership of the Single Market with membership of the EU is a common error. You can stay in the Single Market and not be in the EU. And the argument that leaving the EU would damage Britain's ability to continue its trade with our European neighbours – thereby damaging the economy of the entire developed world including the US - massively underestimates the huge strategic and selfish interest that our neighbours have in ensuring our continued vigorous participation in the Single Market.
Even at the eleventh hour, I understand, there were attempts to stop Paterson saying that, and you can get a hint of how strident the critics are becoming, from this presentation chaired by Roger Helmer, who dismisses the Norway Option" out of hand, despite one of the speakers being Robert Oulds, who is to speak in support of the proposition.

One can note here the behaviour of Helmer, who is effusive in his praise of the increasingly tiresome Ruth Lea, and her promotion of the suicidal catastrophic "WTO option", yet can barely conceal his dislike for what Robert had to say.

Oulds's speech is worth listening to in full, and especially where he offers Delors as a "teaser", reminding us that on 17 January 1989 to the European Parliament, he spoke to idea of getting the EEA started. But the Commission President's vision, at the time, was of a "European village", in which he saw a house called the "European Community". "We are its sole architects; we are the keepers of its keys", he said, "but we are prepared to open its doors to talk with our neighbours".

Delors was actually proposing to the EFTA member states a "more structured partnership with common decision-making and administrative institutions", basically acknowledging the presence of equal partners in the "European village".

There is more than a hint of this in Owen Paterson's speech, when he argues that our exit from the EU "will strengthen both the global trading system and the foundations of global security". This is, he says, in tune with what Churchill told the House of Commons in June 1950 when he said:
With our position as the centre of the British Empire and Commonwealth and with our fraternal association with the United States in the English-speaking world, we could not accept full membership of a federal system of Europe.
Churchill went on to say:
We must find our path to world unity through the United Nations organisation, which I hope will be re-founded one day upon three or four regional groups, of which a united Europe should certainly be one. By our unique position in the world, Great Britain has an opportunity, if she is worthy of it, to play an important and possibly a decisive part in all the three larger groupings of the Western democracies. Let us make sure that we are worthy of it.
Here is also a version of the "European village", but one which fits in as one of upon three or four regional groups, which themselves are part of the United Nations.

This in turn reflects Churchill's speech to the Congress of Europe at The Hague on 7 May 1948. Then, with others, he argued for the United Nations to be the "paramount authority" in world affairs, but with regional bodies as part of the structure. They would be "august but subordinate", becoming "the massive pillars upon which the world organisation would be founded in majesty and calm".

Although he didn't specifically mention it by name, as far a Europe was concerned, Churchill was referring to UNECE, which had been founded in 1947, with some of the history told here. This, in effect, is the "European village" to which Delors could have been referring, in which the EU and EFTA were but individual "houses" with the same right of decision-making on Single Market rules.

Robert Oulds, in his address, tells us that, exactly a year later, Delors rescinded his offer of common decision-making. By then the Berlin wall had fallen and the EU was eyeing the former Soviet satellites as new members, and did not want to make life outside the EU too attractive.

But, with the EU poised to leave the UK, the moment again is arriving when the EU must concede common decision-making by different "houses" in the "European village", for which purpose Owen Paterson has already suggested UNECE as a suitable forum.

The Americans, yesterday, would not necessarily have understood his nuanced references, but gradually we are seeing the emergence of a credible, long-term alternative to the EU, and one which – oddly enough – Churchill was advocating back in 1950, when he was rejecting the idea of joining Mr Monnet's first supranational government.



Richard North 26/03/2015 link

EU referendum: losing it before we even start

25/03/2015  

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Published yesterday was the latest YouGov poll on EU sentiment, and it does not make good reading. The ten-point lead for the "inners" established in February is maintained – at 46 percent in favour of remaining in the EU as opposed to 36 percent who would vote to leave in a referendum.

Faced with renegotiations and a recommendation from Mr Cameron that we should stay in, the percentage supporting the EU rises to 57 percent, with only 21 percent wanting to leave – much the same as it was last month.

If there is any consolation to be taken from these figures, one could at least observe that the "Ukip paradox" is broken – the phenomenon where, as Ukip popularity increased, support for leaving the EU declined. As it stands, support for Ukip is currently declining – down to 12 percent according to YouGov and a mere ten percent according to ComRes in the Daily Mail.

