Brexit Economic Forecasts

The Government has received assessments of the potential  economic consequences of leaving the EU from HM Treasury, the Bank of England, the International Monetary Fund, the World Trade Organisation and other sources.  All of them been rubbished by spokesmen for the Leave Campaign.  The same treatment has been given to the latest report which has been prepared by The Institute for Fiscal Studies (“IFS”).   One of the constant criticisms from the Brexiteers is that EU funds in some part the works of the reporting institutions.   As one might expect from the IFS, it is written in very clear and cautious terms (read the report here).

In the summary introduction to the FIS report there is this passage:-

“However, there is an overwhelming consensus among those who have made estimates of the consequences of Brexit for national income that it would reduce national income in both the short and long runs. The economic reasons for this – increased uncertainty, higher costs of trade and reduced FDI – are clear. The only significant exception to this consensus is ‘Economists for Brexit’.

As may be seen from the Economists for Brexit website, there are two Co-Chairmen,  Dr Gerard Lyons and Professor Patrick Minford.  Thereby hangs a tale.  In December 2012 Boris Johnson, then Mayor of London, hired Dr Lyons as his “Chief Economic Adviser” at the not inconsiderable salary of £127,200 pa for a 30 hour week.  The cost of the appointment caused some stir in City Hall and the press at the time.  Dr Lyons started work for the Mayor of London in  January  2013.  In  August 2014, the then Mayor of London (still Boris) caused to be published a 104 page report entitled “The Europe Report :  A Win-Win Situation” and in the press release put out by City Hall there was the following passage:-

“The report uses specially commissioned and independent long term forecasting by Voterra found in the separate appendix. It is the first time that an economic forecast regarding London’s relationship with the EU has looked two decades into the future and their results very clearly indicate that the best economic scenario for London would be for the UK to remain part of a reformed European Union. However they also indicate that a scenario where the UK leaves the EU but continues to conduct outward looking and positive economic policies with the EU and the wider world offers nearly the same level of benefits.

The UK would remain in the EU but with substantial reforms. London’s economy would nearly double in size to a £640bn economy and 1m jobs would be added. In this scenario Europe would position itself to benefit fully from the changing world economy and reform would potentially be led by the UK. It is the most favourable scenario for London with a growth rate forecast over 20 years to be as high as the UK obtained over any similar time period during the whole of the 20th century.”

Funny how this evaluation which must have cost the citizens of London a  quite considerable amount does not seem to have been advanced by Boris or his fellow rebels.

Bad Penny Mordaunt

Penny Mordaunt, MP for Portsmouth since 2010 and Minister of State for the Armed Forces since May last year appeared on the Andrew Marr show this morning arguing for the Vote Leave campaign.

A Minister of HM Government appearing on TV (whether or not as part of a campaign) should be careful to prepare beforehand so as not to misrepresent the factual position.  Poor Ms Mordaunt plainly had not bothered – Bad Penny!

Bad Penny told  Andrew Marr that the migrant crisis was likely to accelerate Turkey joining the EU and the referendum was the UK’s “only chance” of making clear its opposition.  “I don’t think the EU is going to keep Turkey out,” she told the Andrew Marr show. “It is going to join…It is a matter of when.”  She did not accept that the UK and every other EU country has a veto on another country joining.  That was an assertion that was simply untrue.

As Minister for the Armed Forces, Ms Mordant should be aware that Turkey is a key NATO ally.

  1. Turkey has been a member of NATO since 1952 and is 2nd only to the USA in terms of the number of armed forces it can contribute to the Alliance. The USA has total armed forces of 2,220,412, Turkey has 1,041,900 and the UK just 387,571.
  1. A 5,453-strong Turkish brigade (the “Anatolian Lions”) served as a part of the UN force fighting in the Korean war. They were later awarded the highest honourable citation of the U.S. Army for saving the U.S. Eighth Army and the IX Army Corps from encirclement and the U.S. 2nd Division from total annihilation. In so doing the brigade lost 717 men and suffered 2,413 wounded representing the highest combat casualty rate of any UN unit engaged in Korea.
  1. The UK also sent 100,000 troops to Korea, mainly national servicemen and including Fusilier Maurice Micklewhite (better known today as Sir Michael Caine) and they too suffered many casualties – but the survivors feel they have been forgotten.    It is highly questionable whether the UK could deliver that many troops today.
  1. British and European security requires the integration of  all the Balkan countries into the Euro-Atlantic structures. Further, Mediterranean security cannot be separated from European security and neither will be achieved without Turkey which is therefore a key NATO ally.

Turkey applied for associate membership of the EU (then EEC) in 1959.  An association agreement was signed in 1963.  In 1987 Turkey applied for EU membership.  In 1995 a Customs Union agreement was signed.  In 1999 Turkey was recognised as a candidate country.  Accession negotiations started in 2004.

