Wednesday, August 26, 2015

It's NOT the EU, stupid

I found an interesting quote from Lord Hailsham in 1971 in respect to the EEC.
"It is true that the Communities have gone beyond the consortial pattern. There are these common institutions; the Commission, the Assembly, the Ministers, the court. There are fields of common law, very restricted because they are limited to the fields necessary to give effect to the nature of the economic community, but effective because they are enforced either by the legislative power of the individual member States or by the courts of the member States giving direct effect to rules of community law as interpreted by the Community courts. At first sight, this looks like a derogation from sovereignty. But I submit that, on close inspection, one can see that it is nothing of the kind. There is no physical power behind these institutions except the will of the members to keep their bargain, and no legislative or coercive power except the organs of the members to give effect to that will."
And this is the actual truth of the matter. The EU does not dictate in any real sense. Nothing the UK does in respect of EU compliance is not entirely voluntary. We comply because parliament wishes it to be so. In practice that means never saying no - because unlike the French, we hold true to our word.

The great dishonesty in this is that when the state does comply with the EU, for instance recent benefit cuts, it's dressed up as a domestic issue (ie evil Tory cuts). As it happens, I happen to agree with the measures put in place, but there is no democracy at work here. This is a classic instance of conforming to the EU non-discrimination ideal rather than putting our own interests first. Labour have the luxury of whining about it in opposition but they cannot pretend for a moment that they would do a single thing differently.

Thus the dictatorship is not from Brussels. It is from Westminster. Not only will they not confront the EU under any circumstances, they go to extended lengths to downplay or conceal its influence in some bizarre display of collective denial. The EU does nothing to us. We do it to ourselves - and we do it in "partnership" with the French who have absolutely zero intention of following the rules.

As undemocratic as the EU is, it is Westminster who continues to ignore the will of the public and they do in the certain knowledge that the media will not call them out on it because they lack the intellectual equipment to do so.

This should give some pause for thought to those who believe Jeremy Corbyn is a straight talking, principled individual. He speaks with forked tongue on the EU, believing it capable of reform - but given the constraints upon our democracy he has but two options - no domestic policy changes and the status quo, or further EU compliance. In practice that means either firehosing welfare at any hapless biped with an EU passport, or removing benefits altogether. As a populist he will duck the difficult and unpopular road and do precisely nothing. Or we can have David Cameron who will go right ahead and do everything the EU requires of him.

The short of it is, the options available to us are not ones we would ourselves choose, the way we would have it is closed off to us by way of keeping our word, our politicians have little say in it and continue to pretend they are in charge. This is a sham democracy and will remain so as long as we are members of the EU. But like I say, if we want democracy, Brexit is only the very beginning.

Adapt or die


Nobody is more acutely aware of the EU's need for reform than the EU. It is overextended in its ambitions, while badly needing to consolidate that which it has already assumed responsibility for. In the east it has bitten off more than it can chew. The Eurozone can't take on anymore basketcases, the neighbourhood policy isn't working and the Eurozone requires that members reform at a faster rate.

All of which is set to be addressed by the next EU treaty which will pull Switzerland and Norway closer and push us out in alignment with them, in what will appear to be associate membership. Cameron has little if any influence in this. But he will claim this as his great reform. What he's selling us is membership on more or less the same terms. Superficially, it will look like a great accomplishment. In reality, it's a con.

Here we must add a note of caution. Eurosceptics have claimed from the outset that Cameron will get no real reforms and we have always known we'd be sold a crock - but the specifics matter. Eurosceptics have spent much of this year discussing the alternatives to EU membership. In arguing for something like the Norway option, by creating a two tier Europe, bringing Efta states in closer, with Britain as the leading non-eurozone member, Cameron will not unreasonably be able to claim that what he has secured looks a lot like what has otherwise been proposed.

To the uninitiated, it will seem like an attractive proposition and moderate Tories might well be genuinely convinced. In fact we are already seeing a corp of Judas goats lining up. Tories who will join the No camp only to switch when the package is announced. That Boris Johnson is up to no good. They will turn round to us and say "what's your problem? This is more or less what you wanted."

It will look like a loser trading relationship, takes us notionally out of ever closer union and insulates us from the woes of the Eurozone. In reality it merely formalises the status quo and the political reality that ever closer union is dead in the water anyway. It might be enough for the swing vote to say yes.

In light of this, we should be careful in arguing for anything approaching the Norway option or other Efta option, not least because the new treaty makes it redundant but also because it may no longer exist as a proposition. Our blogs have only ever mooted the Norway option as an interim stepping stone in order to secure a departure lounge mechanism for the decade or so it will take to design genuine independence.

As we have previously argued, this associate status actually solves nothing. It might well work for Norway and Switzerland, and that will weaken our case, so we need to push hard on explaining the inadequacies of it, and why we must take a different path. In doing so we can't put forward a message of saving billions and closing the borders down. As much as Ukip failed to make any breakthrough in the general election, a ComRes poll today puts Ukip back down to nine per cent, while on the local level it looks like they are bleeding support and losing council seats.

Whatever we sell, it will have to be good. Insular nationalism attracts the very worst kind of people with the very worst prejudices based on a flimsy set of assumptions. The "going global" mantras coming from that shop carry little weight when contrasted with the noises made by their supporters and their MEP's. A global vision looks irreconcilable with a movement that is just itching to place border guards on every point of entry and inspect every vehicle coming in and out of the country.

Similarly prating about an Anglosphere really speaks to nobody. That just means English speaking countries which can rapidly be translated by the opposition as white countries only. That's the last place we want to be. Also the Commonwealth idea just doesn't have wings. It has many associations and those who preach it tend to be old men in blazers. More to the point, bringing Commonwealth nations into the global trading network is going to require massive investment in terms of modernising governance, roads and ports.

Meanwhile miserly bean counting over budget contributions just locks us into bickering over numbers and most people won't know who to believe. They'll tune out and go with whoever has the more credible message. The short of it is, we need a wow factor. A bigger, better idea.

We argue that Brexit makes room for much needed domestic democratic reform, but also that Brexit gives us a chance to redefine Europe and the single market and that we can show global leadership in addressing global problems.

We're going to get the usual baloney about not being big enough to go it alone, but in terms of GDP and political influence as a permanent member of the UNSC and NATO, such arguments are silly. We can "go it alone" as indeed smaller economies do. But we will want to be cooperating fully with the EU, participating in the community of nations as part of the economic and social life of the continent.

The starting point is that in or out of the EU, the EU isn't going anywhere, we will need a relationship with it and we still need it. That should give some eurosceptic pause for thought in their use of rhetoric. Any vision we present that isn't grounded in political reality and instead seethes with EUphobia is going to be trampled on in the polls.

We have to get past the usual hackneyed debates and have something innovative to say that speaks to what people really want. Populism isn't popular and while people may want something done about the migrant crisis, putting up walls is not going to win votes. Nihilism, cynicism and misanthropy cannot win.

We need to be opening up new debates about new directions and bringing something genuinely new to the table. If we're going over old ground, crunching the same numbers and moaning about the same things, then we are going to bore people. Frankly, how the eurosceptic brigade are not themselves bored of the standard arguments beats me. But we can't afford to bore the public. Boredom more than anything will kill our chances stone dead.

Eurosceptics are going to have to bin all the arguments they have rehearsed for decades. The world has changed, the battlefield has changed, and more to the point, these same arguments didn't work the last time we have a referendum. The opposition knows what to expect of us, it knows our arguments as well as we do, and it's not the burning issue that eurosceptics believe it is. If we don't have something new to sell, it really is game over. Adapt or die. 

Monday, August 24, 2015

Brexit is the key to reforming Europe


The more you look at Brexit, the more inherent complications you find. The EU has been steaming ahead with various trade deals in recent years that we would have to work hard to replicate, tus any Brexit talks would require we negotiate the use of these deals by proxy until such a time as we can negotiate our own. That will necessarily require membership of the single market and consequently, we cannot make any promises about ending freedom of movement, assuming that were even desirable.

The fact is that the EU does have clout. It's no use arguing the toss over whether it is in decline or not. It is still a large market we cannot afford to lose, nor can be cut ourselves off from the extended benefits of single market membership.