If Farage actually knew what shame was, now would be a good time to show it. His tenure as leader of Ukip has delivered what is, on the face of it, an unwinnable hand. Even if Mr Cameron gains a victory at the general election, and gives us a referendum, the chances of winning it must be slight.

Not a little of this must be attributable to Mr Farage's failure to ensure that his party produced a credible exit plan, on top of a clear vision of what a post-exit Britain would look like. Instead, he has ceded the ground to the charlatans of Open Europe and the like, who are so successfully muddying the waters.

OE is even now fielding its chairman, Rodney Leach, who has come out of the woodwork to tell Reuters that: "Transforming Britain into the deregulated, free trading economy it would need to become outside the EU sounds easy in theory, but in practice would come up against some serious political resistance within the UK itself", thus knocking down the straw man of Open Europe's making.

Even Roger Helmer is beginning to realise that OE is not batting on the same side but, having given this Europhile think-tank such a head start, it is going to be very difficult to claw back lost ground – even if Ukip was capable of doing it, which does not look to be the case.

The essential requirement, though, is actually relatively simple – to the extend that Ryan Bourne, head of public policy at the Institute of Economic Affairs, has managed to work it out – even if his message is a tad inconsistent.

He nevertheless says that, if the outers want to win a referendum, "they need to neutralise the economic issue by showing that Britain would be no worse off outside". He adds: "The evidence suggests that, with broadly sensible policies, this is achievable".

That is actually straight from Flexcit (and about the only place you will see it), where the "Norway Option" combined with repatriation of the acquis offers a cost-neutral solution to leaving the EU, and buys time to negotiate a longer-term solution, once we have left.

What we must also do in this context is continually emphasise – as has Owen Paterson been doing - that the Single Market and the political baggage of the European Union are not one and the same. It is possible to leave the EU and remain in the Single Market – which is precisely what the Norway Option - or the "Norway Model" if you prefer – aims to do.

By this means, we can easily address the fear, uncertainty and doubt (FUD), delivered by the likes of Standard Life Chairman Gerry Grimstone, who on the one hand tells us that, "leaving the European Union would be disastrous for Britain and harm its economy" and then in the same breath declares: "It would be disastrous for London and the UK if the UK were to leave the single market".

But it is a measure of the inadequacy of the "eurosceptic" response that we have Robert Oxley, campaign director of Business for Britain, condemning Grimstone for joining in "the scaremongering that life outside of the EU would be disastrous for the UK" – without any attempt to draw the distinction between EU and Single Market membership.

And, while Oxley bleats about the cost of "EU financial regulation", if he lifted his horizons somewhat, he would see from the New York Times that the regulatory agenda is global, with the sub-regional EU only marginally involved in primary standard-setting.

This, though, so much typifies the state of the anti-EU campaign. On the one hand we have the incompetence of Mr Farage and, on the other, the London-based think-tanks entertaining themselves with increasingly arcane and irrelevant arguments – much in the manner that climate-change has degraded into a tedious squabble between rival pundits.

Amid all this, too few people are focusing on what it actually takes to win a referendum. Even if some in Civitas are beginning to steer in the right direct, this is too little, and risks being too late. It leaves us ten points behind in the polls, and still prey to the charlatans who would have us lose the campaign before it even starts. If we are going to win, this is not the way to do it.



Richard North 25/03/2015 link

EU exit: regulation - the "Brussels effect"

24/03/2015  

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Of all the nonsense dribbled out by the London-based think-tank claque and their fellow travellers, none is quite as pernicious as the constant discussion on EU regulation and the benefits EU withdrawal might bring, especially in terms of the "deregulation" which is supposedly on offer.

Most commentary simply betrays profound ignorance, not only of how industry and trade works, but also of the practical application of regulation in today's society. We even find, in many instances, an almost total lack of appreciation of the nature of regulation – why it actually exists, and the roles it fulfils.

In that context, it is worth going back a little to a paper written in January 2013 (picked out by one of our own commenters), written by Anu Bradford, professor of law at the Columbia Law School. Entitled, "The Brussels Effect: The Rise of a Regulatory Superstate in Europe", it offers important insights into the way regulation works and – of particularly relevance – why it is that certain regulations predominate at global level, and not others.

Without putting too fine a point on it, this paper kicks into touch many of the ill-informed posturing of those who would argue that there is any immediate regulatory relief to be had from leaving the EU. But, as with many things of value in this world, the argument is relatively complex. There are no short-cuts, when it comes to trying to understand the issues.

