Economists and Brexit

Referendum – 22 days to go

If you are not registered to vote – you must register by 7th June 2016

You can register on line – click here

FT Poll Tracker: Remain 46% – Leave 43%  =  Don’t Know 11%

William Hill Odds:  Remain: 1/5  Leave: 7/2 -long shot:  Scotland Vote Leave: 10/1

The City of London – Hedging Brexit – Post Brexit Travel

The Financial Times reports that Hedge Funds and Investment Banks are paying £500,000 or more for private polling on Referendum Day.  Apparently a private poll as lawful as long as it is not published before the polls close.  The private polls will give advance knowledge of the likely impact on the exchanges.

A significant move in sterling is awaiting  the result of the vote, with a modest rise expected if Remain wins and a sharp drop anticipated if there is a vote for Brexit.  The Guardian reports Goldman Sachs as estimating that Sterling could lose 20% in value if the UK votes for Brexit.

In other words: (1) a vote to leave will help the fat cat speculators of the City to make a killing, and  (2) if you are planning a holiday abroad later this year you may find it more expensive.

This Independent page tells you how much you have lost since the start of the year and how you might take steps to guard against losing more.  This Telegraph page – What leaving the EU could cost travellers also provides a lot of useful information for future travel post Brexit.

This Financial Times page  sets out in some detail how Brexit will affect the City which is today the premier market for the whole of Europe – but is likely to be significantly weakened if the UK leaves the EU.

While he was Mayor of London, Boris Johnson appointed an economist  on the Mayor of London’s payroll.  That gentleman, Dr G. Lyons,  is now one of the economists working for Vote Leave.

The  GLA has published a Draft Economic Evidence Base 2016.  (Warning:  the document has 402 pages) and there is quite a lot of other material around setting out the importance of the City of London as the most important financial centre in the EU.

The Economists for Brexit have published a pamphlet setting out the Vote Leave Economic Case.  It has 45 pages of which just 3 pages (21-23)  are by Dr Lyons and which assure the reader that everything will be OK in the event of Brexit.    The Financial Times has published an article entitled What are the economic consequences of Brexit? which may assist in evaluating the bland assurances of Dr Lyons and his friends at Economists for Brexit.

 

A warning slightly adapted from cigarette packs might be appropriate:

Brexit Can Seriously Damage your Wealth!

 

 

 

Britain Stronger in Europe

Referendum – 23 days to go

If you are not registered to vote – you must register by 7th June 2016

You can register on line – click here

FT Poll Tracker: Remain 46% – Leave 40% 

William Hill Odds:  Remain: 1/5  Leave: 7/2 – long shot:  Scotland Vote Leave: 10/1

It was good to see David Cameron (Prime Minister)  and Sadiq Khan (Mayor of London) campaigning together for the Remain Vote at the launch of the Britain Stronger in Europe battle bus. The Mayor said:   “There are many things on which the prime minister and I will disagree. cameronkhanBut what’s really important is when it’s in Londoners’ interests for the mayor and the government to work closely together, we will work closely together.”   He went on to say:  “More than half a million jobs” in London depend on the UK’s membership of the EU, adding: “A vote for Remain means jobs and opportunities.  Staying in the EU means more measures to fight climate change, workers’ rights protected and more rights for women.” He urged young people to get involved in the referendum and register to vote.

The Prime Minister said:  “I’m proud to be here with the Mayor of London – with the Labour Mayor of London – on this vital, vital issue.”  He hailed the fact that “someone who is a proud Muslim, a proud Brit and a proud Londoner can become mayor of the greatest city on Earth. “That says something about our country”.  The Prime Minister  said he expected many disagreements with the London Mayor but they were both part of an incredibly broad campaign in favour of EU membership.

The two men unveiled a “five point guarantee card” listing what voters will get if they vote to Remain on 23 June.  The card promises “full access” to the EU single market, protection of workers’ rights, “a safer Britain” with co-operation with other EU states, the UK keeping its “special status” within the EU, outside the euro and the Schengen passport-free area and with an opt-out from the EU’s aim of “ever-closer union” and “stability”.

Let’s hope this at last marks the start of an effective Remain campaign.

britain-eu-politics It’s been bad enough seeing the UKIP bus driving around the Country blaring out the music from the Great Escape much to the annoyance of the Composer’s family.  [Peter and Greg Bernstein said in a statement to The Observer newspaper: “Our father would never have allowed UKIP to use his music because he would have strongly opposed the party’s nativism and thinly disguised bigotry].

Brexit BusBut to make matters worse, for some time now we have seen the Brexit Bus (complete with Boris the Tory Traitor and his familiars) spreading the Tory Traitor version of Brexit propaganda much of which is highly questionable and the Remain campaign is only now getting into the battle for hearts and minds.