Thus, as we look to the referendum, it becomes more a question of defining what kind of relationship we want with it. Even with our independence we would have to work pretty hard and pretty fast to open up new trading avenues just to compensate for the mid term losses should we completely reject European co-operation. In fact, we will have to work hard and fast in any eventuality.

With that in mind, when a new treaty offering us something close to associate membership is announced, it will look superficially attractive. It saves us the hassle and expense of having to replace trade deals and to an extent excludes us from ever closer union. What it probably won't offer is an independent vote at the top tables or trade exclusivity, which in most respects merely formalises the stagnation we're presently stuck in while the eurozone group does what it needs to do.

Since we are not in the Euro and never will be we are never going to be in the mainstream EU, which is a good thing, but we will be relegated to a formalised slow lane where we find ourselves following the rules but having no say at the top international tables where trade rules, including those of the single market, are made. As we continue to point out, the EU merely rubber stamps regulation. It is a redundant middleman.

With that in mind, independence will always be the best option for Britain, and by defining the terms of our relationship with the EU, using an interim stage such as the Norway Option, we can set about creating a benchmark for interfacing with the single market so that anyone may join it, thus reducing the EU to an actor within it rather than the master of it.

Anyone who knows anything about the intricacies of the EU knows that it has overreached in so many ways and while there is notionally a single standard throughout it does not manifest in reality. The hypocrisies are there for to see for anyone who looks for them. By leaving and regaining trade autonomy can we set a baseline for what a genuine single market looks like, recognising that it is the United Nations Economic Commission for Europe that has the greater influence in regulatory convergence. In that regard, UNECE is the single market, not the EU. Regulatory convergence is more pertinent to modern trade diplomacy than border tariffs.

The problem with the EU is that it seeks deep and comprehensive trade agreements that require unrealisable social changes, which the EU is not equipped to ram through, and so in many respects we have a European Union in name only. In terms of trade we have multiple tiers of treaties making up various zones within, with members in various stages of economic and social development. In that regard the EU is overextended having made demands of members that it can never bring to fruition - not least it's overambitious cultural reforms to the East and in the Balkans. As we have discussed previously, these have the capacity to do more harm than good.

The EU is as much about cultural hegemony as it is trade, and in its hubris creates as many problems as it notionally solves. The reality is that Western European social values cannot be imposed on a society and such changes have to come from below through popular struggle. It is only through becoming wealthier do societies become more liberal and progressive - so we are better off aiming for a single market of mutual trading standards that create wealth. Prioritising that means the social reforms will take care of themselves. They will then be lasting and genuine rather than at the barrel of a gun.

That is how we reform both the EU and Europe while at the same time breaking out of the euro-centric mentality toward a global single market, where all voices matter. Put simply, the EU as an entity cannot be reformed in this way. Supposing we could change treaties, we cannot change the essence of what it is built upon.

The reason for opposing the EU is that it is inward-looking, anti-trade (or at least open trade), protectionist, unaccountable and at times ineffectual. The 'sovereignty' question is misplaced for the reasons most often stated - global markets mean global rules. The message is that we can do better, but to do this we have to break the EU and remould it as something different from the post-war/cold war 'hug your enemy close' viewpoint. Britain leaving allows all this to happen. Without that existential threat to the EU nothing changes and we carry on limping along - with nobody ever satisfied and the EU continuing to stamp out brushfires with diminishing resources and a shrinking mandate.

It should be clear to all that we need a new settlement for Europe and the superstate idea of the last century is a failed idea that will never reach completion. Brexit is the first step to designing that new Europe. For Europe to regain its vitality it must clear away the old and make way for the new. In this Britain can show leadership and once again be asserting its global values. What's not to like?

Thursday, August 20, 2015

Are you with us?


Ukip like to cast themselves as "the people's army". If that analogy holds then they are cannon fodder. What we need in this coming referendum is special forces carrying out special operations. We have seen that numbers without co-ordination and strategy does not get results. For all Ukip's resources and exposure it still failed to get more than one MP - attributable to their own lacklustre campaign.

For a long time we have warned that the EU referendum campaign will follow a similar path with well funded operations springing up from nowhere, attracting much publicity, with plenty of casual support, but in the end lack the expertise to put it to work. 

Looking at The Know's Facebook page we see it has already attracted a large number of "likes", but if we look at the content we see them making all the classic mistakes, making promises that Brexit is unlikely to achieve - and complaining about bent bananas. If I was going to design a false flag operation, it would look a lot like The Know.

They're essentially sucking up the kipper support and relabelling it - and that's not going to win any new territory. Here follows a glorious example of the sort of people they're attracting:


And then there's this little gemstone...


You don't have to dig deep to find it. This is what contemporary euroscepticism looks like now. Obviously such people are no use to us in building a progressive and outward looking case for Brexit, and the best thing The Know could do is serve as a cesspit to keep that lot distracted. We can't tell you just how depressed that makes us feel - but we're not going to take it lying down.

It is our view that we can do more with less. The Know and Business for Britain will waste a lot of money and energy rushing around well before the referendum campaign kicks off, boring their audiences and making an irrelevance of themselves. It is our view that the referendum will be much later than anybody thus far anticipates, so the focus must now be on building a reserve unit who can pick up where they tail off and reach new audiences with new arguments.

We're sceptical about how useful big ticket websites can be - and these eurosceptic start-ups tend to just feed from the existing pond, each cannibalising each-others support. There is no value in this. Instead what we need is a core of bloggers each with a respectable Twitter following. Individuals, not organisations will turn the tide. By our reckoning we're going to need thirty such people, who we are happy to train and lend support to. Thinkers who influence other thinkers are worth ten thousand kippers.

We are old hands at social media and blogging and can advise anyone who wants to join such a team. This team will need to crosslink and retweet each-other - putting egos and minor differences aside. They don't necessarily need to work together, but co-operation helps growth. We need to start early on this because on the web, content is king, and for search engine optimisation, older blogs with more content leave a larger web footprint. The mission being to put clear blue water between us and the kipper grunters, to show that there is a liberal and progressive wing of euroscepticism that has larger concerns and a broader visions.

What we definitely don't want are immigration obsessives, climate change bores or people who will rant about bent bananas. We are looking for euro-sceptics. And by that we mean actual sceptics who express genuine scepticism over everything they see and hear - especially those who, like us, are sceptical of the nonsense the europhobes are presently belching out on an industrial scale.

If you have a forensic eye for detail and a shrewd eye we need to hear from you. This is going to require a lot of commitment, and running a blog is no small undertaking - but that's the challenge. We need an elite squad of mature, dedicated people who can take a brief, work to a strategy and think for themselves. If you think you are up to the job and this post resonates with you then get in touch. You know what's at stake and the time to act is now.

mrnorth303@gmail.com
raenorth@aol.com

Wednesday, August 19, 2015

Trees that don't bend with the wind, won't last the storm


One thing we have seen in preliminary skirmishes on social media is that a lot of energy can be wasted on futile and often unwinnable arguments. At best you can win a debate hands down to zero effect or you can argue to a stalemate where it becomes just a battle of egos competing to have the last word - by which time nobody is paying attention. That's largely how social media works.

Here we reach something of a paradox in that we have long said the details are important, but in arguing for Brexit we should not get bogged down in details. All clear? No. Not really. The point is that we need to be aware of the details so as to be able to see the traps as they are set for us and not walk right into them. Instead we have multiple fallback positions whereby we are not forced to throw our entire resources defending any single case. The only battle we need win is the reassurance that trade will continue unaffected in the event of Brexit and that single market access is assured.

There are many means at our disposal, including the Norway option (EEA/Efta), the Swiss option or the more risky WTO option. All of them have respective merits but none represent a wholly satisfactory solution.

The Yes campaign will spend some considerable effort poking holes in such options. There is nothing to be gained by expending energy arguing the toss. Anyone who wants to have the argument with you has probably made up their own minds and are not likely to be persuaded. There is no value in wasting your own time in this way. It's easier to acknowledge that each of the options does have inherent flaws. We only advocate one or other solution as an interim off the shelf solution in order to retain single market access. Again we underscore the point that Brexit is a process, not an event and there is a long road to travel before we arrive at the destination of full Independence. There are stops along the way and any one option is largely the path of least resistance.