With that in mind, summarising Anu Bradford's paper is extraordinarily difficult. It is over-long, not well structured, and repetitious. However, in attempting to sum it up, one has to say that the paper is a slow burn, with Bradford telling us that "a deeply underestimated aspect of European power that the discussion on globalisation and power politics overlooks: Europe's unilateral power to regulate global markets".

The European Union, she writes, sets the global rules across a range of areas, such as food, chemicals, competition, and the protection of privacy. EU regulations have a tangible impact on the everyday lives of citizens around the world. To her specific audience, she adds, few Americans are aware that EU regulations determine the makeup they apply in the morning: the cereal they eat for breakfast, the software they use on their computer, and the privacy settings they adjust on their Facebook page.

The EU, we learn, also sets the rules governing the interoffice phone directory they use to call a co-worker. EU regulations dictate what kind of air conditioners Americans use to cool their homes and why their children no longer find soft plastic toys in their McDonald's Happy Meals. This phenomenon, the "Brussels Effect", is the focus of her article.

From there, we begin to get an explanation of what is called "unilateral regulatory globalisation", a process that occurs when a single state is able to externalise its laws and regulations outside its borders through market mechanisms, resulting in the globalisation of standards.

En route to exploring this phenomenon, Bradford takes a look at the so-called "California Effect" where, due to its large market and preference for strict consumer and environmental regulations, California is, at times, effectively able to set the regulatory standards for all the other states.

Businesses willing to export to California must meet its standards, and the prospect of scale economies from uniform production standards gives these firms an incentive to apply this same (strict) standard to their entire production.

This effect expand to become the "Brussels effect", when firms trading internationally find that it is not legally or technically feasible, or economically viable, to maintain different standards in different markets. When trading with the EU requires foreign companies to adjust their conduct or production to EU standards - which often represent the most stringent standards - or else forgo the EU market entirely, they tend to adopt those standards uniformly throughout their entire enterprises.

We saw this in our interview Bjorn Knudtsen, Chairman of the Codex Fish and Fisheries Product Committee. He told us that, when it comes to Norway, trade in fish and fisheries products is a vital national interest, with 95 percent of products, worth €3 billion annually, being exported. And as an exporting country, he said – like other major exporters – strict regulatory standards are a necessary and acceptable price to pay for what he terms "certainty".

Companies preparing a product for export did not know from the outset the destination of any particular batch. Therefore, they wanted to be able to produce to a generic standard which would be accepted in any and every country to which the product might be despatched. They don't want to be producing different batches to different standards.

Thus, we find processors adopting the highest posted standard, as a means of ensuring that the product has access to the largest number of markets. This, Bradford elaborates on, when she argues that, while the EU regulates only its internal market, multinational corporations often have an incentive to standardise their production globally and adhere to a single rule.

It is this mechanism which converts the EU rule into a global rule - the "de facto Brussels Effect". Then, when these export-oriented firms have adjusted their business practices to meet the EU's strict standards, they often have the incentive to lobby their domestic governments to adopt these same standards in an effort to level the playing field against their domestic, non-export-oriented competitors - the "de jure Brussels Effect".

Interestingly, Bradford sees other states are lacking power to affect this process. Countries whose regulatory preferences are overridden by the EU's standards gain nothing by entering into a regulatory race with the EU. Outpacing the EU only leave them with even higher, and hence less desirable, regulatory standards.

As to international institutions, these are regarded as having only an imperfect ability to dampen the EU's regulatory ambitions, which – argues Bradford – means that the greatest check on the EU's regulatory powers comes from within the EU itself. As the EU's powers grow, internal divisions within the EU will increase. In the end, she says, the boundaries of the EU's regulatory reach will be defined by the EU's own evolving conception of the limits of its regulatory authority.

Here, we have to disagree with the Bradford script, as she fails to mention the WTO Agreement on Technical Barriers to Trade, to which the EU is bound and which is increasingly defining the regulatory agenda. Once that is factored in, one sees that international institutions have far greater influence than Anu Bradford would allow.

Nevertheless, Bradford's article is helpful in further exploring the "California Effect" and its transformation in the "Brussels Effect". Existing scholarship, she says, recognises the importance of market size and scale economies as a source of a jurisdiction's external regulatory clout. There are, she says, additional factors, which can prevent a company from producing different varieties for different markets and thereby give effect to the "Brussels Effect".

