Tuesday, 19 January 2016

Feeble arguments for staying in the EU.

From yesterday's Evening Standard:

Millions of pounds could be cut from flagship London projects if Britain leaves the EU, campaigners claim. They published a leaflet, to be distributed to households across the capital, rejecting six “myths”, including that “the EU has done nothing for London”.

It states: “The EU has invested millions in important projects in London, including cultural programmes at the British Museum, £20 million funding for the cable car from the O2 to the Docklands, vital HIV and cancer research projects at London universities, and £1 billion of finance to help build Crossrail.” The European Investment Bank loaned Transport for London £1 billion towards the financing of the new rail line.

Culutural programmes - probably a waste of money.
Cable car - great fun but a waste of money.
Vital HIV and cancer research - good stuff, but isn't this being done anyway?
Crossrail - that was a low interest loan, the value of the interest saving is probably close to zero.

The article then makes the obvious point:

However, the document from Britain Stronger in Europe does not mention the billions the UK ploughs into the EU each year.


Random said...

I would have thought that was obvious. We don't use Euros in the UK. We use Sterling.

So this is a 'export led growth' strategy from the EU nations. The EU are massively fucked if they lose access to export markets due to their inflexible treaty. This is mad in many ways. They are essentially saying we will cause production to wither on the vine rather than give it to the UK, despite that depressing demand further.

Mercantilism doesn't work. The idea that foreign demand is better than domestic demand is a bit daft. Hence why 'export-led' growth is a really stupid idea.

If there are unused or underutilised resources the government can simply cause production to happen. It has an infinite amount of Sterling.

Unknown said...

As to that last point - Exactly! What's the point in sending the EU money which they then send back to us. My 9 year old boy gets this.

In other news Prosper has an interesting Land Tax piece which requires the usual filtering/parsing by the seen it all before YPP crowd.


Mark Wadsworth said...

R, GBP and EUR are interchangeable, if you can borrow, earn or print one you can change it for the other. Agreed on mercantilism, always struck me as meaningless posturing.

SV, that article seems quite promising to me, nothing to dissect, is there?

Unknown said...

@MW - No, not really. I think that they make the slight error of sometimes mixing up the economic good - innovation, investment, etc., with the bad, i.e. rents, but overall I think their campaigns are in the right place.

SumoKing said...

Well, the leaflet is right then isn't it, from the point of view that this is money allocated by an EU department for things that HMG would probably not do, preferring to plow the money into some sort of special pleading nonsensical subsidy for the business fad of the month.

I think the point is more "yeah you pay a membership fee the EU but you don't get none of it back, same as any tax"

Bit of a non issue on both sides really this

Mark Wadsworth said...

SV, given our starting point, it's a good step in the right direction.

SK, it's not a non-issue. Maybe not that important, but all things considered at best it is a feeble argument and at worst it is a non-argument.

Surely, with all the resources at their disposal, the pro EU crowd can come up with one or two arguments where even the most hardened cynic has to admit, "OK, chalk that up as a reason for staying in." I have yet to see one single such killer argument.

DBC Reed said...

One killer argument? How about if we trade on world markets we will be wiped out by cheap labour competition from China, Vietnam etc. That was the original justification for United Europe.That and having a guaranteed market of 300 million plus as near as possible self contained for commodities, energy supplies etc..We are having enough trouble with China already. Why make it worse?

Bayard said...

DBCR, are you saying that other states in the EU currently buy stuff from us that they could have bought cheaper from China or Vietnam and that we buy stuff from EU states that we could have bought cheaper from outside the EU?

benj said...

I was always vehemently anti-EU. Now I believe all our politicians are so useless/dangerous they need some form of outside moderation.

Also, in an ideal World, sovereignty would be pooled in a linear way. From the individual up to the UN (or whatever). Leaving the EU, like the Scots leaving the UK is retrograde.

If however the EU didn't allow the UK to abolish VAT, then leaving would be justifiable.

Mark Wadsworth said...

DBC, yes, don't waffle and answer B's question instead.

BJ, in theory yes, but does the EU actually do much "moderating"? Has it stopped UK government selling off council housing? Has it stopped the Tories persecuting welfare claimants? Has it stopped UK governments allowing 100,000s of non-European immigrants in each year? DId it stop the UK government from doing massive bank bail outs? Has it prevented the wildest excesses of the government's urge to ban things like smoking?

Is there anything that a UK government really wanted to do that the EU prevented? Are there not just as many bad things which the EU imposed which the UK government might not have done? There's not much, is there?

And clearly, the EU would not allow us to abolish VAT. Having VAT of at least 15% but being nudged up to 20% is an EU membership requirement.

Bayard said...

"Now I believe all our politicians are so useless/dangerous they need some form of outside moderation."

I agree that is a problem, but the answer to that problem is not the EU. In theory a supra-national moderating authority is a good idea, but in practice it turns out to be hugely bureaucratic and a magnet for cronyism and rent-seekers.

DBC Reed said...