Who knows how all this is going to pan out.    What is certain is that there are those within the Conservative Party who are determined to oust David Cameron – whatever happens.  See this report by the political correspondent of the Guardian:  Conservative party turmoil escalates with open call for Cameron to quit.  In essence,  a great deal of political turbulence is likely to follow this Referendum – no matter what the result may be.

 

 

 

 

 

 

 

 

Vote Leave Switches Tack

Referendum – 24 days to go

If you are not registered to vote – you must register by  7th June 2016

You can register on line – click here

Financial Times Poll Tracker: Remain 46% – Leave 41% – Don’t Know 13%

William Hill Odds:  Remain: 1/6  – Leave: 4/1 and for a long shot:  Scotland Vote Leave: 10/1

The Gove/Johnson Letter

gove2The Poison Dwarf (Gove) and  The Clown (Johnson)  have written an open letter to the Prime Minister published in the Sunday Times (behind a paywall) demanding that he ditch his manifesto pledge on net migration.

In one respect the letter is bogus.  A Conservative Manifesto is not a personal statement, whether of of the Prime Minister or of anyone else.   It is the product of a committee drawn from and consulting with the Westminster MP’s.    It is the Party’s manifesto.

Therefore, since Gove was a Secretary of State and a Member of the Cabinet, he can hardly complain about the Party Manifesto for which he had collective responsibility and  on which he stood for election.

Boris_Johnson_July_2015Of course, in a factual sense, Gove and Johnson are right.   For so long as the UK is a Member of the European Union, the Free Movement Rules apply to EU Citizens and their dependants.  Therefore the  circumstances where admission of an EU citizen to the UK can be refused or withdrawn are limited by those Rules.

Gove and Johnson knew that net migration targets can only apply to non-EU applicants and they must be taken to have known this at the time the Manifesto was produced.

This letter is nothing more than a fairly outrageous piece of propaganda produced by the Vote Leave campaign and,  as discussed below, it perhaps heralds a switch in tactics.

Migration and free movement are not new concepts.  When the two Crowns of England and Scotland were united, a consequence was that Scots were entitled to come South and work.  As a Scot, Gove should be well aware of the longstanding free movement complaint in England:   “Hadrian built the Roman Wall, to keep the Scottish out.  But he did not build it high enough, or wide enough or thick enough – and look at us today!”   There is something to be said for appointing Gove as Secretary of State for Scotland (residing IN Scotland)  after the Referendum

Economic Case

The Observer has a strong story which is worth reading in full:

 Economists overwhelmingly reject Brexit in boost for Cameron

“A poll commissioned for the Observer and carried out by Ipsos MORI, which drew responses from more than 600 economists, found 88% saying an exit from the EU and the single market would most likely damage Britain’s growth prospects over the next five years…..A striking 82% of the economists who responded thought there would probably be a negative impact on household incomes over the next five years in the event of a Leave vote, with 61% thinking unemployment would rise.”

The Andrew Marr Show

All of this news was discussed on the Andrew Marr Show this morning and if you missed it, it is on the BBC I-Player and it well worth watching.

The Journalist, Amanda Platell, was on the show.   She explained that the Vote Leave campaign had had a meeting and decided to switch tack to the Immigration because they had realised they had lost the economic case for Brexit.  She thought this was a pity because Vote Leave had not wanted to campaign on the UKIP case.  Liam Fox MP (who supports Vote Leave) followed and agreed that the Party manifesto commitment to reduce net migration to the tens of thousands was not one that could have been met. (Yet, of course he too had campaigned on that manifesto).  However, some of what he said was sensible.

Thoughts on the Post Referendum Approach

Andrew Mitchell, who was formerly a Conservative whip, has a sensible article on the Conservative Home blog.  It concludes with this:-

“We were elected last year as a progressive One Nation Government. The result came as a joyous surprise to many of us. So after the 23rd, our constituents will expect – nay demand – that we pursue with vigour policies which promote social mobility and cohesion and make consumer capitalism work for the many. Quite apart from reducing and eliminating the deficit, we must chart our country’s passage through the sea of international turbulence and misery which is the Middle East – with all its consequences for Europe and for Britain.

It is not necessary to look in the crystal ball to define the consequences for our Party forming a circular firing squad and continuing to obsess about the European Union thereafter. We did it in 1992, and it was 23 years before we next won an election. The electorate on this occasion will never forgive us if we behave as we did then. And they will be right.  Those of my Parliamentary colleagues who feel the temptation to do otherwise should go and lie down in a darkened room until the feeling passes.”

That seems to be good advice.

Senior Citizens & Brexit

Referendum – 25 days to go

If you are not registered to vote – you must register by 7th June 2016

You can register on line – click here

BBC Poll Tracker: Remain 44% – Leave 38% – Don’t Know 18%

William Hill Odds:  Remain: 1/6 Leave: 4/1 – for a long shot:  Scotland Vote Leave: 10/1

Senior Citizens and Brexit

Euro-Ref_INFOG-SAGA_240516_FINALI live in one of those London boroughs which is split down the middle between a Labour voting Inner London half in the South and a Tory voting Home County half to the North.