Wading through this over-long paper (running to 67 pages), the essence is that the "effect" has its greatest impact when Brussels wins the "race to the top". In other words, it is the highest, or strictest standard that wins out, at global level, and for the reasons already set out. This is summed up in one paragraph, telling us that:
… export-oriented EU firms to seek consistent and predictable regulatory frameworks. Uniform regulations have abolished obstacles for doing business within the common market - it is more complicated and costly to comply with multiple, sometimes conflicting regulations than with a harmonised regulatory scheme. And once all European firms have incurred the adjustment costs of conforming to common European standards, they have preferred that those standards are institutionalised globally. Hence, to level the playing field and ensure the competitiveness of European firms, EU corporations have sought to export these standards to third countries.
This is the crunch issue. As trade has globalised, so has regulation, and when it comes to the choice of standard, firms will always opt for the most demanding, simply because it is cheaper and more efficient to work to a single standard than it is to work to multiple standards.

Thus, anyone who thinks that leaving the EU is going to bring about the fabled bonfire of regulation is deluding themselves. Trade may be driven by the demand for goods and services, but it is facilitated by harmonised standards and, whoever produces the strictest standards gets the cream. In or out of the EU, we will continue to see the "Brussels effect" dynamic, and it will ensure that our statute book remains more or less intact.



Richard North 24/03/2015 link

EU exit: Open Europe distorts the debate - again

24/03/2015  

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Britain faces a stark choice after an EU exit of allowing its economy to shrink by £56 billion, by shutting down its borders, or agreeing to the continued free movement of European citizens in a new deal with Brussels, says the Guardian, citing Open Europe as its source.

This is another thoroughly dishonest report from one of the country's least ethical think tanks, which is now devoting its energies to distorting the "EU exit" debate, in an attempt to garner support for its bankrupt "reform" option.

The tactics adopted are as familiar as they are dishonest, the think tank presenting a series of false choices, downplaying preferred options and playing the "scare" card by going for one of the least realistic options and attaching a massive price tag to it – in this case of 2.23 percent of GDP by 2030, or £56 billion a year.

The "straw man" is then presented by Mats Persson, director of Open Europe, as a challenge to Nigel Farage, who says in a message to the Ukip leader: "You have some questions to answer [on] exactly what you want to see outside. What is it?"

Persson, who is maturing as a consummate, unprincipled liar, thus frames the debate in terms of a "free trading Hong Kong-Britain with very liberal policies, including on migration", which he asserts is "what is needed to make us competitive", or "what probably most of what your [Ukip] voters want: to shut the borders and shut the world out which would mean a net loss in terms of the UK's GDP and economic competitiveness".

By presenting this "challenge" to Farage, however, Persson is shooting fish in a barrel. He is addressing the man whose party represents only the minority of anti-EU opinion, and which, in the twenty-plus years of its existence, has yet to come up with a coherent exit strategy. The think-tank director can thus cherry-pick any unrepresentative option he likes, to bolster his fraudulent case for renegotiating the EU treaties – which is the real object of the exercise.

In the OE report, we are told by the Guardian, four exit scenarios are set out, all of them offering the entirely unrealistic "big-bang" options with not the least attempt to consider hybrid solutions, which involve interim solutions and staged withdrawal.

As so often when it sets out to deceive, therefore, Open Europe is characterised by what it doesn't say – what it omits rather than what it tells its readers.

The worse case, which OE wants us to consider is Britain leaving the EU customs union and the single market, and failing to strike a trade deal with the EU. This, predictably, would create havoc with the trading arrangements with the EU, so much so that no one but an idiot (and Mats Persson) would even consider it. Not even Ukip is mad enough to consider this option, yet this is precisely what Persson chooses for his "Armageddon scenario". It is this on which he relies to support his assertion that leaving the EU could cost us £56 billion a year.

Predictably, and with weary constancy, OE skirts round the Norway Option – which is mentioned by name only once in the 104-page report. No analysis of the cost to the GDP of retaining EEA membership is made, by which sleight of hand, open Europe avoids telling us that this option would be cost-neutral. 

Such pages as are devoted to EEA membership are dedicated to telling us how bad the option is, so much so that – as with the IEA "Brexit" competition - the option does not make the final list of scenarios. This is "death by omission", the option dismissed with the classic and entire misleading comment that: "Only EEA membership offers full access, but also involves accepting all the EU rules without a vote on their design or implementation".