Our own view is that the Norway Option is the mode most likely to succeed in preliminary negotiations but it is unlikely the No campaign will ever reach full agreement in this regard. But then it doesn't matter. It really doesn't matter. From such a position we can then begin to design our path to future full independence. We fully admit that EU budget contributions will not be significantly reduced, nor do we see any immediate change in immigration policy - but it does solve the immediate problem of leaving the EU. As a first step, that is significant in and of itself.

That said, as much as a energy draining debate around the respective merits of each option, it's important not to be too invested in any single option because we do not know, and won't know until the very last phase of the referendum campaign what Cameron's "renegotiation" will look like.

By reading the runes, it is more likely that a new treaty will be put forward in place of treaty revisions which will be sold as a new settlement for Britain. Effectively it will formalise the "two speed Europe". We expect that it will include some concessions to both Norway and Switzerland bringing them and us into a form of associate membership and may well abolish the EEA, rendering the Efta solution redundant. Should the No campaign be over invested in any single solution, the entire case we make folds as the rug is pulled from under us.

In this eventuality we could adopt the processes and strategies used by the Australian government in securing its trade relations with the EU. Taken from 1997, it signed a joint declaration on EU-Australian relations which was followed two years later by a Mutual Recognition Agreement (MRA). Thus, an informal, unilateral declaration was anchored by the MRA, as a formal treaty.

The scope exists for the UK to do likewise, making a commitment to match EU trade harmonisation laws by way of a unilateral declaration, based on the current EEA acquis. This would not require the approval of EU member states. The UK would then be in a very strong position then to insist in access to Single Market, invoking WTO non-discrimination rules, as it would be maintaining regulatory convergence.

Completing the process, the UK would then negotiate an MRA. To this could then be appended an agreement on tariffs plus a bilateral agreement on programme participation, and there is an almost exact equivalence with EEA Agreement. Carried out under the aegis of Article 50, the negotiations would be given a formal framework. As long as the UK did not seek access to the Market on better terms than were available to a full member, there would seem to be no serious obstacles to concluding a full agreement.

It must still be reiterated than even this in itself is not the final destination. All this means is that trade need not be affected while giving us the freedom to pursue other trade avenues. If we hold fast that any one single solution is the destination then we are pitching half measures against the full formalised EU settlement which is not an argument we can win. The emphasis must be made that from such a position we are better able to influence not only single market rules but global trade rules by way of having independent powers of veto and be more agile by taking a more modern, pragmatic approach to trade agreements.

In this respect we can formulate proposals well outside the stagnant debates surrounding the options put forward in the Brexit debate - which the Yes campaign will not be intellectually equipped to argue against. The strategy must be to bypass the arguments they are prepared for. Whichever option we choose, by admitting the flaws - and that there are further stages to Brexit, we can skirt around the pointless and boring arguments that don't get us anywhere.

The bottom line is that each option ensures continuity of trade and, irrespective of the nitty gritty, the Yes campaign cannot deny that. The pitfalls are compensated for by the increased global influence and the new markets we open up. More work needs to be done to identify what those are and how we do that, but that is our starting point, rather than learning the talking points off by heart.

If we can do this and avoid the obvious traps, the Yes campaign arguments will crumble. They have stock answers to predictable engagements - so let's not give them what they are expecting.

Tuesday, August 18, 2015

Brexit: The task ahead


Returning to the subject of the EU referendum, there is a certain dishonesty in the Yes campaign's efforts thus far in attempting to frame the referendum as a liberals vs Ukip battle. That's actually quite astute politics because it's a battle Ukip would lose every single time. But it need not be this way. If at any point the No campaign gets it's act together, it should be easy to demonstrate that the EU, by way of it's very broken asylum policy, is not some liberal paradise but is in fact an extension of the Ukip protectionist fortress mentality - writ large for the whole continent. But we'll have to go one further than that if we want to win. 

The Yes campaign seeks to sow confusion in terms of what Brexit actually looks like. Their aim is to present Brexit as a leap into the dark where nobody knows what will happen, thus summoning the status quo effect in the final vote. Because no mainstream sceptic organisation has yet endorsed a Brexit plan, it is easy for them to deny the existence of one. That is our Achilles heel.

Of course readers of this blog will know we have put some considerable effort into producing such a plan but have yet to cut through the noise of the self-serving egos presently jockeying for position at the head of the table. We expect this to be resolved in due course one way or another. We believe the message is getting through. There are games at play already.

First and foremost the Yes campaign intends to spread doubt and confusion about the possible alternatives. We have seen this in action already. We were in early after the general election in promoting the Norway option as one option among many - but even we acknowledged it is no silver bullet. Central to our message is that the options on offer are only the foundation of a process. 

The critical part of our message being that whichever option we suggest, be it Norway, Switzerland or the WTO option, is far from ideal - but none are proposed as the final destination. We insist that Brexit is a process, of which leaving the EU, the political entity, is only really the start. 

We face something of an uphill battle in that the Yes campaign need only assert the usual FUD, however we have to communicate some fairly complex ideas in a campaign environment where attention spans are short. Just lodging the Norway option, and the notion that the EU is not the single market in the eurosceptic consciousness is something of a coup on our part. It's progress at least. It means that the more rational among us know that we're not going to be slamming any borders shut any time soon.

In establishing that Brexit is a process - and the alternatives are interim solutions, we can leave the Yes campaign to bicker about these options and we can admit to their shortcomings without hesitation. Defending one option against the EU as an idea is a debate we don't need to have and probably cannot win. 

We believe - largely as a result of promises made during the referendum campaign - there will be an absolute requirement to continue participation in the EU's Single Market for the short to medium term. The risks of leaving the EU largely pertain to single market access and without it the case for Brexit is a non-starter for British business.

Our side is also making arguments that participation in academic and research programmes will also continue along with continued involvement in other EU cooperative activities. That means we must avoid any spurious assumptions about our budget contributions. Vast savings are by no means guaranteed and there will be no shopping spree with any Brexit dividend. The Yes campaign can quite easily demonstrate that our budget contribution is not as large as it is perceived.

We also need to show that we will not undergo a huge political and diplomatic undertaking to be marginally worse off than before. Initially, as a means of ending our full membership of the EU, we see value in rejoining the European Free Trade Association (EFTA) and trading with the remaining EU member states through the European Economic Area (EEA). In what is a multi-layer fallback strategy, alternatives are available if this option does not prove viable. The situation is fluid and much depends on what Cameron presents at the last minute. It will shape many of the arguments we make - thus we must prepare for any eventuality.

As the adage goes, no plan of battle ever survives first contact with the enemy - and we should prepare for the possibility that we will lose some arguments and be ready to follow a different path where that be so. As Sun Tzu has it "As Military tactics are like unto water; for water in its natural course runs away from high places and hastens downwards... Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions. He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain."

That is the mentality we must adopt - with credible, rational and pragmatic answers. If we make grand promises built on intellectual sand, without the capacity to adapt,  we will be shot down in flames. Ukip's lacklustre election campaign showed us just how dangerous it is not to have policies and answers in advance of the battle. Ultimately we're not going to win this by playing Top Trumps with facts and figures, and political realities dampen many eurosceptic assumptions about what Brexit can achieve. The actual leaving of the EU is only stage one in a long programme of democratic reforms. That is what we must sell.

To my mind we need to show that the EU is a stunted, obsolete vision and that we can achieve better by being more nimble and more responsive on the global stage without being held back by procrastination and delay. Co-operation is good but compromise too often means everybody loses. 

We'll more likely win this with a metropolitan liberal vision than the grumpy old man act that we get from Ukip. We will need to inspire and offer an incentive, but also a roadmap. That is not going to be easy to communicate, but that is the task in front of us.

We must be prepared to surprise and wrongfoot the opposition at every turn and let them waste their resources rebutting arguments we're not actually making. Let them be the ones to look irrelevant. This is of course going to require some considerable soul searching from certain actors in the No camp. It will require a sea change in eurosceptic attitudes to more or less everything. We can take the high ground from them and make the opposition look like the dinosaurs but only if we take the initiative now.  

