July 2012

Cameron shows some ankle.

He announces an EU referendum. Sort of.

For weeks our Prime Minister has been swishing his skirts and flashing some ankle. Hints. Winks. Nudges. Innuendo. And now it’s official. He “doesn’t think it’s impossible for the words Europe and referendum to go together”. Well now, there’s a break-through.

And that’s the good news. The bad news is, it won’t be an In/Out referendum. And it won’t be any time soon. It’s certainly not a “cast iron guarantee” — and we know what happened to the last one of those. Not much. To quote the old adage, Cameron has laboured mightily and brought forth a mouse.

An EU referendum that doesn’t include the “Out” option will disenfranchise a majority of voters. How can we vote either for the status quo, or for a few concessions, perhaps on the Working Time Directive? Let’s not forget that this is exactly what Harold Wilson (remember him?) offered in 1975. Partly to cover a Labour Party policy switch from anti- to pro-EU, he announced a renegotiation, and then invited the British people to endorse it — which we foolishly did, thinking we were voting for trade and jobs. But the renegotiation was nugatory, and Cameron’s would be similar.

Cameron will undertake a renegotiation, and EU leaders may be happy to accommodate him with a few scraps which he can spin as a new deal. (Remember Major at Maastricht? “Game, set and match”). Anything to keep us in.

Liam Fox does a bit better. He calls for immediate and radical renegotiation, with an In/Out referendum to follow if we don’t get what we want. This idea has more merit, especially if the process is time-limited, say six months — but who draws up the shopping list? Again, the government could come back with a mixed bag of concessions, and leave many of our existing EU problems in place.

So what do we want? A new relationship based solely on free trade and voluntary intergovernmental cooperation. We want no part in their employment, social, justice, environmental or home affairs, foreign or defence policy, or agriculture or fisheries. We want no part in any EU political, fiscal, monetary or judicial structures. There is no more reason for Britain to be involved in the EU Commission or parliament than to demand representation in the US Senate or the Russian Duma.

Will Cameron negotiate those terms and offer them to the British people in a referendum? There’s about as much chance of that as of a firkin of ale being left untouched on a troop train.

Meantime, Conservative MEP Dan Hannan says that it’s thanks to UKIP that we’re now seriously talking about an EU referendum. This, he says, is a victory for UKIP.

Another failed summit

True to form the markets leapt on Friday June 29th on the news that Merkel would now allow direct bank bail-outs from the “European Stability Mechanism”. But reading the small print, this still has to be approved by the Bundestag. It may run foul of the German Constitutional Court. Finland and Netherlands have expressed reservations. In fact like all recent EU summits, the deal is back in the melting-pot. Don’t hold your breath.

Asking the wrong question

Ask the wrong question, and you’ll get a silly answer. I’ve always liked John Major’s line: “If the answer is more politicians, you’re asking the wrong question”.

This time the question is “How do we save the €uro?”. But that presupposes that our greatest priority is to save the €uro. Maybe our top priority should be to protect the economic interests of European citizens. And that may not be consistent with saving the €uro.

Greece votes for austerity

It’s important to realise just what the Greeks did in their June 17th election. By a narrow margin, they voted, in effect, to confirm a promise that they are wholly unable to keep. They have voted to try to repay money that they should never have borrowed in the first place.

Greece is in a debt spiral. GDP is dropping. Tax revenues are falling short. They are already far away from the agreed recovery track. The election was also a clear choice between defaulting and leaving the €uro immediately, and in an agreed way, or being forced to default later, in a disorderly way.

Cameron gets it right for once. Sort of.

Cameron is reported (June 18th) as saying “The eurozone must reform or break up“. I agree with that. But Cameron clearly meant “It had better get on with reform, because otherwise it will be forced to break up, and we all know that would be a disaster”.

I take the view that it had better break up, because the “reforms” proposed are unworkable and politically unacceptable in a democracy. They want a banking union, a debt union, a real central bank as lender of last resort, and a central Treasury and fiscal policy. That would be the end of democracy as we know it — national governments would be unable to make decisions as fundamental as tax and spending. It would be “taxation without representation”.

But it would also require two things that I regard as politically unsustainable: (1) Permanent, and very large, fiscal transfers from north to south — effectively from Germany to Greece; and (2) Permanent austerity, poverty and probably hunger in Greece. For decades. Or for generations.

Andrea Leadsom MP says a Greek exit would be “a disaster”.

That, of course, is what they said in 1992 before Britain left the ERM. They were wrong. When we left the ERM we ushered in a decade of growth.

Of course Greece would undergo eighteen months of chaos and hardship — but would it any worse than what they have now? Of course European banks would struggle — but they’ve seen it coming and have their contingency plans in place.

And Greece would gradually price itself back into global markets, and start to recover. Indeed one reason that Brussels fears a Greek exit is that it would demonstrate that Greece, at least, was Better Off Out.

Boris gets it right – again

Ironically in the same June 18th paper that reports Cameron’s remarks, we have an op-ed piece from Boris Johnson, where he posits the same choice — integrate or break up — but quite rightly reaches the opposite conclusion.