The  people of my age in the southern half  often have to go  to the north side – for example to visit  outpatient clinics at a local hospital where we have time on our hands in the waiting areas.

Of late the chit-chat has been on the subject of this referendum.  It seems that many of my group intend to  vote according to their party affiliation. One disabled lady told us  that she always votes Labour but that she tells the Conservative canvassers that she is going to vote for them.  She explained:  “that way they send a car to take me to the polling station which means it can’t be used to take someone who might vote for the Tories!

A rather cross retired bank manager  on the same post CABG course that I am taking said:  “It is a disgrace that people like us are being asked to vote on a matter which is way outside our expertise.  I think I shall vote “Remain” but it is a disgrace that this question has been put to a referendum as a sop to UKIP-leaning members of my  party. I believe in democracy but a parliamentary democracy.  Plebiscites produce dictators”.

Another lady said that she had usually voted Conservative – especially for nice Michael Portillo – but she was minded to vote “Leave” because she thought Boris Johnson was nice.  She was worried about Michael Gove. “He’s a nasty piece of work”, she said.

Someone else said  “How clever of Boris to weigh up all the options before deciding which was best  for his career.”   He was quite shocked when I told him that dear Boris had been concocting Brexit evidence at the expense of GLC Tax payers while he was Mayor of London.

Saga Referendum Survey

Many pensioners  are involved with Saga – for the holiday brochures, the travel insurance plans, the UK breaks and very much else.  Saga conducted a Saga Populus poll of 8,650 over 50’s earlier this month.  The figures show that the over 50’s are much more likely to vote in the Referendum –  93% of over 50’s will vote but only 76% for the 18-49 group.   While a majority will vote to Remain in Scotland, Northern Ireland and Wales, a majority of English over 50’s intend to vote Leave, particularly in the 60-80+ bands and among men rather than women.

Pensioners Should Vote Remain

We obtain many benefits from membership of the EU.  We can travel and go to live in warmer climes.  We get reciprocal health benefits.  We can get local social assistance on the same terms.  And we should think of our grandchildren.  They will enjoy freedoms and opportunities we did not have.  No more “Fog in the Channel – the Continent is cut off“.

 

 

Spats over Statistics

 

The Treasury Select Committee has published a report on the claims of the Government and the Remain Campaign and of the Leave Campaign.  The Report can be read on the Parliament Website.   Commenting on the publication the Committee chairman said:

“The arms race of ever more lurid claims and counter-claims made by both the leave and remain sides is not just confusing the public. It is impoverishing political debate. Today is the first day of the main campaign. It needs to begin with an amnesty on misleading, and at times bogus, claims. The public are thoroughly fed up with them. The public are right….”

The Committee found that Vote Leave’s core campaign number – the idea that leaving the EU would give the country a £350m a week fiscal windfall to spend on hospitals and schools – is “highly misleading” £350m a week, and the suggestion that this money can and should be spent on the NHS, decorates Vote Leave’s “battle bus”. The Committee found that Vote Leave’s persistence with this claim is “deeply troubling”.  There were also criticisms of the Remain campaign.

In part 7 of the Report the Committee was very critical of  two Vote Leave witnesses:-

 “In their treatment of this Committee, neither Mr Elliott nor Mr Cummings, as individuals, have fulfilled Vote Leave’s commitment, made in their successful application to the Electoral Commission, to“create a valuable legacy for the UK’s democratic process”.  Their conduct has been appalling.  Mr Elliott’s and Mr Cummings’s expressed view that powers should be restored to Parliament sits ill with that conduct.”

The pair certainly seem to have upset the Treasury Select Committee.

Matthew Elliott is the Chief Executive of Vote Leave and ran the successful  referendum campaign against the Alternative Vote proposal.

Dominic Cummings is the Campaign Director and a former special adviser to Michael Gove.  He also has “form” as a paid up member of the Nasty Party.

Andrew Gimson wrote of him on the Conservative Home blog:

“Quite a few people consider Cummings to be a complete liability. Andy Coulson, the former director of communications at Downing Street, forbade the employment of Cummings by Gove when the Tories came in to government in May 2010, and managed to keep him out until the end of that year: for Coulson knew Cummings would disobey orders issued by him and others from the centre. Craig Oliver, the current Downing Street director of communications, detests Cummings. Various journalists who have crossed swords with Cummings loathe him. One of them assured me he would never trust Cummings. There is a school of thought according to which Cummings could prove as damaging for the Tories as Damian McBride was for Labour.”