As of now, 14 out of 33 negotiation chapters have been opened, and one of the open chapters has been provisionally closed. As a result of Turkey not having fully implemented the Additional Protocol to the Association Agreement, the EU decided in December 2006 that eight negotiating chapters could not be opened and that no chapter could be provisionally closed until Turkey meets its obligations.  The latest progress report issued in November 2015 shows that there is still much to be achieved – and indeed some backsliding.  Therefore there is still a long way to go before the question of exercise of the UK accession veto will even arise.

But Turkey is a key ally.  It should be encouraged to make progress.  That is the policy of HM Government and it is must be highly questionable whether, as a Minister of the Crown,  Ms Mordant should have spoken as she did.

 

Boris & the Bus

Yesterday’s FT story by Sebastian Payne was headed: “Brexit Breakdown – a week dominated by Boris Johnson“.   It’s well worth reading and  Team Cameron will not enjoy the  observation that at times the tour has looked like an early incarnation of a  “Boris for Prime Minister campaign bus“.

Boris is a charlatan but his “upper class bumbling twit” TV persona has endeared him to the great British public.  Perhaps the Remain Campaign could persuade the League of Gentlemen to do a skit on Boris Johnson entering the Local Shop for Local People in Royston Vasey.

It was good to see Keith Vaz debunking Priti Patel about the Curry House issue.  I hope the poor Ms Priti takes note.

The latest telephone poll puts Remain on 55% and Leave on 37% and better still it seems that the betting shops are lengthening the odds on Leave – which may be an even more accurate predictor than the polls.

 

 

 

 

 

Steve Baker’s Whinge

The first things I saw today were two opinion polls: one poll from Ipsos-MORI (“IM”) of 16th May 2016 and a You-Gov (“YG”) poll of 17th May 2016 reporting:

IM:  Stay = 48%, Leave = 35%, Undecided = 14%

    YG: Stay =  44%, Leave = 40%, Undecided = 12%

Then up popped an e-mail from my Euro currency provider advising me that Sterling had risen as a result of the improved polling and that it might be a good moment to buy some more Euros.

Next I saw a whinge from  Steve Baker, the Co-chair of Conservatives for Britain on the Conservative Home  blog –  Remain campaigners – including Downing Street – must stop these nasty personal attacks.

What was interesting what not the whinge from the Steve Baker  but some of the responses from more sensible Conservatives of which the following are some extracts:-

  • This tit for tat on the EU debate is sickening. The Leave campaign aren’t coming out with a really positive and convincing reason to withdraw. Where is it?   What is it? If Leave are so convinced themselves why aren’t they able to get the story out? There is plenty of opportunity, but listen to Boris, IDS, Priti Patel, the story just seems to be “Don’t be scared” They even use the same corny tactics – accusations of scaremongering –  as Alex Salmond did in the Scottish Referendum.
  • Why does the Leave Campaign play the man not the ball on every major organisation with argues the downsides to leaving outweigh the upside – OECD, IMF, Obama, Treasury? If you want to fight this campaign with arguments, you need to produce them, not scream scaremongering left, right and centre.
  • It’s rather laughable to think that someone like Lord Heseltine can be “used” by Downing St. I suspect he says what he wants to say, and I rather agree with him. The fact is, the Conservative Government is campaigning for a Remain vote. Those who disagree with that can hardly complain about the cut and thrust of debate. Steve Baker also forgets the decades of vitriol from various anti-European groups directed at One Nation pro-European Tories, targeting seats and so on. This all looks like Vote Leave is giving up on winning and already fighting the recriminations war.
  • When I review the long history of hostility to the EU in the Conservative Party, and the determination with which so many with strong pro-EU convictions in the Conservative tradition have been comprehensively marginalised, not to say vilified, for decades, I find this complaint by an anti EU MP over the conduct of the debate during the past few weeks frankly rather ridiculous.
  • I am still technically undecided – having wavered between Leave and Remain for about a year now. But as we approach the date I am more inclined to vote Remain simply because of the vindictive and unprincipled stances of some (not all) in the Leave camp. I’d love to know who these people are outside London that think Boris is a hoot – I think he’s a lying idiot.
  • It’s interesting to see the differing perspectives of how the campaign is playing out. Certainly, there are some on both sides who haven’t covered themselves in glory, but many in Leave are acting like petulant children and some government ministers (e.g. Patel) have been unbelievably disloyal. Personally I’d rather listen to the Prime Minister, the first Conservative leader to win a majority for the party in 23 years, and John Major et al than the likes of Duncan Smith, Boris ‘bandwagon’ Johnson and Nigel Farage.

These sound more like traditional Conservatives who have a proper sense of Party and of the duty to back the policy of the Leader when in Government.   There are some details of  Conservatives For Britain  and its seems to be something of a party within a party  – the Tory equivalent of Labour’s Militant Tendency.

But even though the Conservative Home Blog does seem to be rather full of Brexiteer propaganda these days, it was quite a pleasure to read this post on the blog by Garvan Walshe which will, inevitably, be ridiculed by Brexiteers:  Garvan Walshe: Risky and radical. Why voting to leave the EU is un-conservative.

