1STRAIGHT TALKING April 2016
Roger Helmer’s electronic newsletter from Strasbourg
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We are now in Campaign Mode for Brexit, and I am publishing up-to-date news on a daily basis on my blog at https://rogerhelmermep.wordpress.com/, under the snappy title of “Daily Debrief”. It’s also being widely published through the Party. So all the news is on the blog, and this newsletter will be a bit briefer than usual.
The Dutch vote NO!
As I write, it’s April 7th — the morning after the Dutch EU Referendum. And we’re elated. I was awake and on the web after midnight last night to get the news — would the NO side win? And would turnout hit the critical 30% level to validate the result? And by 00:30 it was clear. NO had won 61/38 (don’t ask me where the odd 1% went). And turnout at 32.2% had exceeded the threshold.
A brilliant precursor to the British Referendum. We are not alone. Across Europe, citizens and voters have had enough of unaccountable, anti-democratic governance from the unelected Brussels élite. Now we need to get a similar majority for Leave on June 23rd.
There’s no “Status Quo” in the EU
In referenda, there’s often a trend to revert to the “Status Quo” towards polling day, on the “Better the devil you know” principle. It’s important for the Leave campaign to get the message across that there is no status quo in the EU, because the EU is not a destination but a process. It’s a moving target. And the risks of staying in are much greater than the risks of getting out.
More Port Talbots as energy costs rise and the war against CO2 rumbles on. More immigrants, more populous and impoverished member-states, more EU funding withdrawn from Western countries and going to Eastern Europe. More pressure on social cohesion and social infrastructure. More security threats as we are unable to control our borders. More wage compression for low-skilled and unskilled workers.
The inevitable collapse of the €uro — which will damage us in or out, but much more if we’re in. The effects of future regulation on our industries and our agriculture. I’ve written this up in more detail on my blog.
Let’s get the message out: there’s no status quo. We’re better off facing a future where we control our destiny, rather than a future where we’re controlled by others.
As UKIP Industry Spokesman, I am often asked about our Industrial Strategy, and I tend to reply, rather glibly, that we don’t need an industrial strategy. We just need to remove the regulatory and fiscal obstacles to enterprise, and let entrepreneurialism flourish. We don’t need to teach the grass to grow – we just need to get the rocks off the lawn.
But following the Port Talbot/Tata issue, perhaps we do need an industrial strategy – or at least a strategy for clearing the lawn of rocks. If I were in Sajid Javid’s chair now, I should be putting together a task force of my civil servants (plus perhaps an observer from the Treasury) to look at energy prices for industry, and to propose reforms to ensure that within six months, British companies would be paying no more than the EU average for electricity – and ideally less.
No doubt the Treasury observer would protest that this would involve cutting taxes and reducing revenue. But you can’t make revenues increase by killing the Goose that lays the Golden Eggs. If Port Talbot closes, if energy-intensive industries move off-shore, they won’t pay any tax at all. The whole point of taxation is to set it at a level that allows the economic activity to continue, and to grow. Osborne seems to have recognised that principle in the North Sea, where he has preferred to reduce tax rates rather than see activity cease. He needs to extend the principle.
Balance of Payments Deficit
On March 31st I Tweeted “We allow our energy prices to drive major industries offshore. Then we wonder why our balance of payments deficit hits a record high”. The newspaper City AM clearly liked this Tweet, because they published it on April 1st under their “Best of Twitter” rubric.
Also on April 1st, Jeremy Warner’s column in the Telegraph worried about balance-of-payments, attributing it to “living beyond our means”, too much borrowing and consumption, too little saving – plus the (hopefully temporary) effect of reduced dividends from Britain’s overseas investments, resulting from the global slow-down and the end of the commodity super-cycle.
Of course Jeremy is right (Jeremy is always right). But I feel he is missing one key point. If, in Antonio Tajani’s telling phrase, we are “creating an industrial massacre in Europe” with energy prices, surely this too has to be a major factor? We have seen steel, aluminium, chemicals, fertilisers, glass, ceramics, petroleum refining, all moving systematically abroad, driven primarily by energy prices. So instead of (for example) refining petroleum products in the UK (I will always remember the flames over the Fawley refinery, when I lived in Southampton as a child), we are simply importing refined petroleum products (and generating 35% more CO2 globally than if we did it at home, according to DECC).
If we are now importing all these products which we used to make at home, is it any wonder that our balance-of-payments is shot to hell? As noted above, we need a clear strategy to make Britain an attractive place for these industries. We need to bring them home. And we need to exploit indigenous energy resources instead of being beholden to Russia and Saudi Arabia. We talk about promoting manufacturing. Why don’t we actually get round to doing something about it?