Central to this strategy, we must now lobby hard for those who have influence to up their game, change the old eurosceptic record, and push for certain outfits to stop banging on about immigration. It's a pity that we must fight our own side first, but we must if we expect to win this. It's the mushy middle we need to win over - and we need to persuade people who would never vote Ukip in a billion years. This is not going to be easy.

Friday, August 07, 2015

If we don't have a plan we will walk into every trap


Since the 2015 general election we have seen a flurry of referendum related activity. It has since tailed off as the news agenda settles back into the usual routine, but we have seen a microcosm of how the referendum debate will play out. We have seen how the opposition intends to run their campaign and the arguments they intend to run with. This exemplifies the need for creative arguments they are not prepared or equipped to counter.

The Yes campaign is familiar with the old Eurosceptic tropes as we are. They are well briefed to deal with them, they have establishment resources with to disseminate their meme driven case and they show little hesitation in bending the truth.

If you are reading this we assume you the reader are familiar with the case for leaving the EU. Much effort will go into reinforcing that case in the coming months, thus we are content to leave that to others. What concerns us is that leading the leading EU advocacy groups make the case we  eurosceptics have yet to offer a credible vision of what a post-Brexit Britain looks like.  

As it happens, this is something of a lie and such groups, namely Business for New Europe will seek to ignore any such submission. The respective emerging No campaign groups have badly dropped the ball in this respect. It is a matter of urgency that a Brexit plan be at the forefront of our efforts.

The Yes campaign will seek to present Brexit as a leap not the dark involving years of diplomatic and political effort to end up in a marginally worse position than where we are today. On a superficial level, they are absolutely right. There isn’t much of an incentive to leave the EU unless we can demonstrate the tough questions have been answered – and that we will be in a better position for leaving.

Thus, a careful analysis of how we leave the EU and the diplomatic avenues available to us is absolutely critical. Our alternative must be credible and workable. Without doing this groundwork we end up promoting flawed solutions that ultimately lose the argument. The Yes campaign will be well briefed to pick holes in the commonly suggested options, some of which may not even be available to us by the time we go to the polls. By then a new EU treaty may be on the table.

In this respect how we leave dictates much of the substance of the No campaign. For instance, should we promote ending free movement of people we then close of a number of workable avenues, forcing us into a cul-de-sac of limited options, all of which can be argued will leave Britain is a worse position.

We also believe that referendums are not won on a negative premise. Continued griping about immigration cannot be a central theme lest the No campaign be tainted by accusations of xenophobia and jingoism. The Yes campaign will seek to position itself as internationalist, liberal and modern proposition, and will paint No as a withdrawalist, isolationist position. If they succeed, the vote is lost. 

Consequently we are in a space race for the middle ground to win the progressive crown. How we leave then becomes central to the message and the tone of the whole campaign. For this reason we present Flexcit.

In Flexcit we examine in detail the alternatives to the EU, the pitfalls and the opportunities, but also present a new model of governance as an incentive to voters, encompassing direct democracy, real localism and a written constitution. We call it The Harrogate Agenda. Without a deal sweetener it will be difficult to ask the majority to take the gamble. There is also a strategic purpose to this. 

The No campaign cannot get carried away making false promises and raising expectations when all of the Brexit solutions require a degree of compromise and will not necessarily produce the results that many Eurosceptics expect. As we outline, Brexit does not give us complete control over our borders nor does it especially mean a sizeable reduction in regulation. Thus the campaign must be able to offer something tangible that could not be achieved as EU members.

In this exit plan we offer our analysis of the respective Brexit solutions, the most realisable option, the political realities of achieving it and the timing. As we outline, Brexit is a process rather than an event and leaving the EU is just the beginning of a long road to economic and democratic reform. The importance of the No campaign grasping this is paramount. It has massive ramifications for how the No campaign is conducted and unless we take an original approach we can expect to be bogged down in the same old tired and boring arguments and lose them. Flexcit is our secret weapon that gives us the edge. The Yes campaign is not equipped to handle it.

Saturday, August 01, 2015

The space race for the centre ground

History repeats

Written by Peter North

The rule of thumb in British politics is that he who controls the centre, controls the game. And that's why we're on a collision course to losing an EU referendum. The Brexit side is made up of curtain twitching conservatives, xenophobes, trade unionists. far leftists and hardcore libertarians. All intensely and uniquely despised. To look at our motley crew, any sane person would run a mile. We've got Owen Jones, Nigel Farage and sundry "right wingers". And then we have the "kippers". Why would anyone put their tick in the same box as these numpties?

We can see from these groupings where the fundamental schism is. There is a spectrum of opinion between the London cosmopolitan elites and the knuckle-scrapers of Ukip. What's clear is we're not reaching those in the middle. Jeremy Cliffe, columnist at The Economist, outlines the new political battlefield in a piece entitled "The case for cosmopolitan populism" where he outlines his vision as to what can be done to close the gaps. There's a few select sentences in this that will (and should) raise alarm bells, but you can see the narrative he weaves:
"Britain in the 1950s, even the 1970s, was in many respects a miserable, austere, petty, curtain-twitching, finger-wagging, stultifying place. That it is no longer so, and on many fronts is becoming even less so, should be celebrated.
He continues:

"...politicians and their supporters should do more to "weaponise" the choice between a drab, isolationist future for Britain and a cosmopolitan, prosperous one."

In essence, that will be the battleground for the EU referendum. Ultimately those most progressive vision is the one that will win out. When you look at our side we have all the stalwarts of that curtain-twitching, finger-wagging, stultifying Britain. The Ukippists and thier "pull up the drawbridge mentality" and the far left with their dogmatic resistance to progress. We're not even in the game when it comes to fighting for the middle ground.

Cliffe recalls that "One of the defining features of the recent general election campaign was its parochialism. At a time of great threats and bigger opportunities for the country beyond its shores, the wider world was barely mentioned. The assumption in Westminster is that doing so causes voters either to switch off or to switch party."

We can speak at length about this dynamic, in that our politics has become small and parochial. The politics of the world out there just doesn't resonate the the marginal constituencies that swing elections. But Cliffe notes that "there is a clear, patriotic argument to be made in favour of a Britain engaged on the world stage, that harnesses its diverse population and international links, that asserts itself in forums like the EU and the Commonwealth to advance the national interest".

If anything, general elections are a month long festival of domestic politics so that patriotic case doesn't get a look in, however, this referendum will be a year long battle over our standing in the world. That is where we will see that schism between the "cosmopolitan populism" and the claustrophobic world of Ukip. Thus the battle should be a space race to occupy the centre ground and present the most progressive and patriotic vision for Britain.

There is no way that banging on abut asylum seekers will win a referendum. There is no way the withdrawalist mindset can win. Nobody wants to go back to that "miserable, austere, petty, curtain-twitching, finger-wagging, stultifying place". The decider will be who makes the most convincing case that the other side are dinosaurs.

We have already made the case that with world has moved on from the quaint old EU ideas - and that the global model of trade has changed beyond recognition in ways that the EU has yet to realise. We need to sell the idea that the EU is essentially isolationist, withdrawalist euro-parochialism. The fences being erected in Bulgaria and Romania show that the EU mentality is that same curtain-twitching stultification writ large. It is the EU's own reluctance to engage in the realities of global displacement that we see people dying in the Mediterranean.

We need to go big on the idea of going global, being more open and more agile than the EU. We need to set out a vision of being a more welcoming and diverse place. That shouldn't be difficult to sell. There's a good reason why asylum seekers don't want to stay in France. It's an economically stagnant, racist and miserable country. Britain is way better than France and the world knows it.

Of all the nations adapting best to globalisation and this internet connected super-economy, Britain is leading the field. We're engaged in it, we're remodelling our whole economy and public services around it. Nobody is better equipped to deal with modernity than Britain. There is no going back to that quaint biscuit tin Britain, there's no holding back the tide of progress - so we need to embrace it.

While we are developing websites and internet services that are changing the world, the EU's contribution to it is an annoying dialogue box on every website telling us about cookies. If anything personified the EU's attitude to progress, it is that. We have a manifest destiny in the world, and while Cliffe thinks engaging with the EU is engaging with the world it isn't. The EU is a redundant middleman holding us back. We should be resisting TTIP and the likes not because of what they are, but the fact we can get a better agreements and faster by going global.