 

 

 

Pensioners

BBC Poll Tracker: Remain 44% – Leave 38% – Don’t Know 14%

William Hill Odds:  UK Remain: 1/6 UK  Leave: 4/1  Scotland Vote Leave: 10/1

By the Way

The Public Accounts Committee of the House of Commons has just published a devastating report on the state of our Criminal Justice System.  Just about every lawyer in the system can confirm this and the situation of the Civil Justice System is just as bad.  Why is this relevant to the upcoming referendum?   Simple. The principal  Gove3idiot responsible for this state of affairs  is  the  Secretary of State for Justice Michael Gove who has been far too busy with the Eurosceptic Vote Leave campaign.   It was a terrible mistake to combine the ancient office of Lord Chancellor, whose  role goes back to a time before the Norman Conquest in 1066  with that of Secretary of State for Justice.  It should revert  (without any judicial function) to the House of Lords.   All that the combining of the office with the Secretariat of State for Justice has achieved is to enable Gove (aka the Poison Dwarf)  who (thank God) is not a lawyer and still less a Judge,  to ponce about in the robes of one of the most ancient offices of  state.

Purdah

As of today the Civil Service “purdah” rules relating to the referendum campaign period come into effect.  The Treasury got a last “project fear” announcement just under the wire with a warning that millions of current and future pensioners will be worse off if the UK leaves the European Union.  The Treasury analysis suggests that Brexit would cause inflation to rise, eroding the value of state pension increases, costing recipients £137 a year.   According to the report those with an additional pension pot worth £60,000 would see its value drop by £1,900.   The Treasury people are probably right. Whether it was necessary for this to go out at the last minute before the deadline must be questionable. Old age pensioners (and your writer is one) know only too well what inflation can do to what we have to live on.

EU for Pensioners

retiring-to-spain-770x370Most of us pensioners know the benefits we obtain from citizenship of the European Union – including freedom to travel and to reside anywhere in the EU.  We know how we benefit from the European Health Insurance Card and how it can be supplemented by insurance cover.  We can get some local social security benefits.  And the cost of living can be significantly cheaper.  Seniors are in many ways better treated in some EU states than in the UK.

By and large it would be madness for us pensioners to Vote Leave even if we only take a trip abroad in the EU once or twice a year.

 

Post Brexit Economics

Yesterday’s post was about one of the two Chairs of Economists for Brexit, Dr Gerard Lyons who previously worked for the Mayor of London (Boris Johnson) and who published a report concluding that the best option for the UK was to remain in a reformed EU.  Now let’s look at the other Chair, Professor Patrick Minford who teaches at Cardiff University.  He is one of the few UK followers of the Milton Friedman school of economics.

According to the Economist, In March 1981, 364 eminent British economists published a letter to Margaret Thatcher in The Times condemning her plans to hike taxes even as her monetarist attack on inflation plunged the economy ever deeper into recession. The signatories wrote: There is no basis in economic theory or supporting evidence for the Government’s belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment … [P]resent politics will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.  Mrs Thatcher was later asked if she could name even two economists who supported her programme. Margaret Thatcher replied that she could, and named Alan Walters and Patrick Minford. On returning to Downing Street, a civil servant said to her, ‘It is a good job he did not ask you to name three!”

Minford was a supporter of the poll tax which led to riots when it was introduced by Margaret Thatcher and which was abandoned by John Major.  Most Conservatives now accept that Major was right to do so. Minford was also one of the contributors to the “Sharper Axes – Lower Taxes” book published in 2001 by the Institute of Economic  Affairs which said on the blurb for the book

The current welfare system discriminates strongly against work, family formation and saving. Welfare should be completely reformed to provide income supplements through a negative income tax with household tax allowances. Furthermore, welfare claimants without jobs and who are of working age should be required to undertake work as a condition of receiving benefits. Reforming welfare and related changes to pensions would save £46.5 billion a year.

The National Health Service should be replaced by health savings accounts with insurance for catastrophic risks. Experience from other countries suggests that this can lead to better outcomes, lower costs and much stronger incentives for health promotion. This reform would save £44 billion a year. 

More radical reform of education to save over £15 billion is required: reforms should include parents making some contribution to the cost of their children’s education.

Policy in areas such as defence and foreign aid should be strategically reviewed. Foreign aid should be cut entirely except for emergency aid: the evidence suggests that growth in poor countries will come about only as a result of the adoption of market economies and through private investment. Aid probably hinders growth in the poorest countries. Reforms to defence and foreign aid should lead to spending reductions of £29 billion a year.

Unsurprisingly these  recommendations were endorsed by  prominent Brexit supporters including Dominic Raab MP, The Rt Hon John Redwood MP and  Daniel Hannan MEP.

The Moral is:  If you want to turn our country back to the time of the poor laws – vote Leave, but if you want a fairer Britain with protection of our rights , please Vote Remain.