“That Sinking Feeling”
On April 6th I attended a seminar jointly organised by the EFDD and the ECR, on the €uro. An unprecedented example of eurosceptic cooperation. We had a really impressive line-up of heavy-weight economists, most from universities and institutions in continental Europe — this was by no means a British eurosceptic benefit match. Stefan Kawalec, former Polish vice-minister of finance and now head of Capital Strategy, a consulting firm. Brigitte Granville, Prof of Economic Policy at the Queen Mary University of London, Jean-Jaques Rosa, Prof of economics at Science Po Paris … and so on.
The key message to emerge was the broad consensus of economic opinion that the choices ahead for the €uro are (A) To carry on with massive bail-outs, and with Greece (and perhaps other southern European countries) as a “protectorate” of Brussels; or (B) To dismantle the €uro. Only the vast hubris and self-regard of the Brussels nomenklatura stand in the way of the overwhelming economic logic of a €uro break-up.
An associated booklet entitled “That sinking feeling” set out the substance of the presentations.
There was a recent line in the Daily Telegraph from distinguished economist Roger Bootle. Commenting on the scaremongering that fear of Brexit could drive down the Pound, he pointed to the benefits for exporters and for our balance of payments of a lower exchange rate. And he concluded “I don’t worry that voting for Brexit will drive down the Pound. I worry that voting to Remain will drive it up”.
Now even the Tories call for lower energy prices
Europe has amongst the highest energy prices in the world, and the UK has the highest prices in the EU (give or take). This is ruinous, driving industries, jobs and investment overseas. I have been fulminating against our high energy prices for years — but we won’t gain anything on energy prices from Brexit unless we have the sense to adopt rational energy policies in the UK.
The Port Talbot issue has brought all this into focus, and I was delighted to see that the Tory MEPs’ energy spokesman, the braw Scot Ian Duncan, was calling on Twitter for Sajid Javid to scrap the Carbon Floor Price (though he’ll have to get Osborne on-side too). I support Ian Duncan’s demand.
More trouble from the ETS
Hot from the press: I attended a lunch debate today (April 13th) with the European Steel Industry and the Chief Executive of ThyssenKrupp. The topic was “Competitiveness of the Steel Industry: what impact has the reform of the ETS Directive?”.
I have repeatedly criticised the EU’s Emissions Trading Scheme (ETS), describing it as “A dog’s breakfast”. It was supposed to set a market price for CO2 emissions, and so send price signals to the market to promote a switch to non-fossil fuels, and to encourage energy efficiency. In fact for various reasons it never reached a price level that would be effective, despite repeated tweaks and “reforms”.
Now we have a major reform that involves free allowances for energy intensive industries, designed to prevent “carbon leakage” – that is, major industries going to China (for example). But the pot of free allowances is limited, and about half will be auctioned rather than given away.
They are asking the wrong question. They are asking “How many allowances can we afford and still stay within our climate targets?”, when they should be asking “How do we keep European industries (and Port Talbot) competitive?”.
They’ve created their own Catch 22, where if they want to stay competitive they have to abandon their emissions targets, and if they want to hit emissions targets, they drive industry, jobs and investment off-shore. ThyssenKrup confirmed again (as I have been saying for years) that a ton of steel in Shanghai means much higher CO2 emissions than the same ton of steel in Europe.
MEPs were alarmed when the industry said that investment was declining (and this, remember, in Germany – no question of the decline being caused by worries over Brexit). Why? they asked. Simple. It’s regulatory uncertainty. The industry doesn’t know how many free allowances to expect, nor does it have any way of estimating the future auction price of additional allowances. So they can’t make a credible business plan. So they don’t invest. Regulatory interference and uncertainty are the bane of industrial investment – and the EU is the past master at regulatory uncertainty.
Old Masters for Brexit
I’ve been aware of — and appreciated — for some time a firm called “Old Masters Online“. It offers a huge range of high quality fine art reproductions, in a variety of frames, and I’ve been very pleased with the pictures I’ve ordered from them. (End of commercial!). I’ve also enjoyed a bit of badinage on the e-mail with the proprietor, Robin Horsley.
But I was surprised and delighted when I discovered that Robin is also an enthusiast for Brexit — so much so that he has suspended his business till the end of June, and is vigorously engaged in the campaign. He arranged to visit me last week and recorded a long interview about various aspects of the Brexit campaign and the EU. See it here Robin will also be posting it to his web-site and lists.
Also have a look at the UKIP MEP web-site www.ukipmeps.org