In all respects we can be more agile and assertive outside the EU and being in the EU is like trying to run a marathon with a ball and chain. It is they who are the dinosaurs, they who are the parochialists and they are the ones afraid of the future. The Ukip I remember under Alan Sked knew this, but today we see a small and petty Ukip, whining about helicopter safety regulations, foreigners with Aids and calling for the army to be deployed in Calais. It doesn't sound very progressive to me and, sadly, Tory Eurosceptics are little better. From where I'm standing it looks like we're going to lose hands down, and it's not difficult to see why. We should be in a space race to take the centre -  but we're retreating to the fringes.

Tuesday, July 14, 2015

Why we should oppose TTIP and leave the EU

Leftists are finally coming out of the woodwork to declare their euroscepticism. This in my eyes weakens the case for leaving the EU. When you have the RMT, Owen Jones and Ukip on your side it looks pretty grim. The leftist arguments are starting to merge with those of Ukip - not least in their opposition to TTIP.

As we have noted, opposition to the EU over Greece is wholly irrational, especially from the right - for whom it is also wholly inconsistent, but TTIP is something they both agree on. The chief complaint being Investor State Dispute Settlement (ISDS). But you can see why corporates would lobby hard for it. COSCO was heavily invested in the bidding process for Greek shipping ports and then on day one of Syriza's rule, privatisation of ports was taken off the table. Democracy is a volatile thing. Why a nation should not be held accountable for ripping up contracts I don't know.

It is said that the nature of ISDS courts and their secret nature would lead to corporate gouging of the taxpayer, which is a real concern - but what is interesting is that the left placed their insistence on it not applying to healthcare when it is a much more serious concern for infrastructure and defence. But such intellectually inconsistency is only to be expected from the left and Ukip.

That is not to say it is a not a genuine concern. Just because the left are anti-trade and broadly protectionist does not mean the right should be dogmatically in favour of TTIP. Anti-corporatism, or crony capitalism, is a cornerstone of libertarianism. It is a matter of fact that globalisation is happening, it brings enormous benefits to us and the emerging markets of the world and makes us all wealthier. A trade agreement between the EU and the US is going to happen in one shape or another and most of us will be better off for it.

The problem is that it lacks transparency and accountability. It isn't democratic. People we didn't elect will be making agreements that won't be challenged by the European Parliament, not least because MEP's are not intellectually equipped to even approach it. Especially not the fringe lunatics like Ukip. It's bad for democracy here at home too. In effect we're seeing the death of domestic politics as it has effectively outsourced most of the politics of substance. It's why we have government ministers debating whether or not teachers should have the powers to confiscate unhealthy snacks from children's lunchboxes. It's displacement activity.

These agreements are happening almost completely without national scrutiny and no right of independent veto. As much as this can mean more regulation (which is not always a bad thing) it mainly means regulatory convergence, which often means compromise - which too often results in a lowering of standards or a reluctance to regulate at all in the knowledge an agreement will probably fail.

What we need is our own voice at the top table table to ensure that we get the very best from such global agreements and that we can veto deals that harm our own standards. More than this, I want to see parliament re-energised and focussed on the stuff of consequence. More than this, while we expect TTIP will eventually get where it's going, a lot will have been removed from it. It will not resemble the original proposal in scope and depth. And that's actually a pity.

The problem with the EU is it's insistence on bloc trade deals applying to almost everything whereas Mexico has seen much faster growth in the automotive sector by a process of unbundling - ie industry and sector specific trade agreements which happen bilaterally and with fewer compromises. That is the future of global trade.

Opponents of TTIP oppose it from an anti-globalisation perspective - fearing a gradual global homogenisation and an erosion of democracy. The former complaint is pointless. Technology and progress demands globalisation. It is happening and it is a force of nature equal to gravity. So the question for my generation and the next is how we harness that force without sacrificing democracy.

There does need to be an ISDS mechanism. There is no good reason why any sector should be exempt from it either. Nor is it unreasonable for agreements to have conditions that demand structural and economic reforms as we have seen in Greece. But the EU is not the vehicle best equipped to manage this process. It needs to be more consultative and cannot be as the EU is where entire nations are summarily overruled - particularly in our case where we have nations that don't even have a car industry blocking trade deals that we would benefit from enormously.

The fact is that unbundled trade agreements are much faster to achieve, and more likely to succeed. As it stands TTIP has all but stalled, taking us back to 1992. Such agreements can take decades whereas a simple agreement on global standards for painkillers or wheelnuts is far more achievable - and it means areas where we have particular standards and concerns cannot be overlooked for the sake of expediency.

The world is developing in a different way to how the architects of the EU envisaged. Rather than large blocs forming sweeping agreements we're looking at inter-governmentalism and sector specific global trade associations. The model is incremental and tailored according to the development status of the participants. This is alien to the EU.

This is why there is an apparent intellectual inconsistency on this blog. I have welcomed Greek port privatisation on the behest of the EU but at the same time oppose mandatory land reforms and wholesale privatisation in Ukraine. Greece is developed enough and has had single market access long enough to (notionally) be able to carry off such reforms. It just doesn't want to despite having agreed to it. Ukraine and Poland however have some considerable distance to travel become they are economically and culturally able to full converge with the mainstream single market. A one size fits all approach, imposed all at once is simply not a good idea. Not in the region and not globally.

The removal of border tariffs and complaining about African protectionism may be free trade in principle, but it goes against the principles of international development. In order for there to be free trade there needs to be an equilibrium between trading systems - trading on like for like terms. Dismantling protectionist development mechanisms to pursue a dogmatic free trade agenda has been a disaster for Kenya, is damaging to Poland and may be catastrophic for Ukraine.

Outside the EU, we would have a good deal more power to put the breaks on the EU by vetoing proposals at the top table to prevent the free trade wrecking ball undoing efforts to nurture open up new markets.

It has been proposed this week that Britain should rejoin Efta, which is indeed part of the interim solution in that Britain would be a leading voice in Efta and a necessary counterweight to the EU at the global level. That is presently more influence than we have a subdued EU member. What we can then do is overtake the EU in securing unbundled agreements with the USA (and beyond) and achieve more than we could waiting decades for whatever compromise the EU can cook up.

TTIP represents the thinking of the last century in a world that is so much more dynamic. We are and always have been a global leader in setting standards and anything that reduces those standards is an unwelcome development, and anything that subordinates our parliament to the level of a local council is insufficient. Our own MPs need to be fully engaged in matters of trade and development but instead, because it's an exclusive competence of the EU, it's something we barely even discuss anymore. It's why the level of debate about trade in the UK is so lamentably shallow.

We can't stop globalisation, we can't have global trade without some kind of dispute settlement mechanism and we can't always expect there won't be losers as well as winners in any final agreements - but a system that progresses without consultation or consent is one that cannot survive. The future is a world of nations speaking as equals with fully engaged legislatures, not as subordinates of unaccountable blocs who outsource their lawmaking.

The case must be made for an assertive Britain leading the way for globalisation and making it work while keeping our democracy. The shallow and timid worldview of Ukip is not the solution, nor is the paranoid protectionism of the left, but the imperialism of the EU is obsolete, hubristic, anti-democratic, slow and in some cases dangerous. That is message the No-ists need to promote, otherwise we're stuck for another generation in a decaying and stagnant bloc with delusions of statehood. I'm not certain we can survive that.

Tuesday, July 07, 2015

Call it what you like, but it ain't democracy


The EU is not a democracy. The true definition of a democracy is that the power resides with the people. Not by any measure can this be said of the EU. For starters, nobody in the Commission was elected, MEP's have no right of proposal, and if all our MEP's voted together, they could still not avoid being steamrollered by the EU. That's not simply outvoted - that's systemically outnumbered. 1.2 MEP's per million people is hardly representation either. Some argue that the council of ministers is made up of elected people, but that's neither here nor there. In effect it is a government the people cannot remove. At best we can have a partial electorally mandated cabinet reshuffle.