State Opening of Parliament

After the welcome intervention of  Lord Heseltine, it is possible that people, including Conservatives, are beginning to understand, that dear Boris has gone too far.

Meanwhile, over on the Conservative Home blog,  Paul Goodman, the quondam MP for High Wycombe, has already been blogging about potential ministerial changes after the Referendum.  In his proposed “Unity Reshuffle“, Gove would become Deputy PM and dear Boris would get the Home Office with Teresa May going to the Treasury and Osborne the Foreign Office.  It must be questionable whether Cameron would survive a “Leave” result and if the result were “Remain“,  then why should anyone be rewarded for opposing the PM’s policy.

Gove is a poison dwarf (in the Urban Dictionary sense) and he has already done enough damage in his present office  to merit something less demanding.  Since he is a Scot, perhaps a move to Secretary of State for Scotland would be in order – but only on condition that the Scottish Office be relocated to a depressed area of Scotland.   As for dear Boris,  if some office is called for, which is doubtful, then perhaps as a junior minister in the Department of Culture, Media & Sport – with special responsibility for circuses and clowns.

For once, the State Opening was  bit of a damp squib.  There was very much an impression that this was going through the motions while awaiting the outcome of the Referendum, but at least the speeches of the Mover and Seconder of the Loyal Address were worthwhile.

UKIP Welsh Assembly Member, Neil Hamilton made his maiden speech in the Welsh  Assembly referring to two lady members as “political concubines in Carwyn Jones’ harem”.   I doubt that will endear him to the ladies of Wales.

 

 

Farage suggests a 2nd Referendum

 

Nigel Farage has today suggested that if the vote in the coming EU Referendum is close then there may have to be a 2nd Referendum.  While this has been ridiculed by Cameron and others, he may, however regrettably, be right.

It is worth remembering that while UKIP has only one Member of Parliament in the Commons and 3 has-been peers in the House of Lords, it now has 24 members in the European Parliament, 497 local councillors and 7 members in the Welsh National Assembly.   Ever since it was founded in 1991 by Alan Sked, UKIP has made progress.  While it lost the face-off with the James Goldsmith funded Referendum Party,  by 2004 it had come 3rd in the European Parliament elections with 16.1% of the vote.  After Farrage became leader in 2006 he obtained substantial funding from former Conservative donors and in the 2009 European elections UKIP came 2nd after the Conservatives with 16.5% of the vote. In the 2013 local government elections it obtained 13% of the vote and in 2014 it got 163 seats and 27.49% of the vote in the European Parliament elections bringing its total number of MEP’s to 24.

UKIP is mainly supported by older, less skilled and less well educated working-class voters of which a high proportion are former Conservative voters.  Some Eurosceptic Conservative politicians may be tempted to jump ship and side with UKIP.

After all,  UKIP has several high profile former Conservative backers:  Stuart Wheeler, has donated more than £403,690 since 2009.  In October 2014, Arron Banks, who previously gave £25,000 to the Conservatives, increased his UKIP donation from £100,000 to £1 million. .  In December 2014, Richard Desmond, proprietor of Express Newspapers, donated £300,000 to UKIP.  The donation indicated that Desmond’s papers, the Daily Express, Sunday Express, Daily Star and Daily Star Sunday, would back UKIP in the run-up to the 2015 general election. Three weeks before the election, Desmond gave the party another £1 million.

UKIP seems to be developing a base comparable with that of the French Front National and Forza Italia  and he will continue to have influence within the European Parliament.

While a 2nd referendum seems unlikely this time around,  unless both Conservatives and Labour get their act together on debunking UKIP,  a 2nd referendum may be a real possibility in the not too distant future.

 

Nigels Against the World

 

Ferdinand Mount, who was Head of Margaret Thatcher’s Policy Unit, has published an absolutely devastating critique of the Vote Leave campaigns in the London Review of Books entitled Nigels Against the World.   The “Nigels” are, of course, Nigel Farrage and Nigel Lawson and he is not particularly kind about either of them, but he also has a great deal of perceptive observations about the others.

Andrew Gimson, the biographer of dear Boris, has posted a piece entitled “The Boris Bubble” on the Conservative Home blog which includes a link to the Ferdinand Mount piece.

Gimson ends with this:-

“Boris, one need hardly add, is the most famous Free Spirit in politics. He takes risks, tells jokes, gets stuck on zip wires, makes disreputable references to Hitler. Because he is unpredictable, he is amusing to watch. One never quite knows what he will say or do next. There are occasions when he himself does not know what he will say or do next, but there is also a vein of deep calculation behind his antics.

He is now engaged in a vast popularity contest, of a kind he has specialised in since the age of 16. It is possible that the more indignant the Establishment becomes, the more popular he will grow, so that his claims to be Captain of the School, or President of the Union, or Editor of the Spectator, or Mayor of London, or Leader of the Conservative Party, can no longer be denied.

But it is also conceivable that the Boris balloon, having swelled to unimaginable size, will quite suddenly go pop, leaving behind a few shreds of brightly coloured rubber.”