Labour’s new deal for Europe

ec-london

This is a comment on A new deal with the EU is exactly what Britain needs. Here’s how Labour will achieve it | Nick Thomas-Symonds | The Guardian  – www.theguardian.com, I have made it with the help of diigo, where the headline comment on my bookmark, part generated and part selected from the article says, ‘via Comment is free | guardian.co.uk, subtitled, nonsensically, “This isn’t about politics – it’s about pragmatism. Working with our allies will make British people safer, more secure and more prosperous.”‘.

The article says nothing new and repeats the isolationist nonsense fantasies of Labour’s triangulators that Brexit can be fixed. It includes the phrase “honour the referendum” despite the fact that it was nearly nine years ago, and we’ve had three general elections since then.

Quotes and comments

We are equally confident in what the UK can offer in return. It is a politically stable country, and the government has a huge mandate, with more than four years left to deliver our policies. This stability has already inspired the confidence of businesses across the world, unlocking tens of billions of pounds of long-term investment.

  • The statistics aren’t in yet to substantiate investment numbers,

Labour is rising to meet the challenges in this new era of global instability.

This is not about ideology or returning to the divisions of the past, but about ruthless pragmatism and what works in the national interest.

When it comes to security, Nato is the cornerstone of our defence.

  • Really? A fantasy of the Labour Right, NATO’s gone, for at least four years, but Trump’s isolationism has not come out of the blue.

All of this will be framed by the very clear red lines we set out at the election. We won’t return to the arguments of the past: there will be no return to the single market, the customs union or freedom of movement.

  • Well, it won’t work then. There isn’t a deal in which the UK wins at the expense of the EU. If only because, the queue of member states asking for their own opt-outs would be 25 long.

We will only agree an EU deal that meets the needs of the British people and respects the 2016 referendum result.

You can’t do both if you believe honouring the referendum means staying out of the EU but the referendum mandate was dishonestly won and is now nearly nine years old; I estimate that about 4½ million voters have died since then. …

Best for Britain on Trumps trade war

Best for Britain on Trumps trade war

I subscribe to Best for Britain’s news letter and they sent me the following. I can’t find it on their web site and so I have posted it here. Their front page has a comprehensive response to Trump’s trade war and is worth a look. Unlike me they are not focusing on the need for the single market to access the protection of the EU’s Digital Services Act and in fact are fundamentally in the “Fix Brexit” campaign, but what they say is interesting.

quote

As you’ll no doubt have seen, the UK joins Brazil, Australia, and the uninhabited Heard Island – along with almost every other country in the world – in being slapped with a 10% tariff on all imports to the US. The EU has fared even worse, as they stare down the prospect of a 20% tariff. Unaddressed, this unprovoked and punitive move by Trump could wipe out all efforts to grow our economies, both here in the UK and in the EU.

We knew this was coming. Which is why we asked Frontier Economics to model how a better UK-EU trade deal could minimise the impact of Trump tariffs. The results should spur a simultaneous sigh of relief across Whitehall.

Not only would a common sense deal between the EU and UK cancel out the economic hit to the UK from Trump’s tariffs, it could also grow our economy by up to 1.5%. And those areas hit hardest by tariffs – manufacturing hubs like the Midlands and North East England – would see the greatest benefit. A deal that includes deep alignment between the UK and EU on goods and services would also shield the EU, reducing the impact of tariffs on the bloc by around a third. 

Those sighs of relief should ripple around the Cabinet table too when you add in the results of our latest polling. Three times as many people think we should increase trade with the EU in response to Trump’s tariffs, compared to just 14% who say we should be sucking up to Trump in the hope of an exemption.

If there was any doubt, Trump is no friend of the UK. His unprovoked trade war will be felt by ordinary people across the country, in our pockets and in cuts to public spending. Anyone seeking to spin this slap in the face as a ‘Brexit win’ should remember the thousands now at risk of losing their jobs, and that Brexit itself has caused far more economic damage than Trump’s tariffs ever could.

But if we tear down barriers to UK-EU trade, we can gain significantly more from our largest trading partner than we stand to lose as a result of back-of-the-envelope calculations made in Washington.