This is now part of the current OE armoury, presenting the vote as if it was the be all and end all of the legislative process. Yet, we have been told time and time again that the politics are settled long before the vote, with EEA countries having greater influence over new legislation than the UK. This, OE steadfastly chooses to ignore.

One can only conclude from this that the Norway Option really does terrify the Europhiles, so much so that OE rushes past it, to invite its readers to consider a "mildly improved version of Switzerland's relationship with the EU". In this particular fantasy, Britain negotiates an exit from the EU, involving a free trade deal with the rest of the EU which would give the UK similar market access to the one it currently enjoys. Yet this is still supposed to cost 0.81 percent of GDP.

This then paves the way for fantasy number three, an "even better version of Switzerland's relationship with the EU" – one which, presumably, washes even whiter. In this, Britain would scrap many "EU regulations" and introduce "unilateral free trade" in which the UK would open its borders to foreign competition. Remarkably, this fantasy scenario would lead to a boost to GDP of 0.64 percent.

Now comes the fanfare for the "best case scenario". According to the mendacious Persson, Britain would secure a deal with the EU, implementing a unilateral free trade arrangement, while going for "the maximum deregulation on EU rules such as scrapping all climate change targets". This, supposedly, would increase the UK's GDP by 1.55 percent.

But just to make sure that we understand that Persson does not actually recommend this move, he inserts the sly barb, that: "In political terms this would make Margaret Thatcher look like a socialist". What he doesn't tell us is that the Climate Change Act would keep the climate change targets in place, and therefore, wipe out his GDP boost.

For the first time, however, Open Europe actually recognises the potential impact of global versus EU influence over regulation, but readers need not expect an honest exploration of the issue. There is no honest intent anywhere in this report.

OE keeps the focus tightly on financial regulation currently in force, with a view to talking down the global influence. There is nothing of G8, its relationship with the FSB, OECD and the Basel Committee, and things to come, where the trend is towards globalisation of regulation. And those expecting a references to Codex, UNECE, or the World Forum for the Harmonisation of Vehicle Regulation, will be disappointed.

Such omissions, though, go completely unnoticed by a media which is increasingly proving itself unfit to report on the EU debate. In this instance, the Guardian buys into the myth-setting, conveying the OE "belief" that its report "represents a particular challenge to Farage who will have to decide whether Britain should see a dramatic shrinking in its GDP or allow unrestricted EU migration".

The egregious straw-man, of course, is not the challenge it is intended to be. It should be, because Farage has been almost criminally negligent in failing to ensure that Ukip has a credible exit plan. But over-confidence has moved Persson and his minions to go so far over the top that all they are doing is challenging is their own credibility.

Needless to say getting their propaganda into the Guardian has proved no challenge at all, but they probably found the Telegraph even easier. This paper is steadily abandoning even a pretence of supporting the anti-EU cause, and always gives OE a warm welcome. This report proves no exception.

Here, though, the Telegraph goes the extra mile and give Simon Wolfson free rein to comment – the shopkeeper and advisory board member of Open Europe who has turned stupidity into an art form.

Without so much as a blush, he tells us that, we should brace ourselves "for a barrage of misleading economic propaganda from both sides", of the EU debate, and then goes onto to retail the OE propaganda as if it was anything other than misleading economic propaganda, bizarrely asserting that it is "a remarkably balanced document".

When it comes to the European Movement, and even the European Commission, there is a certain honesty in their approach. They deliver propaganda, but at least we know it for what it is. The slimy, underhand approach of Open Europe is all the more detestable for its pretence that it is something it isn't – an impartial commentator.

The techniques used would be entirely familiar to Goebbels, as Wolfson tells us of his "fear is that those who are fighting to leave the EU would do so in the spirit of shutting out the world rather than embracing a global prosperity".

"If these attitudes prevail then Brexit can only damage the UK economy", he says. One could be charitable and assert that only his stupidity prevents him knowing full well that one of the primary purposes of leaving the EU is to escape the grip of the claustrophobic little Europeans in order to rejoin the world trading community as a member in our own right.

But with even its cheerleader unable to argue the case for the EU honestly and directly, this Open Europe's "landmark report" marks a new low in its level of deceit. It is so bad that, even though the case made by Ukip may be dire, the OE approach even makes Farage look honest.



Richard North 24/03/2015 link
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