But it's about more than just the structures and the processes. They could tweak it here and there but it would still not change the nature of what the EU is. The EU is an artificial construct in every way. In terms of a European demos (a people), there is no such thing. Hardly anyone can name political grouping in the European parliament and in most instances, unless there's a juicy drama like the Greek crisis, it is often second rate news or treated as foreign news. To all intents and purposes the EU is a government yet it is not reported as such. Pan-European politics doesn't exist.

There is no single common European identity, history or language either. The European demos is a construct that simply doesn't exist in the same way it does for a nation like the UK. We have an island story, a shared history, a common language, a national character and a shared identity. That's a demos. Whatever concoction the EU has fabricated is less a demos as a political partition.

You can't simply print some bank notes, create a flag and sing an anthem to create a demos. It's been tried before but it doesn't work. There is no EU demos on which to base a political union. It exists only in the imagination of a small minority of EU federalists. Even European elections are couched in terms of domestic parties - and serve mainly as an opinion poll on the national government and the EU as a whole. Hardly surprising then that the public in the main would return UKIP MEPs. The EU lacks legitimacy, the public knows it and the Euro votes are an opportunity to say so. They know that power without a demos is simply tyranny and a demos without power is not democracy.

Moreover, the EU has only ever come this far by lying to its peoples about what it really is. Even today the arguments against Brexit revolve around the three million jobs that supposedly depend on the EU. Course, as we know, the EU is not the single market - but rather than telling an outright lie, it perists in massaging public ignorance about the nature EU - which is effectively the same thing. The EU is happy to remain an obscure and fringe concern to national politics. If the public knew what you and I know, the No camp would be looking at an easy win.

But it's actually not good enough to complain that the EU is not a democracy. The notion that we should "reclaim parliamentary sovereignty" overlooks that it was parliament who did this to us in the first place. Maastricht ratification on occured on the back of threats, three-line whips and brinkmanship, in a parliament of politicans whose own mandates are far less that 30%. Not forgetting, without separation of powers, our entire parliamentary system is designed to secure the obedience of MPs. Why else would we have so may ministerial posts? 119 since you ask.

Even the Lisbon treaty was never put before the people - This the treaty that effectively abolished the entity we voted to join to establish something entirely different. This when 64% of people wanted a referendum on it and well over 50% would have voted to leave altogether. The treaty never went to a referendum and was instead carried by a large parliamentary majority. If that's what representative democracy looks like, I'd hate to see what it looks like when it's unrepresentetive. 

The purpose of a referendum is to secure legitimacy for decisions where Parliament alone can not secure that legitimacy. It can't in these such instances. With only small mandates, themselves in hock to an SW1 bubble mentality, MPs cannot be trusted with such extraordinary decisions.

But here we are, in an undemocratic political union, sold to us on a lie, rammed through with neither consultation or consent - at the fag end of a fading labour government. This is why this blog has always maintained that the UK is not a democracy either. Commentators confuse process and ritual and voting traditions with democracy. By definition democracy means that the people hold power, yet we rarely see any instance where the people wield power. 

Given how few powers councillors have and how restrained their decisons are by Whitehall and Brussels, it would be fair to say there is no actual democracy anywhere in the system. We have a benign managerialist dictatorship - and our occasional elections are little more than opinion polls. A change of guard seldom produces meaningful change. The charge that "they're all the same" isn't unjustified. They're not all the same, but the way the system is rigged, the outcomes are often the same either way.

By every measure that the EU is considered undemocratic (unelected commissioners etc) we must apply that same logic to our own system. After all, our own system resulted in a Conservative win primarily because of Ed Miliband's lack of personal appeal. Like it or not, parties are elected on the basis of their leader. But who actually voted for their own constituency MP? And who actually voted for the Prime Minister?

When it comes to more local concerns, we've been front and centre in the fight against wind turbines. We never wanted them, but were forced to have them anyway. It took ten years for the government to "allow" local councils final authority over them. But the fact such powers are gifted from the centre is yet more proof that the power does not reside with the people, thus by definition we are not a democracy. Similarly, with "DevoManc", as I understand it, Manchester is about to get a mayor it does not want to preside of a region that doesn't technically exist and nobody asked for. 

The accepted definition of democracy is that we have a vote once in a while, and somebody who is returned on less than a quarter of the vote is free to make decisions for us. One man or woman supposedly represents the hopes, needs and aspirations of seventy thousand of us. The Commons model is not all that far removed than when it was a talking shop for rich barons from the regions to discuss their own narrow concerns. That's ultimately why we argue that proportional representation won't make a difference. Representative democracy just isn't democracy at all. 

We believe that Brexit, while inherently desirable does not "restore democracy". We cannot restore that which we have never had. Thus Brexit is merely the first stepping stone to democracy. Being ruled from London is little different to being "ruled" by Brussels. In ether case we are still ruled and both are remote from the needs of the people they supposedly serve. Arguably London is further detached from us since SW1 culture is barely aware of anything outside its own self-referential claque. They genuinely see themselves as an elite.

It seems our first concern is to educate the public in what democracy is and what it looks like. If we can do this then they will conclude for themselves that neither Westminster or the EU is democratic and start demanding real change. Leaving the EU is only the beginning.

Sunday, July 05, 2015

The world has moved on from the quaint old EU


If you look at the latest package of DfID measures aimed at mitigating the migration crisis in Africa, we see a splurge in humanitarian measures of the type you're all fairly familiar with. You will see posturing politicians on Twitter announcing why this makes them proud to be British. It suits their vanity. Sadly they never stop to ask what happens when the money runs out. When you're adopting a sticking plaster strategy no money will ever be enough. You would think that a department for international development would know this.

But then it isn't just DfID who have a wrong-headed approach to aid and development. On the one hand we have the Ukip's of this world demanding a massive reduction in foreign aid and on the other eurosceptics who assume we can quit the EU and simply trade with the Commonwealth through free trade agreements. If only it were that simple.

Border tariffs are no longer the central obstacles to global trade. Global trade is more about the removal of technical barriers to trade, and negotiations are centred around regulatory convergence. Differing regulatory regimes create trade chaos, adding multiple layers of bureaucracy to the process. It is often said that less regulation would be good for business whereas what we need is more and better regulation shared by more partner nations. At the very least this eliminates the need for port inspections which leave trade open for theft, fraud and delays incurring demurrage and detention fees (over $70m annually in Ghana).

And of course if you have delays in the ports, you have long tailbacks, wage costs and warehousing capacity problems which halt production. In turn that results in the loss of contracts or damages a manufacturers credit facilities leading to bankruptcy and foreclosure. This results in a high turnover of companies popping up to service only one contact at a time with little in the way of business longevity, leading more and more untraceable fly-by-night companies exploiting the chaos, often introducing components into the supply chain which fail to meet international standards. The natural response to this is yet more inspections and delays.

To take one Commonwealth nation, Nigeria, it is said that the maritime industry alone could sustain the economy but not without massive modernisation. The road leading to the Lagos port, which handles nearly everything that Africa's biggest economy imports, is one of the most congested in a megacity whose traffic jams are legendary. Wide enough to accommodate only two lanes on either side, along it move the goods that Africa's top crude producer uses its huge oil receipts to buy - everything from designer wear to dried fish, champagne and shampoo. In the case of perishable or degradable goods from woodchip, coal through to foodstuffs it can result in a loss of of value or abandoned consignments.

And it's not just the roads that cause delays. Importers say that rules are not always followed, and officials can still hold back shipments while they await bribes. They've all got a scam going, from the man that wheels your trolley out to the senior customs officers. Nigerian authorities "inspect" 70 percent of cargo, compared with around 5 percent in the European Union.

Of course none of this actually matters if goods never reach their destination. Piracy is still a huge problem - and not just for Africa. Piracy has overtaken natural disasters as the leading cause for insurance claims in ASEAN states according to those in the marine insurance industry. While most claims are genuine there has been a disturbing rise in the number of ‘insider jobs’. Insiders may be members of the crew or even shipping companies themselves.

There is also the issue of antiquated dock equipment. For example, wood pellets exhibit two undesirable handling attributes. Due to multiple handling some pellets degrade back to dust which can block the cooling system heat exchangers resulting in engine overheating. The dust is also highly flammable and must be prevented from settling in the engine compartment. The implications of the loader overheating or catching fire extends far beyond the cost of damage to the machines.