In these choppy geopolitical waters, we’ll keep pushing the government to make the right decision and seek stability for us, and for our EU neighbours. Thank you for your support in helping us do it. …

Universalism

Universalism

In his latest blog, Phil BC shares that the Labour Government, articulated by Rachel Reeves, want to end the pensioners winter fuel benefit because they oppose universalism. But pensions have been earned through NI contributions. Dealing with wealth, or the wealthy earning subsidies, should be dealt with through income tax, removing the NI taper, inheritance tax, and a new wealth tax. Any such reform needs to take into account housing costs and cost of living. Why is it always the only just successful that get penalised by these schemes, such as occurs with the clawback of personal allowance and child benefit. The frightening thing from Phil’s report is that the state pension is a contributory universal benefit, although so was Unemployment Benefit which the Tories abolished and they also put National Insurance contributions into play. Are Labour really going to play with this and create a huge increment to the WASPI campaigners? Perhaps they think that pensioners vote Tory and die, but there are over 1 million workers over 60, most of whom will be planning when to stop and need some stability in their planning horizon. …

No jokes Mr Mandelson!

No jokes Mr Mandelson!

This article in the guardian, entitled, “‘You’ve got to be joking’: Mandelson dismisses prospect of UK rejoining EU” reports a speech by Peter Mandelson to the BCC in which he reinforces the labour leadership’s argument that the UK will not rejoin the European Union. He states the British people would not want to go through another referendum and there is little appetite in in Europe to renegotiate a new accession.

I just ask how hard is it to say “yes”! The problem with Mandelson’s argument, although shared by others is they do not understand, firstly the damage that Brexit has done to our economy and standard of living and thus dismiss or at best trivialise the benefits that joining will realise and secondly all the opt outs from the European Union have gone. The only terms on which we might rejoin are full compliance with the treaties. It will not be a hard negotiation. What would be hard is negotiating piecemeal variations of the FCTA, which is what Labour claim to want.

This means no opt outs from the justice pillar which should never have been negotiated , compliance with the stability and growth pact and Euro membership, full payment of dues i.e no rebate, and if the the Irish agree,  membership of Schengen.

As for the pain of a referendum, it seems he’s changed his mind, or was his support for a people’s vote just a tactic to thwart a Corbyn led Labour Party. I also remind him, we don’t need a referendum, although it might be best; the EU needs confidence that the decision is the popular will of the masses, and the Brexiteers need to know they’ve lost and get over it.

  1. There are problems with the EU’s SGP but since Reeves’ Rules are even tougher than the SGP’s, they shouldn’t be hard for Labour to agree.
  2. We need to agree with the Republic of Ireland because of the Anglo-Irish common travel area; if the UK joins then so must Ireland.

Image Credit: The picture is CC World Economic Forum 2008 BY-NC-SA; this blog is non commercial.  …

Say no to extrawürst

Say no to extrawürst

Provoked by Nial Ó Conghaile who posted a thread today [html | twitter] in which he talks of the conflict between expanding the EU and deepening its integration. He suggests that Iceland could join easily but that the Ukraine has a long road to travel, and questions where the UK would sit on that spectrum. Originally written as a reply, I remind myself that “Mercantilist acquiescence is not enough and demands for extrawürst only prove we are not ready.”. The article looks at the opt-outs together with a call to remember and accept the internationalist and democratic vision at the heart of the EU project. There's more overleaf ...

The trillion dollar coin

Last month, the US passed through a politically created fiscal crisis; commentators were suggesting that for the third time Congress would cause the Federal Government to run out of cash and default on bond and salary payments, and 3rd party bills for goods and services. This is a tactic pursued by those who don’t like government expenditure unless its on arms. I argue that there were three ways that the Government could have sidestepped this piece of legislative extortion. The most amusing route would be to mint a $1Tn coin. I conclude, overleaf, by arguing that, progressives should be wary, this idea of legislating, or embedding fiscal policy in treaties or constitutions is designed by people who support the founding fathers, who while they opposed taxation without representation, were almost equally opposed to taxation with representation. NB The EU’s stability and growth treaty commits its signatories to a level of national debt and a level of national deficit. They need to change this, these decisions need to be under democratic control. There's [much] more overleaf ... ...

Rejoining EU, what’ll it take?

Rejoining EU, what’ll it take?

I attended the EU’s citizens panel on virtual worlds over the weekend. One of the most inspirational aspects of this event was the ability to meet so many people from across the European Union. I took the opportunity, to talk to some about how they felt about British re-entry. One Dutchman felt we hadn’t suffered enough, and that we needed to wait. One German was anxious that we re-joined so as to reduce his tax burden. Another very well-informed Dutchman, said he felt that British public opinion under estimated what the EU would ask to allow us to rejoin and one Finn, said his condition on us re-joining was that we be forced to enter FIFA competitions as a single nation. I think this was a joke, but he seemed quite upset about Finland’s record against the UK nations’ football teams.