MW "Waffling" (your new favourite word)not something I've been accused of before.
You answer the question: we have lost the steel industry to Chinese cheap labour dumping ;we lost the coal industry to cheap imports previously (forget the political razmatazz); why are you so intent on exporting our industry to far flung extremities?
(Bayard's question assumes our exports to Europe exceed our imports from it and that we don't buy cheap Asian goods)
Do not assume I am defending modern Europe which has been ruined by the Americans' comic book PLAN of WORLD DOMINATION with FREE WATER PISTOL that detached Poland etc from Soviet Bloc and then dumped them on Europe to sort out (when the original Europeans envisaged pan European wage levels that were roughly the same) and supported jihadis in Afghanistan to push out Russians ,only for the jihadis to go out of control and push refugees into Europe.
Is my waffling clear enough?

Lola said...

DBCR.. Steel industry. No. There are various forces at work on the decline of the UK steel industry. Including more recycled steel (most UK production is from ore). Green taxes on UK industry. High and badly constructed taxation especially employment taxes. Huge subsidies paid to steel millers in China (say) that has led to overproduction and is now coming back to haunt them. etc. etc. I.E it's not 'cheap labour' per se. In any event there is a thing called comparative advantage which means that we all get richer if stuff is produced for less.

Coal industry similar but also because deep mine coal is hugely more expensive than open cast.

DBC Reed said...

@L No use of recycled steel and abolition of employment taxes will allow Tata to approach Chinese steel prices. Overproduction in China is not just haunting China ,its haunting Corby and Port Talbot.Why do you want the British economy enmeshed in this globalised mess, when it needs the combination of a big client population, as much self sufficiency as possible and no cheap labour undercutting?
NB The entire British cosmetic industry disappeared taking with it Northampton's Avon Cosmetics which moved East quick as a shot when the EU took in Poland.

Bayard said...

(Bayard's question assumes our exports to Europe exceed our imports from it and that we don't buy cheap Asian goods)

No it didn't. Try reading it again with "or" in the middle instead of "and". My point being that unless the EU buys stuff from us that they could have bought cheaper from the Far East and vice versa, and all this will stop if we leave the EU, then your point doesn't really hold up. I think it is rather more likely that everyone in the EU, including us, buys things from the Far East when that is the best deal and, if that is the case, they will continue to do so if we leave the EU. The only thing that I can see that will hamper trade with the EU post Brexit is if the EU slap tariffs on our exports to them out of spite and we do the same to them in retaliation.

"we lost the coal industry to cheap imports previously"

You seem to be forgetting that there comes a point where there is simply no more coal in the ground. You cannot have a coal industry without coal.

Random said...

"I was always vehemently anti-EU. Now I believe all our politicians are so useless/dangerous they need some form of outside moderation."

I'm afraid that is simply wrong.

The UK has no real concept of the notion of a Higher Law. And we've seen what has happened in Poland with that (look it up if you don't know.) The Polish situation would be rather like the Privy Council or the Lords Spiritual being able to veto legislation passed by the House of Commons. In fact we have the Parliament Act that allows the House of Commons will to prevail even if the upper house - the unelected House of Lords - objects.

Here in the UK, parliament is 100% sovereign and if somebody wins an election, they can change direction at whatever speed they want whenever they want to - if they can get parliament to agree. The judiciary merely interprets the laws and is only able to hold the government (as the executive branch) to account. It has no power to bind parliament. In particular parliament has no power to bind subsequent parliaments.

For example we have a Human Rights Act which encodes the European Charter on Human Rights (ECHR) into UK law. However it doesn't give the judges the right to override legislation. It just gives them the right to mark legislation 'incompatible'. It is then up to parliament to fix the legislation to make it compatible. But importantly they don't have to.

The people then decide at the next election whether 'incompatible' legislation is a problem, and if they do they will elect a new parliament (and possibly a new government) that will change it.

To give an example - when prisoners in the UK successfully argued that their lack of a vote is in violation of the ECHR and judges marked the law 'incompatible', parliament decided not to do anything about it. The law remains enforceable, prisoners still have no vote. At the election the people of the UK didn't change the government to change the law and remove the 'incompatible' marker. So the law stands.

DBC Reed said...

You keep referring to the effects of imports and exports. The whole point of a united Europe was to be self contained and do away with imports and exports.
The public school riff raff in Parliament and their rough trade associates in UKIP do not grasp this blindingly obvious concept so its goodbye to steel and coal which were the basis of the European Community ( Coal and Steel Community= Schuman Plan).

Mark Wadsworth said...

DBC you are going round in circles. The EU is largely to blame for decline of our steel industry (allowing Chinese imports and the daft energy and carbon taxes) so what exactly are you arguing for? By the way, there are as many protectionists in UKIP as there are "rough traders"

DBC Reed said...

@MW Oh dear, rather embarrassing: you do not appear to know what rough trade is. I was being derogatory ,put it that way.
Since Public School riff raff No I is negotiating for EU reform ,what I' m exactly arguing for is a return to the founding European principles of economic self containment: no import/export,no decisive interference from the likes of the American Banks being in hock to American property market and destabilising our banks leading to Austerity/ Misery ;no Economic fuck ups in UK resulting from Chinese fuck -ups.In short the Schuman/Monnet deal.
(This is by default: as a young man I supported the idea of a self contained Common Market based on the Commonwealth instead of Europe but, although I collect lost causes, this one is an ex-cause.)