Efficient unloading of wood pellets is crucial to maintaining a port’s schedule. Any delay means that a ship will miss tidal deadlines and incur additional high demurrage costs. An overheated conventional loading shovel takes 45 minutes to lift out of the hold in order to clean the heat exchangers and remove dust from the engine bay, then a further 45 minutes to put it back in. This has a significant impact on the productivity of the trimming operation so having the right wheeled loader is critical.

Then we get to regulations. Here is an illustration. Back in May, Chinese customs stalled Australian and South African coal deliveries that exceeded fluorine limits under the country's new quality regulations. Australian 5,500 kcal/kg thermal coal was sold to a Chinese cement producer and is understood to have been rejected by the local inspection and quarantine bureau. The cargo was later redirected to a buyer in Taiwan, and the South African 4,800 kcal/kg coal was sold to a Chinese trader but underwent a third round of inspections after failing the first two checks.

China's main economic planning agency the NDRC mandated that coal imports must meet quality standards for five trace substances - with mercury content of less than 0.6 microgram/gram (µg/g), arsenic below 80µg/g, phosphorous below 0.15pc, chlorine below 0.3pc and fluorine below 200µg/g. These are in addition to restrictions on ash and sulphur content of a maximum of 40pc and 3pc, respectively. The quality regulations took effect on 1 January and have raised waiting times, which have in turn increased demurrage costs and the risk of rejection at ports.

The rejections trigger a fresh wave of concerns in the Chinese import market. Buyers will take responsibility for the coal, because they are likely to have bought the cargoes on a Free On Board basis. While they have sought to minimise risks by requiring suppliers to offer guarantees on the five trace elements on a loading or discharge port basis, China relies on its national standards for the quality checks rather than the widely used international ISO and ASTM standards.

Many of the major testing agencies in Australia and South Africa do not offer checks based on the Chinese standards, although tests for China's standards are available in Indonesia with costs of 20-25¢/t already factored into prices. In addition, the longer shipping journey to China from Australia and South Africa will probably result in some coal quality degradation.

Here there is a clear need for a memorandum of understanding between these trading nations, agreeing to one standard and one inspection regime to facilitate trade. That in itself is no small undertaking. The introduction of such an agreement in a package deal (like TTIP) means that if one article fails to reach agreement, the whole package of measures are dropped. When a market as large as China is starting to make regulatory demand of its own for imports, there has never been a time where international agreements were more necessary. But they are not happening between the EU and China but between regulatory commissions and authorities at the level above.

Just securing an agreement with Japan's automotive industry to join United Nations Economic Commission for Europe (UNECE) would eliminate much of the regulatory divergence in the automotive industry. A comprehensive "trade deal" between the EU and Japan then becomes largely redundant. If we can work toward a similar agreement in electronics then again the EU is totally irrelevant.

Similarly the The International Air Transport Association (IATA) and (UNECE) has signed a Memorandum of Understanding (MoU) to strengthen their support to developing countries seeking to implement the World Trade Organisation (WTO) Trade Facilitation Agreement. All the bluster about the EU negotiating with other blocs is a mentality belonging to the last century, with global trade bodies now securing their own interoperability frameworks, leaving the EU far behind.

What this points to is the need for independent nations to be in at the very top tables arguing the case for the industries they have rather than taking a back seat and waiting to see what what compriomises the EU can come up with, in a bloc where nations will vote through measures affecting industries not even present in their own states.

Were we to leave the EU, we would be in the almost unique position of having first rate infrastructure, favourable trading conditions with the EU but also the freedom to negotiate individual deals that make our own industries more competitive. Our car industry may depend on it.

The future points to a model of aid for trade by which we invest not in schools and drinking wells in the middle of the desert, but in ports, roads and security. If we are to have a statutory minimum spend on aid then some of our defence spending in policing shipping lanes could very well count toward that to ensure goods get to market. In pooling our sovereignty and delegating trade to the EU we miss opportunities and fail to get the agreements we need.

Superficially, favourable tax regimes and low tariffs look attractive but the reality of trade tells another story. Multinationals can easily decamped from advanced nations in search of lower overheads and favourable tax regimes only to find the level of under-development and corruption is an overhead in itself.

As we can see, merely eliminating trade tariffs (which is not always desirable) is not enough. There is a long road to travel before we get anything like functioning global trade. In some cases, import bans are essential to helping grow key industries. Ghana has banned imports of Tilapia fish, estimating the ban will create about 50,000 jobs in the aquaculture sector of the economy, where young unemployed persons are being targeted. There's an immigration target met right there. Such industries are needed to stimulate a tax base so that African states are more dependent on the revenue from their peoples than oil giants. This is one example where EU "free trade" conflicts with other desirable global outcomes.

A humanitarian aid effort does nothing to mitigate the need for migration and slowing the flow is not going to come cheaply. The EU's answer is to put up fences and mount aid operations. It doesn't work. What we also don't need is the EU ploughing into Africa pulling down tariff barriers (as it has in Kenya) - and rather than package trade deals between blocs such as the EU TTIP, we're better off going for individual agreements targeted as specific industries, which are not only more effective but can be agreed upon in much shorter time frames resulting in more rapid dividends.

What is clear on both sides of the Brexit debate is that on matters of trade an international development we are not even past first base in the level of understanding. It's pitiful. Understanding all of this is essential to tackling the multifarious problems we face, not least immigration and asylum, and yet they're stuck in shallow debates about TTIP and trading blocs, blissfully unaware of how irrelevant the EU is to the process.

In reality, UNECE is the single market and the gateway to globalisation, yet it is seldom mentioned or monitored. The Brexit debate is mired by a little Europe mentality on both sides, to which the concepts we are talking about hereabove are entirely alien to them.

What is at stake here is the opportunity to add trillions to global growth, while solving many of Africas most acute problems and many of our own in the process. Meanwhile from the EU we get compromises, half measures and yet more vanity aid, while failing to address the very real and pressing issues - many of which are caused by the fundamental flaws in the EU's own DNA, along with its trade psychology that belongs to the middle of the last century.

Brexit offers us a real opportunity to to step into the modern world of globalised trading and to drag Europe kicking and screaming along with it. The federalist dream is dead. The global dream is only just beginning and we're not even in the game.

We may lose our car industry if we don't quit the EU


We've heard a lot from various vested interests about the implications of Brexit on the British auto industry. Firstly it's important to understand the nature of the car industry before wading in. Like most expensive consumer items, the actual profit comes not from the product itself but the finance deals. In essence, a car is credit bait. There is little profit in selling a car for the sticker price. Average monthly dealership profits can be as little as £15k and often make losses.

It is therefore incumbent upon car manufacturers to increase profitability by optimising supply chains and cutting down labour costs.

What we're hearing from the political class, from their position of ignorance, is that Brexit could result in tariffs of up to 10% on the finished product - which could result in manufacturers quitting the UK. Given the size of the market, it seems implausible that the EU would be so keen to shoot itself in the foot, but let's suppose they're right and they add 10% to our exports. We can live with that.

As you all probably know by now, trade negotiations are an exclusive competence of the EU. The EU negotiates our trade deals for us. The EU has agreements with dozens of nations, but still applies tariffs to imports from non-EU countries. Because the EU likes old fashioned trade packages like TTIP, encompassing dozens of industries and products, the results are often less favourable than if individual agreements on certain products and markets were unbundled. That means if the EU gets a bum deal, we get a bum deal.

That may be no big deal to those member states who don't import certain components, but that's a sticking point for us since we have a thriving automotive industry. Since we can't veto a bad trade deal, politically or practically we put up with what the EU can get for us. Europhiles insist that we don't have the clout without the EU but in reality sovereignty pooling leads to collective impotence.

We have seen in recent years a departure of the US automotive industry to Mexico which trumps the US on free trade. It has agreements with 45 countries, meaning low tariffs for exporting those cars globally and favourable deals on the import of components, for which both the US and the EU have protectionist barriers on.

We could do precisely the same outside the EU. It would at least mitigate the 10% tariff and best case scenario increase the profitability of the industry attracting yet more assembly lines. Far from losing our automotive industry if we leave the EU, given the EU's fixation with packaged trade deals with other trading blocs, we might well lose our assembly lines if we DON'T quit the EU.