My informed Dutch correspondent started by talking about the euro. Some of what he said particularly on the Euro was a bit worrying, but it’s a price worth paying if that’s what it takes. I suggested that the Swedish precedent on the currency is important and that there may be dangers to the EU in attempting to subsume another global reserve currency too quickly. I also wonder if those nations hosting cities that have replaced London’s international financial trading capability, really want to see the London market makers able to trade in euro instruments so soon. To me more importantly on the currency and macro-economic convergence, are the limitations entrenched in the ‘stability and growth pact’. Debt levels and deficits should be the result of a democratic mandate and not embedded in an unchangeable treaty; the need to breach the stability and growth pact limits during the pandemic is a proof point to this truth. Perhaps the EU member states will take the opportunity to amend the requirement of Stability and Growth Pact. We agreed that the other opt outs are all gone; the UK will have to forgo its financial rebate, our charter of fundamental rights exemptions and comply with and join the Schengen treaty.  These terms are acceptable to me. We need to start talking about them. …

Labour and Devolution

Labour and Devolution

Scottish Labour met last weekend, its motion on the Constitutional question welcomes the Brown Commission report entitled, “A New Britain: Renewing our Democracy and Rebuilding our Economy. Report of the Commission on the UK’s Future”, on the UK constitution and wealth, which I reviewed last month.

I have concluded that if one wants a single labour market, and single monetary & fiscal policies, there’s little more devolve. The Brown Commission came up with the job centres, skills and workers’ rights, the minimum wage and a suggestion that Scotland should adopt directly elected mayors. It’s clear to me that the reason the Commission found difficulty in finding more powers to devolve as its authors are committed to that single labour market and monetary & fiscal policy. While they look at tax raising powers for the Scottish Parliament, they note that these, albeit requiring Treasury permission, have never been requested. If one is committed to these common policies, either on the grounds of a superior welfare economics solution or through political commitment, then there are few powers left to give Scotland with the final say.

In the full blog article, overleaf, there is an analysis of the Brown Commission recommendations for Scotland, and a further analysis of why there’s no more to devolve, and thus why co-operation between Westminster and the nations of the UK is necessary. Use the “Read More” button to view the complete article. …

Brexit’s over, it’s just about the mopping up now

Brexit’s over, it’s just about the mopping up now

Phil, of a different Bias, has released a new video, spurred by his observation that the Brexiteers have retreated from “Take back Control” to “Save the Pound” because if we were to rejoin, they think we’d have to join the Euro. This probably isn’t the case. Phil points out that Sweden has agreed to join up and did so in 2002, but hasn’t yet done so and has no plans to do so. This article looks at the issues of economic policy governance, the opt-outs, trade friction and immigration. It concludes with the proposal that, "The Truss Government was an ERG Govt, it’s fall marks the end of Brexit..", although we are unlikely be allowed back in until we can offer a substantial and believably long-term majority in support of re-joining the EU/ There is more overleaf ...

The economics hurdle for rejoining!

This was published on the London 4 Europe web site, arguing that the Euro and “Banking Union” are potential political obstacles to rejoining. I just observe that the author has not caught up with the change in macro-economic management, the Stability and Growth Pact has serious credibility problems given the numerous breaches. We can hope that with a new coloured government in Germany the deficit fetishism of the EU will be weakened. Secondly, banking regulation is global and emanates from the G7 and BIS in Basel. The EU has little room for manoeuvre, although of course, should it be in a position to join BIS that would change things. This is an article designed to show how clever the author is and fails in that goal.

The ECB, Frankfurt CC DFL 2011 BY-SA

I note the article focuses on Sweden, which has agreed to adopt the Euro and not Denmark which has an opt-out. When we get to negotiating re-entry, the size of the UK economy and the sterling zone will be issues which may lead to us being given an opt-out or a Swedish deal, although I was interested to note that Nordea, Sweden’s largest bank has moved to Finland to locate in the Eurozone.

A serious analysis will come later, when both parties need an answer dealing with transaction volume, prudential regulation and fundamentally macro-economic policy. Let’s note that we had an opt-out of the compliance clauses of the SGP, we doubt we’ll be getting that back.

Macro-economics will be a problem if we have a left led Labour Govt., that wanted to pursue a policy of full employment but more importantly will be the need to meet the democracy criterion of the Copenhagen Criteria, where parliamentary sovereignty, the House of Lords and first past the post together may be seen as obstacles. Starmer’s Labour lacks the will to confront the issue of rejoining the EU but would probably welcome the shackles of today’s Stability and Growth pact. Actually, the Stability & Growth Pact is a serious barrier to rejoining for the Left; perhaps the sterling zone will save us from that too.  …