He argues that continuing the failed €uro experiment is good for neither prosperity nor democracy. “For the sake of bubble-gumming the euro together, we are willing to slaughter democracy in the very place where it was born”.

How long before Conservatives decide that Boris might be a better bet than Cameron?

The EU in a Nutshell, by Lee Rotherham

My old friend Lee Rotherham, who also works in a research capacity with the Taxpayers’ Alliance, has published a book The EU in a Nutshell which is definitely worth a read.

The EU in a Nutshell invites readers to discover the truth about the EU and “cracks open the nut” to explain the guiding principles of the European Project. Lee provides an impressive array of thousands of facts to explain how the EU works, how it is perceived and how to assess whether it is indeed an undemocratic monster or whether the Europhiles are right. I’ve known Lee for years as a very sound euro-sceptic, and also very knowledgeable on EU issues. When he talks about the EU, he gets it right.

The EU in a Nutshell is available to buy via Amazon.

Wind Power: the worm turns

I blogged recently about reports that the Coalition had decided to scrap subsidies for on-shore wind from 2020.

This turns out to come from the thoughts of Chairman Letwin, and is not — yet — agreed policy, though we know that George Osborne’s Treasury is pressing for bigger short-term subsidy cuts.

But Lib-Dem Ed Davey, described as Secretary of State for Energy and Climate Change, and following in the footsteps of his distinguished predecessor Chris Huhne, is insisting that no such decision is made. He demands that the Coalition stick to its green credentials, such as they are.

I was particularly struck by his remark that our decisions on wind should be dictated by the evidence, not by politics (FT, June 18th). I agree. But Ed, the evidence is that (A) Emissions saved by wind power, when you allow for the necessary conventional back-up, are trivial or zero; (B) Wind farms drive up energy costs, force jobs and business and investment off-shore, and leave more pensioners in fuel poverty; (3) Over-reliance on wind also jeopardises security of supply and threatens power shortages and black-outs by the end of the decade.

So Ed, it’s your policy which is driven by politics, and it’s those who want to scrap wind power subsidies who are driven by the evidence.

If you’re in any doubt about the counter-intuitive proposition that wind power doesn’t reduce emissions, see the excellent report by environmental economist Gordon Hughes of Edinburgh University. You can find it on the GWPF web-site, and I blogged about it.

Business cools on the EU – another worm turns

There’s always been an assumption that while many things are wrong with the EU, membership is broadly supported by business for the trade benefits of the Single Market. We hear captains of industry reluctantly endorsing integration. We hear Carlos Goshn of Nissan threatening dreadful consequences if we disengage. He seems to have the wholly mistaken idea that trade with Europe is dependent on our EU membership.

But I have argued for years that the cost of regulation in the Single Market far outweighs any trade benefits.

So I was gratified to see a recent study conducted amongst 7,500 businesses by British Chambers of Commerce. Key conclusions are first, that more than half of respondents (51%) now believe that a Free Trade Area would be a better deal than EU membership and the Single Market, while only 31% favour “economic union”.

Some countries actually find that it is easier to trade outside the EU, rather than cope with Brussels red tape. It seems that many companies are choosing to focus their export efforts on the rapidly growing markets of the BRICS and the Commonwealth, which can only be a good thing

One by one, the arguments for closer EU integration are being dismantled by the reality of membership. Time to call a halt, and get out.

Our bankers are confused

The City’s biggest threat? Britain leaving the EU (they say). And the second biggest threat? EU Regulation! They can’t have it both ways. You can’t be in Europe and not run by Europe. That’s why we’d be Better Off Out. See my blog.

God Save the Queen

According to press reports, there are proposals to include the anti-Monarchy punk song by the Sex Pistols (I am embarrassed even to type the name of the group) at the Olympics opening ceremony, in the presence of Her Majesty.

I find the very idea that this disgusting and offensive song should be played to the Queen almost unbelievable, and it would be quite intolerable if it were actually done. How can they even consider it after the recent outpouring of public support for the Queen at the Jubilee?

Surely no decent person would deliberately insult and humiliate any elderly lady. To do this to the Queen is deeply shocking. It is a profound insult to her personally, and to the Institution of the Monarchy, and therefore to the whole nation and to every one of us personally. Let us hope that wiser councils prevail.

The song, and the group, represent a moment of shame for our country. The last thing we should do is to parade the wretched thing at a great national and international celebration.

The Egyptian Dilemma

Egypt has just had a presidential election where neither candidate appealed to a large section of the electorate — namely those supporters of the uprising and the Arab Spring, who wanted neither an Islamist nor a member of the old guard.

I was recently at an event (no names, no pack drill, as my old mother used to say) attended by a number of prominent Conservatives. One of them compared the current situation in the UK to the Egyptian election. Facing a choice between Cameron’s Conservatives and Miliband’s Old Labour, he wanted none of the above.

I was able to point out that there is a viable alternative for disaffected Tories (and others), and that I have the pleasure and privilege of representing it.

Conclusion

That’s it from Straz for the July session. Please remember to visit this website, my blog at http://rogerhelmermep.wordpress.com, and follow me on Twitter: @RogerHelmerMEP