Already we have seen the industry decamp to Eastern Europe to cut down on wage costs, but these savings won't last long as wage demands will eventually catch up to the rest of the EU. Given the Euro's woes the next move is for the entire industry to quit not just the UK but the EU entirely.

What we need is the flexibility and sovereignty to agree our own specific unbundled deals tailored for the industries we have. Not least because such agreements can be reached inside a couple of years, whereas deep and comprehensive trade agreements and association agreements can take up to sixteen years to negotiate. In an increasingly globalised world, moving ever faster, the quagmire of the EU is unsuited to today's markets. It's a last century system for an internet connected world. It harms our competitiveness, reduces our influence and inhibits industry growth.

The scaremongering about Brexit is not only unjustified but also primarily influenced by people who don't actually know very much about supply chains or global trade. They are locked into a belief system that says only vast trading blocs can deliver prosperity. Mexico is busy proving them wrong. And so can we.

Tuesday, June 30, 2015

UK democracy: everything's fine until it isn't.


Persuading people of the need for radical change isn't easy. The truth of it is, the status quo just isn't awful enough for people to take a risk. If we listened to the left wing you'd genuinely think Britain was a failing state with massive levels of homelessness, destitution and poverty. That was Labour's whole message during the election. The reason they didn't win is because most people know it just isn't true. Life is hard for some but poverty in this country is usually only temporary except when reinforced by welfarism.

We haven't seen much in the way of radical welfare reform aimed at tackling this, but in the end the gesture politics of welfare reform seem to be working after a fashion and it turns out just small tweaks accomplish a great deal. None of it really goes far enough for my tastes. I still think we have an inherent culture of state dependency. But again, it's hardly something worth going to the barricades over.

The left have a really hard time selling us the idea that we're in poverty and destitution and the left seemingly have little to offer but for the same tired socialist ideas or merely a repeat of Blair's so-called "social amelioration" (fire-hosing borrowed money at the poor to you and me). It didn't solve very much. The left are beginning to wake up to the fact that they lack economic credibility. That's why I believe Liz Kendall is the only leadership contender who can prevent Labour being wiped out entirely. But that's all she can really hope to do without any fresh ideas.

It's a fine thing to talk about localism and restoring powers to as many people as possible, but that's a little difficult when everything from fishing and agriculture to waste disposal and energy is dictated by the EU. No council will ever depart from boneheaded recycling schemes in favour of landfill (aka land reclamation) because that power is not within their gift - and is not within the gift of Westminster either. All councils can do is execute their duties within a strongly encoded framework.

Unless councils are sovereign entities the position of counsellor is largely for decoration. I've met a number of now ex councillors, all of whom entered local politics with ideals of public service and reform, only to be confronted with an immovable behemoth that resists reforms, where long standing incumbent councils close ranks to prevent any meaningful change. The notion that we have any collective power over our local authorities is risible.

The slow agglomeration of police forces is a wholly unwelcome development and the scale of councils means money is always concentrated on the district with the most urgent need, at the expense of everywhere else. The idea that money raised locally is spent locally went out of the window years ago. If you pay council tax in Ripon, it's likely to be spent in Harrogate.

All of this has happened very gradually, where local services have amalgamated for their own convenience rather than ours, each headed by officials on gargantuan corporate salaries. Almost everyone is opposed to this development, but councillors haven't been able to stop it. In this the public have been fairly passive. There is a certain apathy about us, but that is a learned apathy.

We're now used to the idea that if you write to a councillor or an MP you won't get a reply. And if you do it's a corporate-speak brush off. From the police to social services to the NHS, where complaints are concerned there is a culture of hostility, defensiveness and denial. You then enter the "f*ck off loop" whereby you're shuffled between departments until you get fed up and go away.We simply resign ourselves to the fact that our lives can be  impinged upon by the state and there's nothing we can do about it. Those who try are harassed and bullied by the courts and end up with crippling legal fees and no justice.

The same is true when dealing with corporates too. It's the same when changing your energy supplier or trying to cancel a phone contract you don't want. Everything is bait - and once they have your name on the dotted line, that's it, they can ignore you. Meanwhile, we're creating a status of second class citizen without access to credit. If one of these corporates asserts you owe them money, through mass mechanised corporate scale abuse of the county court system, they can blacken you name for a decade - with no right of appeal - unless you can afford it.

Which brings us on to the justice system. Actually, don't get me started, we'll be here all day. The short of it is that justice is only for those who can afford it. And if you're up against the mechanisms of councils and the state, you can forget about justice altogether. The police and councils investigate themselves and find themselves free of fault.

On a day to day basis, the benign managerialism of the UK works quite well. If you are obedient, pay what you're told, when you're told to pay it, never ask questions and never demand justice, things are fine. Better than ever. But when you ask for what you've paid for, you won't get it. When you need protection you won't get it. When you want justice you won't get it. What you will get though is an ever larger tax bill.

Until we have real democratic control over our councils and Westminster, we will continue to drift toward corporatism where everything is decided before it gets as far as Westminster - and if a law made at the very top level of global governance kills your business, well, that's just too bad.

While I am a euroscpetic, as much as I resent Brussels rule, I resent London rule just as much. London likes to think it is the engine of the economy, but it is the regions that supply it with our young and vital people. In that respect, London is a parasite that sucks the vitality out of brilliant cities like Liverpool and Newcastle. The media follows power thus culture follows and that's where our young people want to be. The result is that London has become its own country while the rest of the country stagnates. Through boom and bust, Bradford house prices have remained more or less static.

What we get from the Tories is the promise of a Northern powerhouse, but what it is in effect is a Northern super-quango, imposed upon Manchester, which like the Scottish parliament will suck more and more powers and budgetary controls away from councils. It is a perversion of the word devolution. We also now learn that rail developments in the North have been shelved. One thing we Pennine folk know all to well is that cross Pennine travel sucks - and always has - but London always gets what it wants. It's little wonder many Northerners want the SNP to succeed with Scottish independence and take the North with it.

Meanwhile we are governed by an entirely self-serving SW1 claque who are in thrall to the fashions and groupthinks of the Westminster bubble - who see themselves as an enlightened elite - who don't trust people with the power to run their own affairs. The only thing that matches their stupidity is their arrogance. A toxic combination. 

What we need is real devolution and to shift power away from London. At the very least, Parliament should move out of London. London can survive without it. Why are we cramming more houses into London when Liverpool is turning into our own Detroit?

Under the surface, everywhere we look we're being short changed and ripped off. All the left can offer is the old dogmatic mantras about re-nationalisation - as if the people ever wanted nationalisation in the first place. Our public amenities used to be locally owned and locally controlled corporations. They were stolen and sold off. Now they are merely obscure features in the assets column of a Shanghai hedge fund.

The danger of keeping utilities publicly owned was that government would use them as a means of keeping people unproductively employed to the point of bankruptcy. The railways were famous for over-employing. But that is no longer a danger in most instances. A small CHP plant providing power and heat for  large urban area can run on its own with very little human intervention. Why should these things not be community owned? Why should districts not choose their own energy policy? Why should we wait for an EU directive only to have it gold-plated by Westminster and imposed on councils covering massive areas, encompassing several towns in some cases? Why does Keighley answer to Bradford?

Socialism as we knew it is dead. But that does not mean we have a new age of free markets. What we have is corporatism both in consumer markets and local and national government. We can't afford to renationalise even if we wanted to. But we can use the mechanisms of the market to re-municipalise those things which should be under public control. But this would require the one thing that London is most afraid of: Democracy.

Liz Kendall can talk all she likes about returning powers, but such is not in her gift until the left can end their unquestioning devotion to the EU. If we want a radical overhaul of our services and how we are governed, then it must start with Brexit. History is replete with examples of power gravitating toward the centre, holding regions and nations together against their will. In every instance it has failed - and ended in collapse, poverty and war. Now we see the EU pulling in different directions and our serpentine Prime Minister conspires to keep us in at all costs - with no opposition from the party that supposedly represents the workers.

I will throw my vote to anyone who wants to get serious about real democracy. But until I see a mainstream party make the case for leaving the EU and governing for all, not just London, I'll know they're not serious about reform.